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Bill introduced to modernise unit titles law

29 May 2008

Bill introduced to modernise unit titles law

A bill to help apartment owners and bodies corporate to manage their property more effectively was introduced to Parliament today by Building and Construction Minister Shane Jones.

The Unit Titles Bill will bring existing legislation up-to-date and clarify the rights and responsibilities for both unit title owners and bodies corporate.

Current legislation dates back to 1972 and no longer meets the requirements of modern apartment ownership, Mr Jones said.

“The changes proposed will bring the legislation into the 21st century. The Unit Titles Act has not been reviewed since the 1970s and this has created a range of problems for people in unit title developments," he said.

“One of the most significant problems with current legislation is its lack of clarity around rights and responsibilities of unit owners and bodies corporate.

“This creates disputes because people aren’t sure what they should or shouldn’t be doing. The Unit Titles Bill will clarify what their rights are respectively.”

Mr Jones said another problem with the Unit Titles Act in its current form was that it made for a cumbersome decision making process.

“At the moment, a body corporate is required to get unanimous resolution for a range of things, including maintenance and spending. If people don’t attend meetings or don’t vote, this holds up the process for everyone," Mr Jones said.

"Reducing the voting threshold to 75% agreement means the body corporate can act in the interests of the majority of unit owners for the good of the development as a whole.”

Mr Jones said current dispute resolution mechanisms are inadequate. The Unit Titles Bill will allow people to use mediation and adjudication through the Tenancy Tribunal to sort out their disputes.

He said sound property management practices to protect long-term value of developments will be encouraged by requiring bodies corporate to establish long-term maintenance plans.

Because multi-unit living is expected to become increasingly necessary, Mr Jones says it is essential to provide flexibility and certainty to those who are developing and building multi-unit developments.

“The Unit Titles Bill will streamline development processes and allow flexibility for those who are building the really big developments. This will mean up-front costs are reduced and developers can make changes to their plans more easily.”

He added, the review included consultation on two discussion documents to find out how unit owners, bodies corporate and the property development sector thought the Act should be changed.

Unit title developments such as apartments and townhouses were a new housing style when the Unit Titles Act came into force 36 years ago," Mr Jones said.

“The Act was developed to deal with developments that, by today’s standards, are very small and uncomplicated but there have been major changes in the past few decades in the number, scale and nature of residential and commercial property developments,” he said.

“That trend is expected both to continue and to accelerate, particularly in the Auckland region, where it is estimated that within 50 years 500,000 people will be living in apartments, townhouses and high-rise buildings.”

There are currently an estimated 16,422 unit title developments in New Zealand comprising 95,416 units. Approximately 88 percent these developments have nine or less units. Approximately 70 percent of all unit title developments are residential. The rest are commercial, industrial and a small number in the horticultural, agricultural and mining sectors.
Mr Jones said the 1972 Act is no longer able to provide a sound basis for the creation and sustainable management of intensive, multi-unit developments.

“In particular, unit title tenure nowadays does not work well for developments that are complex, built in stages or have mixed uses.

“The proposed changes will provide broader and more adaptable ways of setting up and managing multi-unit living, both now and in the foreseeable future.”


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