Property guidance by Quay Law
Property guidance by Quay Law
Unit title guidance from Quay Law
Ian Mellett, Barrister and Solicitor, Quay Law
Body corporate levies are the main ongoing cost of owning a unit title, alongside rates, insurance on your contents and any mortgage. Understanding how they are set, and where the money goes, is central to understanding the true cost of a purchase.
Each year the body corporate prepares a budget, which is approved at the annual general meeting. Levies are then calculated to fund that budget.
Each owner’s share of body corporate levies is generally based on the utility interest of their unit. Utility interest may initially equal ownership interest, but it can be reassessed and different sets may apply to particular costs. Levies are usually paid in instalments across the year.
Levies are paid into one or more funds, each with a different purpose.
The operating account pays for the running costs of the development: insurance premiums, management fees, cleaning, gardening, power for common areas, routine repairs and similar expenses.
The long term maintenance fund builds up money for the larger items identified in the long term maintenance plan, such as repainting, roof replacement or lift upgrades. A body corporate may decide not to have a long term maintenance fund, but that decision must be confirmed each year.
Some bodies corporate also hold a contingency fund for unexpected costs, such as urgent repairs or an insurance excess.
When the funds available are not enough to meet a cost, the body corporate may raise a special levy. Special levies are commonly raised for remediation, major repairs or unbudgeted expenses. Buyers should check when a levy was or will be raised, its payment dates and how the sale agreement allocates the cost between buyer and seller.
Owners who do not pay their levies may face recovery action by the body corporate, and generally cannot vote at general meetings until they are up to date. A pattern of unpaid levies across the development can place pressure on the body corporate’s finances.
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.
How ownership interest and utility interest affect body corporate levies, voting and costs in a New Zealand unit title development.
When the unit title pre settlement disclosure statement is due, what it confirms, and how body corporate levies are apportioned between seller and buyer.
What to look for in body corporate AGM and committee minutes and financial statements before buying a unit title, explained by Quay Law Auckland.
If you want to understand the real cost of a unit title before you buy, we can review the levies, budget and funds for you.
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.