August 16 2011
Since the Unit Titles Act 2010 came into force on 20 June 2011, we expect to see a greater level of transparency and disclosure of relevant information in respect of unit title properties. The contents and effect of management agreements (MA) are often overlooked when entering into Agreements for Sale & Purchase (the Agreement).
If you are selling a unit, the subject of an MA consideration should be given at the outset as to whether the buyer intends to become a party to the MA – or not. Care and advice needs to be taken in drafting the Agreement to ensure that any notice periods for ending the MA are recorded and adhered to, and any options to purchase – or first rights of refusal to purchase – are satisfied. A recent decision of the Real Estate Agents Authority Complaints Assessment Committee¹ provided that any commissions payable to Real Estate Agents in respect of the MA should be supported by an Agency Agreement (s126 of the Real Estate Agents Act 2008).
NB: There is more on the unit titles legislation requirements for long term maintenance plans, and pre-contract and pre-settlement disclosures on “New Unit Titles Legislation now in Force“
¹ Complaints Assessment Committee, Robyn Wilson, Real Estate Agents Authority Summit Real Estate Limited CA3976464, CAC10012 1 June 2011