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Apartment block modernising bill's first reading

Hon Phil Heatley
Minister of Housing


 

5 March 2009
   Media Statement
 

Modernising bill gets first reading

A bill intended to modernise the way apartment blocks are built and managed received its first reading in Parliament today.

The Unit Titles Bill will make setting up unit title developments easier and more flexible as well as streamline and simplify the way multi-unit developments are managed.

The Bill was referred to the Social Services Select Committee and the public will soon have the opportunity to make submissions on the proposed changes.

Housing Minister Hon Phil Heatley said the proposed changes will make unit title developments easier to manage and provide more clarity and flexibility for unit owners, bodies corporate and developers.

Mr Heatley said: “The old Unit Titles Act is out of date and is not meeting the needs of modern, intensive property developments.  This Bill updates the Act at a time when apartment living is becoming increasingly popular.

“I look forward to making the sort of real, concrete improvements to unit title legislation that those living in and working with unit title developments have been waiting for.

“There was widespread agreement the current Act needed to be changed, and there has been widespread support for the proposed changes in the Bill.

“There are over 16,000 unit title developments in New Zealand with nearly 96,000 units.  Around 70 percent of these are residential.  This trend is set to increase – within 50 years we are looking at half a million people living in multi-unit developments in Auckland alone.

“It is important to ensure the legislation governing multi-unit developments provides the right level of protection, is easy to understand and will continue to work into the future.”


A more detailed summary of the proposed changes is below.


Summary of key proposed changes to Unit Titles Act 1972

The body corporate will own the common property, enabling it to act on behalf of all the unit owners for the good of the development as a whole in terms of repair and maintenance.  The body corporate will also be responsible for repairing and maintaining building elements and infrastructure that affect more than one unit.  This will mean, for example, that if an apartment block has a leaky roof it will be the body corporate’s responsibility to fix it, rather than the responsibility of the owner of the top floor apartment.

Large, staged or mixed-use unit title developments will be able to be ‘layered’.  For example, an apartment block, shopping centre and carpark building in a multi-use development could each have its own subsidiary body corporate to separately manage the interests of each group of owners.  Each subsidiary body corporate will be a member of a head body corporate responsible for the overall management of the development.  

Survey and title processes for surveyors and developers will be streamlined and the staged development process will be more flexible.  For example, developers will be able to comply with subdivision consents in stages instead of having to comply with all conditions at the outset of the development.

The requirement for unanimity in body corporate decision-making will be removed.  Decisions will be able to be made based on 75 percent agreement by those who vote at a body corporate meeting.  This, for example, will prevent holdouts and will mean that unit owners who do not vote will not be able to hold up the process. 

Bodies corporate will be required to develop long-term maintenance plans to protect the long-term value of the development.  This will enable owners to plan for and pay a regular amount for maintenance over time, to avoid the need for large, one-off lump sum payments for items such as replacing a lift or exterior painting. 

Disputes will be able to be dealt with through mediation or adjudication in the Tenancy Tribunal in the first instance, rather than solely through the courts, making resolution faster and cheaper. 

Disclosure requirements will be introduced for purchasers, unit owners and the body corporate to enable them to make informed choices.  For example, a purchaser will be entitled to a list of information they can view on request such as body corporate rules, audited accounts and maintenance plans.


Q & A

 

What is a Unit Title?

A unit title is a form of joint property ownership where unit owners own a defined part of a building, such as an apartment, and have shared ownership of areas of common use such as lobbies and lifts.   

 

What is a body corporate?

A body corporate is a collective of all the owners in a unit title development.  The body corporate manages the common property and aspects of the building development as a whole.

 

What is the Unit Titles Act?

The Unit Titles Act 1972 covers the setting up, ownership and management of properties with unit title ownership.  These are commonly apartments, flats, townhouses and office blocks with shops below. 

The Act covers the ownership of unit titles by unit owners; and the formation, rights and responsibilities of the body corporate.     

 

Why was the Act reviewed?

Thirty years ago, when the Act was first introduced, unit title developments were new. Now the variety of ways in which these units are used, and their scale, has broadened considerably.  The Act does not provide well for the rapidly growing diversity of uses and complexity of unit title developments in New Zealand. 

 

How will this benefit people?

 

The changes proposed in the Bill will

·         establish a flexible and responsive regime for the management of unit title developments;

·         ensure that potential unit owners, unit owners and bodies corporate have access to sufficient information to make informed decisions about their unit title development;

·         provide an efficient and effective process for resolving disputes relating to unit title developments for bodies corporate and unit owners;

·         provide for effective and equitable decision making by bodies corporate and unit owners;

·         promote participation by unit owners in body corporate matters;

·         promote functional unit title communities with workable relationships between bodies corporate, unit owners and occupiers;

·         ensure that bodies corporate make appropriate provision over time for the maintenance and repair of buildings and other improvements within their development.


What happens next?

The Bill has been referred to the Social Services Select Committee for consideration.  The Committee will call for public submissions as part of that process.  Timing will be dependent on the Committee’s timetable and competing priorities.

ENDS

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