Mike and Natalie signed a sale and purchase agreement on a Remuera apartment in March. Settlement was scheduled for July. In May, the body corporate held an extraordinary meeting and voted through a $12,500 special levy to repair a section of the building's facade that had been flagged by a building report. The pre-settlement disclosure statement arrived in their email inbox four days before settlement. Mike noticed the levy. Natalie called their solicitor.
The pre-settlement disclosure statement — PSDS — is the second document you'll receive when buying a unit title property. It comes from the seller no later than the fifth working day before settlement (weekends, public holidays and most of the Christmas–January break don't count as working days). Its job is to tell you everything material that has changed since the pre-contract disclosure statement was prepared.
That sounds simple but in practice it catches people out. The gap between signing and settling on a property can be months. A lot can happen in a body corporate in that time — meetings can be held, major decisions can be voted on, levies can be set, maintenance issues can escalate, legal proceedings can be filed. The PSDS is supposed to capture all of it.
For Mike and Natalie, the key question was whether they had the right to do anything about the levy. The short answer is: sometimes. If a PSDS is late, incomplete or inaccurate, the buyer can delay settlement until five working days after the seller provides a complete and accurate statement. If the seller hasn't provided a proper PSDS five working days before settlement, the buyer can go further: give written notice of an intention to cancel, which gives the seller 10 working days to put things right — and if they don't, the buyer can cancel the agreement. Whether a $12,500 levy on what was presumably a multi-million dollar apartment is worth acting on depends on the specific circumstances and usually requires legal advice.
What the PSDS must cover: any new levies that have been set or special levies voted since the PCDS was prepared; changes to the body corporate's financial position; any new legal proceedings; changes to the long-term maintenance plan; and any variations to the operational rules. It also needs to confirm that the information in the original PCDS is still accurate, or note where it isn't.
If the PSDS arrives late — fewer than five working days before settlement — or if it doesn't arrive at all, you have options. Settlement can be delayed. In some situations the sale can be cancelled. The same applies if the statement is materially incomplete or inaccurate. These aren't small rights; they exist because the legislature recognised that a lot can change between signing and settling, and buyers deserve to know what they are walking into.
The practical advice is straightforward: don't put the PSDS in your 'read later' folder. Read it the day it arrives. Compare it directly against the original PCDS. If anything has changed — any new levy, any new maintenance item, any new dispute — get on the phone to your solicitor immediately. The five-working-day window before settlement goes faster than it seems.
A building that is well managed produces a PSDS that confirms everything is as expected. The finances are current, no material changes have occurred, and the statement can be prepared quickly and accurately. If your seller is scrambling to get the statement together or it arrives with new information that catches you off guard, that is a signal worth paying attention to before settlement.
Quarter is the new body corporate — transparent, owner-first, and built for the way people actually live together. See how it works at quarter.nz.