This article discusses whether an owner must disclose mortgage details to strata under NSW law.
Question: Our new strata management company requested financial details about lot ownership. Am I legally obligated to tell them whether the property is mortgaged?
We have a new strata management company. They have sent owners a letter to update their current information, including the details of the financial status of ownership, i.e. is the property owned or mortgaged? If mortgaged, who is the loan with? If the mortgage has been discharged, what is the date of discharge?
This information is private and has nothing to do with our property’s management. I do not wish to give this information. Am I legally obligated to tell them?
Answer: Secretaries or strata managing agents often remind owners to provide legally required accurate information.
When a person or corporation takes ownership of a lot in a strata scheme, they are required to give notice of this under section 22 of the Strata Schemes Management Act 2015 (NSW) (‘the Act’).
That notice (known as a “strata interest notice”) ultimately gives that person the right to vote in meetings and generally to be recognised as an owner in the strata scheme.
Specifically, the legislation states, “the strata interest notice must specify the following information and, if the interest is a mortgage, include confirmation by the mortgagor or be verified by statutory declaration of the mortgagee”.
It is, therefore, incumbent on an owner to provide this information, and it is usually provided by conveyancers during the sales process.
The reason for this? There are over 80 references in the Act where mortgagees are required to be given notices or can be jointly liable. In this article, I will refrain from attempting to explain all of these requirements.
From time to time, owners may forget to provide certain information that is supposed to be provided and recorded on the strata roll of a strata scheme. It is, therefore not uncommon for a secretary or strata managing agent to write to owners to remind them to provide accurate information that is supposed to have been given under law.
For more information about the specific details an owner must give, we refer to section 22 of the Act.
This post appears in the November 2023 edition of The NSW Strata Magazine.
Tim Sara
Sara Strata
E: tim@sarastrata.com.au
P: 04 8500 7960
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