DISCLOSURE RULES WHEN SELLING AN APARTMENT
There are several areas in which selling an apartment differs from selling other types of property and where apartment sellers need to be cautious about attending to the rules.
Below we highlight some areas where due diligence must be done by sellers.
Full disclosure is a legal obligation for apartment sales. Because the disclosure obligation lies with the owner of the property, you should actively participate with your real estate agent in preparing the disclosure statements.
Under the Unit Titles Act 2010 people must meet four different types of disclosure requirements when selling an apartment.
Real estate agencies are required by law to have vendors sign a document acknowledging full disclosure.
Not all real estate agents have experience selling apartments so it is important to choose one that can guide you safely through the process.
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EXAMPLES OF APARTMENT SALE DISCLOSURES
- Weather-tightness issues. See Selling a Leaky Apartment.
- Items to be included for sale which are faulty.
- Building consents and code compliance certificates.
If you know about issues and don't disclose them, then you may later be held liable by the purchaser.
UNIT TITLES ACT: FOUR TYPES OF DISCLOSURE
Pre-contract disclosure: Apartment sellers must provide a statement to buyers before signing a sale and purchase agreement covering:
- Unit titles
- Your unit
- Body Corporate levies
- Weather-tightness both for the unit and common property
- Funds held by the Body Corporate
Pre-settlement disclosure: Required once a sale and purchase agreement is on the table, but before it has settled. It shows the period levies are paid until and any amounts owing to the Body Corporate.
Additional disclosure: If requested by the buyer (buyer meets the cost). For instance, summaries of the long-term maintenance plan, details of regular expenses and the Body Corporate’s current contracts.
Turn-over disclosure: Not about the unit for sale. This is a statement provided by the original owner or developer to the Body Corporate.
DUE DILIGENCE WHEN SELLING AN APARTMENT
Managing the sale of an apartment requires care and due diligence throughout what can be a complicated process.
The process of selling an apartment successfully starts with your preparation and most importantly, your choice of real estate agent and legal advice because you are reliant wholly on what they advise you.
Fortunately there are professionals with the right expertise, and we can help put you in touch with them.
Also Read: How to Sell An Apartment
Planning to sell your apartment? Get our free help to find an experienced real estate agent. Contact us or phone 0800 789 532
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Article updated March 3, 2023 by Trish Willis | Member of Property Institute of NZ (IPAC)
