When giving Form 28 and Form 29 to your buyers, it’s essential to ensure that the Form 28 is completed correctly. Failure to do so can lead to unnecessary complications in the settlement process.
For example, in a recent settlement case, the Form 28 given to the buyer failed to name the agent managing the strata company. As a result, the buyer’s settlement agent wasn’t able to contact the strata manager to obtain a Section 43 Certificate, which discloses the details of the strata levies.
Our client, the seller, knew the details of the strata manager – however, the seller was overseas and and couldn’t be contacted for weeks. When we finally did manage to obtain the details of the strata manager, it was on the morning of settlement and there was not enough time for the strata manager to prepare and deliver the Section 43 Certificate.
Since the outstanding strata levies weren’t known, the buyer’s settlement agent couldn’t arrange for these to be paid by the seller. Instead, we arranged for funds to be held back with which to pay the levies – however, the amount of these funds was an estimate.
In this case, the estimate was enough to cover the strata levies, but there was a risk that the funds held would be insufficient. Extra funds may have proved difficult to obtain from the seller after settlement, which could conceivably have led to legal action.
As the information in Form 28 is required to be provided under the Strata Titles Act 1985 (Sections 69, 69A and 69B), it’s also possible that a buyer that doesn’t receive a completed Form 28 could attempt to refuse to settle.
To avoid these complications, simply ensure that the Form 28 is filled out correctly. By doing so, you’ll be well on your way to a smooth settlement.
Image by The JR James Archive via Flickr.