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Unit Titles Bill: A Summary of Proposed Changes to the Unit Titles Act 1972

The first reading of Unit Titles Bill in Parliament was on 5 March 2009. The bill will now be sent to the Social Services Select Committee for consideration.

The aim of the Bill is to make it easier to set up a unit title development and make the process more flexible and simple to manage. The Act is considered outdated especially with apartment living having become more popular.

A copy of the bill can be downloaded here.

Below we summarise the proposed changes.

• Each principal unit and each accessory unit in a development shall be assigned an ownership interest. This is to be fixed by a registered valuer on the basis of the relative value of the unit in relation to each of the other units on the unit plan. Each principal unit and accessory unit will also be assigned a utility interest.

• Under the bill the body corporate owns all common property and this property is managed on behalf of all owners for the good of the development. Under the Unit Titles Act a leaking roof would have been the responsibility of the top floor unit owners, whereas under the new Bill this will become the Body Corporates responsibility.

• Large, staged or mixed-use developments can be layered with a Head Body Corporate and Subsidiary Body Corporates. In this instance the Head Body Corporate will be responsible for the management of the development. An advantage of this will be that developers will be able to comply with subdivision consents in stages rather than having to meet all conditions at the outset of the development (as was required by the previous act).

• Previously unanimous decision making by the body corporate was required under the previous act. Under the new act decisions will be made based on 75% agreement (or greater). Those who disagree with the motion can apply to have their views heard through mediation.

• Body Corporates will be required to establish long-term maintenance plans to protect the development and enable owners to plan and pay a regular amount for maintenance over time.

• Disputes will be referred to the Tenancy Tribunal first rather than straight to the Courts. This is intended to make the resolution process faster and cheaper.

• The bill aims to introduce new disclosure requirements for purchasers. Purchasers will be entitled to a list of information about the development upon request. This might include the Body corporate rules, audited accounts and maintenance plans etc.

The information above has been sourced from: www.beehive.govt.nz

All reasonable measures have been taken to ensure the quality and accuracy of the above information, however Seagar & Partners makes no warranty, nor assumes any responsibility for the accuracy, correctness or use of any of the information or the interpretation thereof.