Justice minister Paul Lucas has so far ignored pleas from Queensland real estate agents to halt the start of BCCMA changes that have brought industry-wide confusion from complex lot entitlement amendments and internal inconsistencies in the legislation itself.
The changes – which caught agencies and body corporate managers by surprise when they began on April 14 – have introduced yet further re-tooling and compliance overheads for the industry and PAMDA-like uncertainty that will cost buyers, sellers and real estate agents more millions in disputation fees and contract termination losses.
The signed BCCMA 206 disclosure statement that must be given to the buyer before they sign a contract is now required to state “the extent” to which contributions are based on “contribution schedule” entitlements on the one hand and on “interest schedule” entitlements on the other.
Our last post demonstrated that the “extent” is in many cases – despite what the BCCM commissioner has recommended – unlikely to be able to be expressed as a ratio or percentage or even as a dollar amount unless the body corporate administrator has accurately calculated that amount.
Agents will be relying on sellers and body corporate secretaries to provide this information but the agent will still be in the firing line if the “extent” has not been accurately expressed in every case.
Agents must also be on guard if a new community management statement is recorded between contract and settlement. In such cases, the seller must give the buyer a copy within 14 days. As you would expect, the buyer is given the right to terminate if they are “materially prejudiced” by the new CMS. That also applies to any inaccuracies in the disclosure statement: s 209.
However s 209 – which refers to the situations in which the buyer can terminate – unusually refers in s 209(1)(b)(ii) to the community management statement being “attached to” the contract. Nowhere else is there any mention of the CMS being required to be attached. Rather, s 206 (2)(i) states the disclosure statement may simply be “accompanied by” the CMS.
Regretably, this inconsistency will be the subject of protracted and expensive lawsuits over the next few years that agents will be lucky to escape.
Version 10 of the approved BCCMA 14 warning statement was issued on Friday with contract & forms provider ADL doing likewise that day. Version 9 may be used until the end of May. If the incorrect version is used after May, buyers will likely be entitled to terminate and agents will be exposed to any losses resulting to the seller.