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Call for Input into Unit Titles Act Review

Tuesday 2 May 2006

Minister Calls for Input into Unit Titles Act Review

Building Issues Minister Clayton Cosgrove said today a comprehensive review of the Unit Titles Act 1972 is being driven by big changes in the types of buildings New Zealanders live and work in.

Mr Cosgrove today launched a discussion document, Unit Titles Act: Options for Change, which seeks input from the public, and the building and housing sector.

“The fact there will be half a million people living in apartments, townhouses and high-rise buildings in Auckland alone in 50 years time, shows the review's importance."

“The Act impacts on the growing number of New Zealanders who do not live in three-bedroom homes on quarter acre sections. It is a seriously outdated piece of legislation that no longer meets the needs of users, or owners, of multi-unit residential or commercial buildings," Mr Cosgrove said.

The document's proposals include redefining the responsibilities of bodies corporate and unit owners, suggested improvements to decision-making and dispute resolution processes, changed definitions for common property and unit entitlement, and enhanced consumer protection measures.

“These and other proposals, including possible mandatory long-term financial maintenance and repair planning by bodies corporate and mandatory information disclosure by developers, bodies corporate and unit sellers, came out of the initial public consultation early last year,” Mr Cosgrove said.

“The review process – and this key second consultation period – is crucial to getting the public's views to ensure we achieve an Act flexible enough to keep up with the fast-changing environment of multi-unit building developments."

Mr Cosgrove said he encouraged all those with an interest in multi-unit buildings to contribute to reviewing and updating the law that would serve them. The discussion document is available on the Department of Building and Housing’s website at www.dbh.govt.nz and submissions close on Friday June 2, 2006.

What are Unit Title Developments?

Unit titles give ownership to a unit in a building rather than a property-right based on ownership of land. The Unit Titles Act covers the technical and legal aspects of a unit title. It also covers the rights and responsibilities of a body corporate – the collective of all owners in a unit title development that manages the building development and the common property.

Why is the Government proposing to change the law?

The Unit Titles Act was created in 1972 mainly to deal with small blocks of flats in the suburbs. It did not anticipate the growing range of uses, and the growing complexity and number of multi-unit developments that we have today, especially in the Auckland region.
The Act is now no longer working well, and lacks flexibility. It needs to address the rights and responsibilities of unit owners, bodies corporate, developers, tenants and lessees across a range of matters including governance and decision making, long term building maintenance and financial management, information disclosure, and dispute resolution.
The review builds on work already done by the Law Commission and the Auckland Regional Council.

What kind of building developments are covered?

Unit title developments are typically apartment blocks, townhouses and office blocks. However, they can have uses as varied as commercial and industrial developments, shopping malls, retirement villages, gated communities, student accommodation, time-share developments, marinas, car parking buildings, golf courses, hotels and tourist resorts.

What does this mean for existing apartment owners (and renters)?

If people own, occupy, manage or are professionally associated with a unit, then the proposals in the discussion document may affect them. They can have their say by making a submission.

How much will it cost owners (and renters)?

The Government is still consulting on options for possible change. We are hoping to get feedback on possible costs and benefits to owners, and other parties involved, of the draft proposals from submissions.

Will consumers be better protected?

The current proposals contain significant added protection for consumers. These include obligations on developers and unit sellers to disclose information to buyers. Increased information would help all parties involved make more informed decisions, and the proposed new dispute resolution process would protect all interests.

Why is it proposed to change the voting rules?

Currently under the Unit Titles Act many decisions made by the body corporate require all unit owners to vote and to unanimously agree before a decision can be made. Previous public consultation under the review has identified that this requirement can be impractical and time consuming, and often unnecessary.

One of the options in the discussion document, “Options for Change” is to remove the requirement for unanimous agreement. This would mean that unit owners who choose not to participate in voting will no longer hold up the decision making process for those who do.

How will the dispute resolution proposals help people?

The only dispute resolution provision currently available under the Act is application to the High Court. This can be time-consuming and expensive.

The disputes arising between parties involved in unit title developments are diverse in subject matter, value and complexity. Previous consultation under the review has identified a need for a dispute resolution process that is appropriate to the nature of the dispute, but is also accessible, affordable and timely.

When will the proposed new rules apply?

There will be further opportunities for public feedback on any draft legislation through the Select Committee process. This opportunity will be publicly notified. The earliest the new legislation could be completed is late 2007. As with any new legislation there will be a transitional period that will give people a chance to adjust to the new legislation.

How do people make a submission?

The discussion document, along with submission forms, is available at www.dbh.govt.nz Hard copies of the discussion document, “Options for Change”, can be requested by calling free phone 0800 83 62 62, or by emailing utareview@dbh.govt.nz

Submissions can be delivered to: Unit Titles Act Review, Department of Building and Housing, Level 6, 86 Customhouse Quay, PO Box 10729, Wellington; or emailed to: utareview@dbh.govt.nz
Submissions close on Friday 2nd June 2006.


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