Property guidance by Quay Law
Property guidance by Quay Law
Unit title guidance from Quay Law
Ian Mellett, Barrister and Solicitor, Quay Law
The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 made the most significant changes to unit title law since the Unit Titles Act 2010 came into force. The changes affect buyers, sellers, owners, committees and body corporate managers.
The Amendment Act received Royal assent on 9 May 2022. Its provisions came into force in stages to give the sector time to prepare:
Unit Titles Services provides official guidance on the Unit Titles Act 2010, the regulations and the reforms.
The pre contract disclosure statement was substantially expanded. It must now include or be accompanied by three years of meeting minutes, three years of financial statements and audit reports, the long term maintenance plan and information about known weathertightness issues, earthquake prone issues and other significant defects.
The previous prescribed form was repealed, and the additional disclosure statement that buyers could previously request no longer exists. Buyers may have rights to delay settlement or cancel if pre contract or pre settlement disclosure is not properly given. The notices, time limits and opportunity to correct disclosure depend on the right being exercised.
The reforms introduced the concept of a large development, being one with ten or more principal units. These developments must have a body corporate manager unless they opt out by special resolution. Their long term maintenance plans must cover at least thirty years and be reviewed at least every three years, or sooner after a material change. Professional input is required unless the body corporate opts out by special resolution.
Committee members and body corporate managers must now comply with a code of conduct. This includes understanding and complying with the legislation, acting in the best interests of the body corporate and disclosing conflicts of interest. Management contracts must include certain minimum terms, such as reporting requirements, performance reviews and grounds for termination.
Bodies corporate may now use multiple sets of utility interests, allowing particular costs to be shared in a way that better reflects how owners use a service. Lift costs and ground floor units are a common example.
The reforms provided greater flexibility in how owners attend and vote at general meetings. Owners must generally be up to date with their levies in order to vote.
The reforms gave the regulator new compliance tools, including the ability to issue improvement notices.
The fundamental structure of unit title ownership remains the same. You still own your unit, share the common property through the body corporate, pay levies and are bound by the rules. The two stage disclosure process, pre contract and pre settlement, also remains.
What a unit title pre contract disclosure statement must contain since 2023, what to look for when reading it, and your rights if it is late or incomplete.
What a body corporate long term maintenance plan must contain since 2024, how to read one before buying, and the warning signs to look for.
Since May 2023 buyers may delay settlement or cancel if unit title disclosure is late, incomplete or inaccurate. How the process works for buyers and sellers.
How ownership interest and utility interest affect body corporate levies, voting and costs in a New Zealand unit title development.
If you are buying, selling or managing a unit title and want to understand how the reforms affect you, we can advise on your specific situation.
If you are buying or selling a unit title property in Auckland, we recommend speaking with us before you sign an agreement. Contact Ian Mellett at Quay Law, Barrister and Solicitor, by completing our enquiry form below, or call us on 09 523 2408.
The information on this page is provided for general information purposes only and is not legal advice. Every transaction is different, and all matters should be discussed with the team at Quay Law.