Three days before settlement on a Grafton apartment, the buyers' solicitor spotted a problem. The pre-settlement disclosure statement showed the long-term maintenance fund had $37,000 in it. The pre-contract disclosure statement, which the buyers had signed off on two months earlier, showed $117,000. A special resolution had been passed at an extraordinary meeting six weeks prior, drawing $80,000 from the LTM fund to cover urgent remediation work. The PCDS had not been updated. The buyers had 72 hours before settlement and a very tight legal window.
The Unit Titles Act gives buyers specific rights when the disclosure documents they receive are wrong. Those rights are real and sometimes powerful — but they come with conditions, timeframes, and a fair amount of nuance. Understanding them before something goes wrong is considerably more useful than trying to understand them in a panic on the day before settlement.
The grounds for exercising these rights are: the disclosure statement wasn't given at all; it was given late; it was incomplete; or it was inaccurate. 'Inaccurate' doesn't mean having a typo in the address or getting the building name slightly wrong. It means information that materially misrepresents the financial position, legal standing or physical condition of the body corporate or the property.
What can you do if one of these things applies? For the pre-contract disclosure statement, a buyer who didn't receive it before signing can cancel the sale and purchase agreement. If the statement was given but was late, incomplete or inaccurate, the buyer may also be able to cancel — though the right to cancel isn't automatic and the materiality of the error matters. Your solicitor needs to assess the specific situation.
For the pre-settlement disclosure statement, the rights are slightly different. A buyer who doesn't receive a complete and accurate PSDS at least five working days before settlement can delay settlement — until five working days after the seller provides one that is complete and accurate. Or the buyer can give written notice that they intend to cancel: the seller then has 10 working days to comply, and if they don't, the buyer can cancel the agreement. In the Grafton case, that was the lever.
There are some things worth knowing about how these rights work in practice. First, they have to be exercised in writing and within specific timeframes — missing a deadline can mean losing the right. Second, the seller has some ability to remedy problems: if they fix the issue and provide a corrected statement, that can affect whether cancellation remains available. Third, 'I just don't want to buy anymore' isn't a ground for cancellation — the rights are specifically tied to disclosure failures, not general second thoughts.
In the Grafton case, the buyers and their solicitor spent 48 hours working through whether the undisclosed $80,000 drawdown from the LTM fund constituted a material inaccuracy. Their view was that it did — $80,000 changes the financial picture of the body corporate significantly. After negotiation, the parties agreed to a price adjustment rather than cancellation. The buyers got a credit for a portion of the LTM fund shortfall. Not the outcome they planned for, but better than the alternative.
The lesson isn't to go looking for reasons to cancel. Most unit title purchases complete without any issue. The lesson is to read both disclosure documents carefully, engage a solicitor who knows unit title law, and act quickly if something doesn't stack up. The rights exist because the disclosure regime is supposed to protect buyers. You're entitled to use them when it genuinely matters.
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