A member asked the team at NEW KIDS this past week. Uhmmmm. A lot!
Buying anything that has a body corporate is not for the faint of heart!
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Be extremely careful here. A fast way to lose a lot of money.
Here is a case study a week ago. A client instructed us to inspect a unit in a body-corporate for purchase. We won’t provide address details here. But upon asking how was the body corporate doing managing the body corporate it was found that the subject unit for sale had $38,000 + arrears. The agent pointed that the arrears would be paid by the sellers upon settlement. (Rough value of unit NZ$300,000, in complex of 9+)
We see arrears in body corporates all the time. Due diligence is really important and make sure you have compendant Lawyer who actually understands the body corporate structure’s.
Note, If buying into a large body corporate property then we would stress a accountants inspection of the financials, Future expenses, Current expenses, and past expenses.
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@RealHelp, very helpful information. Caveat Emptor. Thanks.
*Caveat Emptor is Latin for “let the buyer beware”. It is a principle in contract and commercial law which dictates that the buyer is responsible for assessing the quality, suitability, and condition of a product or property before making a purchase.
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Also when checking body corporates, hone down to future expenses, eg lift replacement or window replacements and see how the body corporate is funding those projects.
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