Buying and Selling in a Body Corporate or Strata Scheme
What to check before you buy or sell in a scheme.
Buying or selling a property in a body corporate (or owners corporation in NSW) involves extra steps compared to a standard house sale. From understanding levy obligations to reading disclosure statements, knowing what to look for protects your investment. These FAQs cover the key things buyers and sellers need to know. Want to make sure your building is well managed before you buy or sell? Get 3 free proposals from established and trusted body corporate managers.
What should I check before buying a unit in a body corporate scheme?
Before buying, get a body corporate records search (called a strata search in NSW). This will show you the current levies, the sinking fund balance, any outstanding debts or special levies, the by-laws, recent meeting minutes, and whether any major works are planned. It is also worth checking whether the building has any active disputes or insurance claims. A records search costs a few hundred dollars and can save you from an expensive surprise.
What is a body corporate records search?
A body corporate records search (strata search in NSW) is a detailed report on the financial and administrative health of the scheme. It includes the current budget, levy amounts, sinking fund balance, outstanding debts, insurance details, by-laws, recent minutes, and any pending legal matters. Your conveyancer or solicitor can order one on your behalf, or you can request it directly from the body corporate manager.
What is a disclosure statement and why does it matter?
In Queensland, the seller must provide a disclosure statement to the buyer before the contract becomes binding. This document outlines the current levies, any outstanding amounts owed by the lot, the body corporate’s insurance details, and any motions or issues that could affect the buyer. In NSW, a similar requirement exists through the strata information certificate under Section 184 of the Strata Schemes Management Act 2015. Always read the disclosure statement carefully before signing.
Who pays the levies when a property is being sold?
Levies are typically adjusted at settlement so the buyer and seller each pay their share based on the settlement date. If the seller has prepaid levies beyond the settlement date, the buyer reimburses them for the unused portion. If the seller owes outstanding levies, these must be cleared at or before settlement. Your conveyancer will handle the adjustment as part of the settlement statement.
Am I liable for debts the body corporate had before I bought my lot?
You are not personally liable for debts that existed before you bought your lot. However, if a special levy was raised before settlement and has not been paid by the seller, the body corporate may pursue the lot rather than the individual. This is why a records search before purchase is so important. Make sure your conveyancer checks for any outstanding or upcoming special levies before you settle.
What is a sinking fund forecast and why should I care?
A sinking fund forecast (capital works fund plan in NSW) is a report that estimates the major repair and replacement costs the building will face over the next 10 or more years. It tells you whether the current sinking fund balance is on track or if a shortfall is likely. A healthy sinking fund means the scheme is financially prepared. A weak sinking fund could mean a special levy is coming, which directly affects your costs as an owner.
Can I see the by-laws before I buy?
Yes. The by-laws should be included in the records search or disclosure statement. Read them carefully, especially rules about pets, renovations, parking, short-term letting, and noise. By-laws are legally enforceable, and once you buy in, you are bound by them. If there is a by-law that would significantly affect how you plan to use the property, it is better to know before you commit.
What should I look for in the meeting minutes?
Meeting minutes tell you what the committee and owners have been discussing and deciding. Look for any mentions of major repairs, disputes between owners, insurance claims, proposed special levies, or motions to change by-laws. If the minutes show repeated discussions about the same maintenance issue without resolution, that could be a red flag. Minutes from the last two AGMs and any recent EGMs are the most useful.
Does buying an investment property in a body corporate scheme have extra considerations?
Yes. If you plan to rent the property out, check the by-laws for any restrictions on tenants, short-term letting, or Airbnb-style rentals. Some schemes have strict rules about tenant behaviour, move-in procedures, and use of common facilities. You will also need to make sure your tenant receives a copy of the by-laws and understands the rules. As the owner, you remain responsible for your tenant’s compliance.
How do I sell my unit in a body corporate scheme?
Selling a unit in a body corporate scheme follows the same general process as selling any property, with a few extra steps. You will need to provide the buyer with a disclosure statement (QLD) or strata information certificate (NSW), make sure your levies are paid up to date, and disclose any known issues with the building or common property. Your real estate agent and conveyancer will guide you through the strata-specific requirements.
What happens to my committee role if I sell my lot?
If you are on the committee and you sell your lot, your committee membership ends when settlement occurs and you are no longer a lot owner. The remaining committee members continue until the next AGM, where a new committee is elected. If the committee falls below the minimum number of members, the body corporate may need to call an EGM to fill the vacancy.
Can I buy into a body corporate scheme that is being wound up or terminated?
It is possible but risky. A scheme termination means the body corporate is being dissolved, usually because the building is being sold for redevelopment. If you buy a lot in a scheme that is being terminated, you may receive a share of the sale proceeds rather than keeping the property. Always check the records search and disclosure statement for any termination motions or developer buyback offers before committing.
What is a Section 184 certificate? (NSW)
A Section 184 certificate is a document issued under the Strata Schemes Management Act 2015 in NSW. It provides key information about the strata scheme, including the current levies, any amounts owing on the lot, the sinking fund balance, insurance details, and any special resolutions or legal proceedings. Buyers in NSW should always request a Section 184 certificate as part of their due diligence before purchasing.
What is a Body Corporate Information Certificate? (QLD)
In Queensland, a Body Corporate Information Certificate provides similar information to the NSW Section 184 certificate. It includes details of the current levies, any outstanding contributions for the lot, the sinking fund balance, insurance, by-laws, and any pending motions or disputes. The certificate is issued by the body corporate manager and is a standard part of the conveyancing process when buying a lot in a community titles scheme.
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Explore more topics
- Getting Started with Body Corporate and Strata – The basics every new owner needs to know
- Fees and Costs Explained – Understand levies, sinking funds, and what you are paying for
- Financial Management – How the body corporate manages its money and what to look for
- Owners and Tenants – Rights and responsibilities for owner-occupiers and investors
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Primary sources and further reading
The information on this page is drawn from the following primary sources. Use these for the definitive legal position in your jurisdiction.
Queensland
- Body Corporate and Community Management Act 1997 (Qld)
- Queensland Government, Body corporate information
- Queensland Civil and Administrative Tribunal (QCAT)
New South Wales