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DD on body corp advice sought

Discussion in 'General Property Chat' started by Whitecat, 6th Dec, 2015.

  1. Whitecat

    Whitecat Well-Known Member

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    How do I do due diligence on a body corporate in Queensland?
    Is scrutiny of the body corporate covered as having the contract reviewed by solicitor ie when they do their searches etc or do they only search for title related things?
    Does a body corp review have to be specified as a specific condition to be able to pull out of i find something (Or otherwise have to pull out in cooling off only?).
    How do I determine if the body corporate has some huge levy that is going to come on board in a few months and other things like that? How do people do this when they sign contracts? What is the approach?
    The agent for a property that I'm interested in said that one of the offers wasn't attractive to the seller as they put in a due diligence clause I don't have any reason to suspect that there is anything to hide it's a pretty basic complex but I'm just not sure how to verify. I haven't been offered a disclosure statement but my eoi has been deemed acceptable to seller (if i can come up 5k).
    Thanks
     
  2. Whitecat

    Whitecat Well-Known Member

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    "Nothing planned for the complex.
    This is the text from the owners
    It's a GTP hence the very low strata fees which basically cover building insurance and administration costs. So owners are responsible for the maintenance of the facade. Strata only covers the pebble Crete apron and shared downpipes."
    Anyone had experience with GTP?
     
  3. CU@THETOP

    CU@THETOP Well-Known Member

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    Never enter a purchase for a Body Corp without looking at the records. Try Peter Atkinson Solicitor- also specializes in B Corp searches- $2-300 usually.
    The Disclosure Statement must be available at the time of the contract. That they haven't given you one is a concern- I suspect they will spring it on you at the time of contract so you don't get a close look. It may not matter as the Disclosure document often doesn't show up the problems: it is the records search that will.

    Your EOI is accepted if you come up 5k- in other words you just bid against yourself! If the sellers didn't like a DD clause I would come back at the agent and ask why they didn't? Will something show up? You EOI was on the basis of all being clear- now you have doubts so your staying at EOI or dropping back.

    Best bet- get your lawyer to look at a draft contract first- adjust accordingly and make what offer you want not what the agent wants. Try this clause for size: (no responsibility accepted):

    1. This Contract is subject and conditional upon the Buyer obtaining an inspection of the Body Corporate records the results of which are entirely to the Buyer’s satisfaction. In the event that the Buyer is not completely satisfied with the results of the inspection of the Body Corporate records the Buyer may terminate this Contract by notice in writing to the Seller or the Seller’s agents upon within twenty-one (21) days from the date of this Contract upon which the deposit shall be refunded in full to the Buyer and the Contract shall be at an end.
     
  4. hobo

    hobo Well-Known Member

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    Not sure what GTP stands for, but have you (or your solicitor) asked for copies of the last few (ie year's worth+ of) Body Corp meeting minutes?

    Those will often reveal any pending issues.

    EDIT: ^^^ See above as well
     
  5. Whitecat

    Whitecat Well-Known Member

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    Thanks I'm not sure about the bidding against myself. I made an eoi at x amount. The owner came back and said they want 5k more. I can counter offer at 2k more or 0k more or whatever. That just seems like standard negotiation. (I think)

    The owner was made another offer by someone else but the agent said the owner didn't like the multi page DD clause that offeror included.
     
  6. Whitecat

    Whitecat Well-Known Member

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    The agent said that the owner would be likely to accept the DD clause above as a paragraph but not 2 pages.
    GTP is group title. The BC fees are reasonably low and the sinking fund is ok for the size of complex. I have the disclosure statement now.