Coronavirus (COVID-19) Information: We take the safety and well-being of our clients and staff seriously.
For information on appointments with us or attending our offices, please read this notice.

Have you recently bought a Unit ‘off the plan’ or thinking of buying a Unit ‘off the plan’ in the ACT? If you answered ‘yes’ then you should familiarise yourself with the recent changes to laws affecting Units a(and in particular ‘off the plan’ units) in the ACT.

Changes to Unit Title Legislation in the ACT

Earlier this year the Unit Title Legislation Amendment ACT 2020 was brought into effect in the ACT, with the majority of the amendments commencing on 1 November 2020. With changes being made to over a dozen different pieces of existing legislation, the amendments are wide ranging, and will impact everyone from developers; new buyers considering purchasing into unit developments; existing buyers waiting for their off-the-plans purchases to complete construction; and current owners as well as owners’ corporations more generally.

Whilst it would be impossible to set out all of these changes in a single article, below are some of what we view as the most interesting and important developments.

Disclosure Statement & Disclosure Update Notice

For off-the-plan unit developments where the Units Plan has not yet registered, there will be a new requirement for the developer to provide any potential buyers with a Disclosure Statement. The new Disclosure Statement is optional from 1 November 2020, but will be mandatory for all new Contracts entered into from 1 July 2021.

The purpose of the Disclosure Statement is to provide buyers with a broad range of information regarding the property, and there will be an implied warranty that the information provided in the Disclosure Statement is accurate.

Included in the Disclosure Statement, amongst other things, will be plans of the unit and common property, a Building Management Statement (more on these later), details of proposed uses in the development, any proposed owner’s corporation rules, and estimates of levies.

In addition, there will be a further requirement on developers to notify buyers of any material change to the information provided, which will be done by way of a Disclosure Update Notice. If the information provided in the Update Notice can be considered to significantly prejudice the buyer, then the buyer will (within certain timeframes) be allowed to rescind the contract.

Building Management Statements

Also optional from 1 November 2020, but mandatory from 1 July 2021, will be the inclusion in certain contracts of a Building Management Statement. These will apply in mixed use developments where multiple crown leases are registered within a single building, and are intended to set out more clearly how the building as a whole and any common property are to be managed. In particular they will set out the allocation of any shared expenses for the building, and establish a Building Management Committee to oversee issues going forward.

Notification of Units Plan Registration

From 1 November 2020, developers are now required to give buyers under off-the-plan contracts a copy of the registered units plan, as well as any alternative owners corporation rules, prior to completion of the purchase. The buyer must also be allowed at least 21 days from receiving the documents before completion can be required. This is a significant change as, generally speaking, off-the-plan contracts have historically only allowed buyers either 14 days or 10 business days to complete following registration of the units plan. In particular, this additional time will assist buyers in finalising their finance prior to completion, but will also allow buyers to properly appraise themselves as to what is included as part of their unit, and what is not.

These changes will benefit not only buyers under new contracts, but also existing off-the-plan contracts signed before 1 November 2020.

Defects and Maintenance

Efforts have also been made to better address and regulate how defects and maintenance in new unit developments are handled.

Going forward, developers will no longer be able to vote on any motion at an owners corporation meeting with respect to defective building work.

In addition, for all units plans registered after 1 July 2021, developers will be required to submit a Developer’s Maintenance Schedule at the first AGM of the owners corporation. This must include a schedule for maintenance and inspection of common property equipment and structures, as well as details of warranties, manuals, and contact information for all manufacturers and installers. On the basis of the Developer’s Maintenance Schedule, the owners corporation must then prepare a Maintenance Plan for the development.

Default Rules and Alternative Rules

A new set of Default Rules have been introduced for all owners corporations, including existing owners corporations. These govern issues such as payment of rates, repairs, maintenance, alterations, and use of common property. In a notable change to the previous default rules, the new rules also include a specific permission for owners to keep pets on their property.

The owners corporations may also, by special resolution, make Alternative Rules amending its rules from those of the Default Rules. However, there are limitations on which of the Default Rules may be amended. A copy of the Alternative Rules must also be included in the Disclosure Statement for all new developments.

If you are a developer, current owner or new buyer in a unit title development and feel you may be impacted by any of these changes, or are interested in finding out more, please contact Emma Bragg on (02) 6140 3263 or by email to [email protected] to discuss.