Body corporate minutes search

[Harriet]

Hello everyone,

I have just been reading a book that advises IP buyers to get a body corporate minutes search done before purchase. What's everyone's view on this? Is such a search necessary? Useful? Do others routinely do this?

Thanks,

Harriet

[JoannaK]

Harriet,

I would say that doing a Body Corporate minutes search would be a necessary part of your due dilligence.

Minutes of the meetings record everything discussed at the Annual General Meetings and extra ordinary general meetings and is of valuable assistance to any prospective purchaser.

If there are problems within the building, if the body corporate is considering major expenditure of sinking funds this will come up in your search and allow you to make a more informed decision about your purchase.

There is usually a small fee to inspect the minute records.

hope this helps.

[Pedro61]

Dont solicitors usually do this during their "pre settlement" process?

[natmarie73]

Only if you ask them to. Solicitors don't usually do anything you don't ask for as you are paying for each search. A good solicitor will recommend which searches should be undertaken and why but won't go ahead until you give them permission.

When buying a unit, I have found it good to put a clause in the contract which states the contract is dependent on a favourable body corporate records search so if I find out the BC is planning on spending thousands of dollars on a project I can opt out of the contract if I want.

Nat.

[Pedro61]

Thanks Nat,

That would be a useful clause to know about. There are probably many others (finance approval for example) some I can come up with but many would be relatively obscure.

Has anyone ever seen a "checklist" of useful clauses that may be included.

Yours in ignorance

Pedro

[natmarie73]

I don't know if there are a list of clauses as such - I told the agent I wanted it in there and he was happy to do so. the vendor agreed to it so all was well. I think you could probably put in any clause you wished as long as the agent and vendor agreed to it.

Obviously if the vendor didn't agree, you could choose to walk away or negotiate. Also, I think these clauses are only enforceable for a certain period of time from the date of signing the contract.

Nat.

[Ross Sneddon]

Hi

My suggestion is to have a Body Corporate report produced by the Secretary of the BC prior to exchange. It is a moderte cost and the charge and the report content is determined in statute law. It is well worth it.

Imagine that you purchase a Strata title property without the BC report. The following day after settlement, you then receive a levy charge of $10,000 for work about to be commenced on the common property. Your're stuck with it and must pay. No argument.

Regards

Ross

[natmarie73]

Thats exactly the reason I have my clause inserted and always carry out an extensive BC search! could be very painful otherwise.

Nat.

[dtraeger2k]

contract is dependent on a favourable body corporate records

But is it you who defines whats favourable or not, you or someone else? If its you, then you could just use this clause to get out of any purchase you changed your mind on (eg if ya found a better one).

[Ross Sneddon]

Hi

The original question put by Harriet was “what is everyone’s view of the necessity to have a body corporate search done before purchase. Is it necessary?”

Most people seem to respond saying that it was their opinion that it was necessary.

How you decide to effect this advice or not is your decision based on your knowledge and advice from your solicitor.

Regards

Ross

[phm]

Hi Harriet

I was looking at purchasing a unit in another town. My solicitor advised me that either I could view these records myself, or pay a solicitor to look at them for me.

Definately very important though.

[bundy1964]

Hi

So far both my contracts in SA have had 2 years BC minutes and financials included without having to ask for them.

Is that standard for SA or was it because they are commercial units?

bundy