John and Vicky had always dreamed of retiring to a trendy city fringe apartment with sea views, close to cafes and shops. They had found the perfect apartment and fallen in love with the amazing views from the balcony and the immaculate gleaming kitchen. John and Vicky had heard that there were some possible “fishhooks” with buying an apartment, so they signed the agreement with a due diligence condition, they ordered a builder’s inspection, and they asked for copies of the minutes from the AGMs from the last 5 years.
John and Vicky’s lawyer reviewed the agreement and told them about some other information that they should request. The builder’s inspection only looked at the interior of the apartment. It was more important to find out whether there were any issues with the exterior, especially leaky building issues. Sometimes AGM minutes can be treated as a marketing document for the building, so the real issues might be discussed at other meetings. John and Vicky were advised to ask for copies of minutes of any extraordinary general meetings and other committee meetings. They were also advised to speak directly to the chairperson of the body corporate.
John and Vicky’s lawyer provided them with a copy of the body corporate rules and recommended that they read the rules carefully to make sure that the restrictions were something they could live with. He also advised them to get hold of a copy of the long-term maintenance plan which Body Corporates are required to have by law – and to check that the plan was actually being executed. They should also find out whether the body corporate was putting aside savings for expensive works such as replacing the roof and lifts.
John and Vicky took their lawyer’s advice and got really serious about carrying out a thorough due diligence on the apartment building before making their final decision about whether to proceed. Their dreams of a happy retirement depended on it!
If you are in the market to buy an apartment, please contact us for good legal advice that will give you peace of mind.