What is a Unit Title? Thousands of people in New Zealand now live in medium and high density Unit Title developments and this trend is set to increase in the future. Unit Title ownership means that you have ownership of your defined dwelling (“unit”), and that you also have joint ownership in common with other unit owners of your shared areas (known as “common property”) such as driveways, swimming pools, courtyards and lifts etc. Multi storey buildings, apartment complexes and townhouse developments (including pensioner flats) are common examples.
July 2007 by Julian Clarke
The practical and legal aspects of ownership of a Unit Title property are covered by the Unit Titles Act 1972. That Act covers the rights and responsibilities of a Body Corporate, which is the collective of all owners in the development and which is responsible for managing the building, common property areas and shared expenses such as rates and insurance.
Why is the Unit Titles Act being reformed? The current Act was not designed to meet the requirements of today’s contemporary housing and commercial needs such as unit developments with mixtures of retail, office and residential use and also fails in other areas.
What are the Key Proposed Changes?
Clarifying the rights and responsbilities of Unit owners, the Body Corporate, developers and tenants.
Ensuring that all Bodies Corporate are making appropriate provision for the long term maintenance of Unit Title Developments, including introducing requirements for the establishment and management of long term maintenance plans and funds to cover one-off expenses such as upgrading common areas.
Introducing disclosure requirements for vendors, Bodies Corporate and developers to ensure that potential purchasers, current unit owners and Bodies Corporate have access to sufficient information to make an informed decision about their Unit Title investment.
Requiring vendors to provide a potential purchaser with copies of essential information relating to the unit, such as details of annual levies, Body Corporate rules, details of contracts between the Body Corporate and independent parties for the management of the Development, accounts of the Body Corporate and details of insurance.
Requiring developers to disclose to the Body Corporate all building plans and specifications, maintenance schedules, assets schedules, details of all warranties/guarantees and details of all proposed existing maintenance and service contracts. An original Body Corporate will be able to review any contracts a developer entered into when acting as the original Body Corporate.
Removing the present regid requirement for unanimous resolution for Body Corporate decisions to allow more flexibility in managing the Body Corporate.
Providing a more efficient and effective dispute resolution process whereby the Government will establish a dispute resolution service for Unit Title matters covering education and information, mediation and adjudication.
Providing different types of Body Corporate models for different types and sizes of developments.
Allowing for large, staged or complex developments to be set up and managed more easily.
Allowing for the Body Corporate rules to be more flexible and to be tailored to specific individual unit development needs. There will be a set of core provisions relating to fundamental property rights and significant management decisions that will not be able to be altered.
What does this mean for exisiting Unit Title owners or occupiers? If you own, manage or are professionally associated with a Unit Title property or development, then the proposals will affect you. Please contact one of our property specialists if you have any queries regarding how the proposed changes may affect you.
