Can an off-the-plan purchaser request accurate levy information from the developer before settlement?

Under section 68(4B)(a) of the Owners Corporations Act 2006 (Vic), the developer (as the "initial owner") must not propose an annual budget that is unreasonable or unsustainable. This legal obligation is intended to ensure that owners corporation levies are realistic and reflective of actual costs from the outset.

In addition, under section 68(1), the initial owner is required to act honestly, in good faith, and with due care and diligence in the interests of the owners corporation during the period in which they control the majority of lot entitlements.

The initial owner (being the applicant for registration of the plan of subdivision) is also responsible for convening the first meeting of the owners corporation within six months of registration of the plan. At this inaugural general meeting, the first annual budget for the owners corporation is approved, setting the levies for its initial financial year.

A purchaser's solicitor or conveyancer should request a copy of the minutes of the inaugural general meeting, which will include the approved budget for the first financial year of the owners corporation. This may be accompanied by a detailed budget statement outlining expenses for insurance, maintenance, building and owners corporation management fees, utilities, and other operational costs. If a maintenance plan has been approved, contributions to the maintenance fund should also be included. The vendor's solicitor should provide the figure required at settlement for an off-the-plan purchase based on the approved budget.