Unit Title Act 2010 | Shared by our law firm2018-09-25T17:47:05+12:00

A Published NZ Law Article (JULY 2011) – The Unit Titles Act 2010

Our Law firm – Quay Law

Author – Ian Mellett, Auckland lawyer and principal of Quay Law Barrister and Soliticor in Remuera.

NZ Law – The introduction of the Unit Titles Act 2010.

Unit titles are the most widely used form of multi-unit property ownership. Typical examples of unit title developments include apartment blocks, units, townhouses, office blocks and industrial or retail complexes. The owners in a unit title development own a defined part of the building, for example an apartment or unit, and may also have shared ownership in common areas such as lobbies, lifts and driveways.

It is important to realise that the combination of individual and shared ownership of land and buildings necessarily means that ownership of a unit title entails a different set of rights and responsibilities compared to the traditional concept of house and land ownership. Unit title developments have a body corporate management structure, and all the unit owners collectively make up the body corporate. The body corporate assumes responsibility for a range of matters, including the management, finance and administration of the common property and the building as a whole, and ensures that decisions affecting the development can be made jointly by the unit owners.

There have been numerous changes to the scale and nature of property developments inNew Zealandsince the original Unit Titles Act came into force in 1972. As a consequence the old Act became out-dated and the new legislation now provides the basis for the creation and sustainable management of intensive, multi-unit developments.


The Unit Titles Act 2010 (“the Act”) came into force on 20 June 2011. The majority of the provisions of the Act apply from that date, and the other provisions apply from the end of a 15 month transition period which started on 20 June 2011 and will end on 1 October 2012. The purpose of the transition period is to give bodies corporate the opportunity to prepare for the new default body corporate operational rules and the new maintenance requirements contained in the Act. In effect the Act provides the framework, whereas the Unit Title Regulations 2011 (“the Regulations”) provide the guide as to what people have to do. The Regulations deal with matters pertaining to administration, governance, democracy, finance, disclosure and forms and certificates.

Body corporate rules

Existing body corporate rules made under the old Act will continue to apply until 1 October 2012, although many of the provisions in the existing rules are overridden by the new Act. The old Act contained schedules which set out the default body corporate rules. The default body corporate operational rules are now set out in the Regulations. Provisions in the new Act and Regulations that override the corresponding provisions in existing body corporate rules include provisions relating to the duties of owners and the body corporate, the operation of the committee, and meetings and voting.

The new default operational rules will apply from 1 October 2012. Obviously bodies corporate will be able to revoke, amend or add to the default rules set out in the Regulations. Unit owners should make sure that they have the most up-to-date copy of the rules that apply to their development. It is recommended that the transition period be used to prepare any changes to the new rules that may be considered necessary. Bodies corporate are also able to opt into the new default rules at any time before 1 October 2012. They should be aware that matters that were in the existing rules and are now set out in the new Act or the Regulations cannot be changed.

Maintenance requirements

With regard to maintenance requirements, the default body corporate rules in the old Act provide that the body corporate is responsible for maintaining the common property and utilities serving the Units. The new Act expands the maintenance requirements for bodies corporate, but in respect of existing developments the new requirements only apply from 1 October 2012. It is possible to opt into the new requirements earlier.

Once the transition period has expired, the body corporate’s responsibility for maintenance will entail the common property and all building elements and infrastructure which serve more than one unit. Importantly, it will also be a requirement for bodies corporate to set up a long-term maintenance plan which covers at least 10 years and establish a fund for that plan. The plan must be updated at least once every 3 years.

Financial management

Bodies corporate have a number of financial powers and responsibilities under the new Act. They must keep accounting records, detailing all the financial transactions of the body corporate, and use these records to prepare financial statements (including financial position, income and expenditure, explanatory material and notes). An operating account must be established, and is used to meet the operational expenses that relate to the unit title development. The new Regulations contain some restrictions on unbudgeted spending from the operating account, only allowing unbudgeted spending if it is under 10% of the annual budget.

Buying and selling a unit – disclosure

Buying and selling a unit in a unit title development is more complicated than a traditional house purchase, as there are additional rights and responsibilities to consider, more people involved and ongoing financial commitments of the body corporate. Accordingly the requirement of disclosure is important to enable the buyer to make an informed decision. Under the new Act sellers of unit titles are obliged to provide prospective buyers with a series of disclosure statements to facilitate an informed purchase decision.

The new Act provides for three types of disclosure. Firstly, the pre-contract disclosure statement which the seller provides before entering into an agreement for sale and purchase and contains basic information about the unit title and some specific information about the unit/development. Secondly, the pre-settlement disclosure statement which the seller provides after entering the agreement for sale and purchase but before settlement and contains financial information about the unit, levies etc. Thirdly, an additional disclosure statement which the seller provides on request of the buyer and contains key information about the development, financial statements, long-term maintenance plans, contracts and insurance. The new Regulations prescribe the specific information that must be provided in each disclosure statement.

There are various other aspects which are dealt with under the new Act and Regulations. These include how to call a meeting, what you might want to consider at your first AGM following 20 June 2011, the role of the chairperson, committee members and representatives, and how to deal with disputes.
The new Act and Regulations have been designed to be user friendly and to better facilitate the management of unit title developments. However there are more responsibilities placed upon unit owners and bodies corporate and it is important to ensure that you are aware of these.

Please feel free to contact Ian Mellett (BComm LLB H Dip Tax) at Auckland law firm Quay Law on (09) 523 2408  (09) 523 2408 or ian.mellett@quaylaw.co.nz for more information.

Our website address is www.quaylaw.co.nz and our blog for regular NZ law tips and updates is www.aucklandlawfirm.co.nz.

To talk to a conveyancing solicitor about your property transaction and ourfirm please contact  a lawyer at Quay Law.

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        The BNZ shared home ownership scheme is not dissimilar to homebuying schemes which have been run in the UK and Ireland with success for a number of years.

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        Shared Ownership – Things to Consider

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          Australian Property Restrictions and What They Show.

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            Consult a Professional Immigration Consultant for the Best Chance of Success

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              Business and Investment Visas

              Looking into Business and Investment Visas for New Zealand?

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              Navigate the Immigration Act 2009 with an Auckland Immigration Lawyer

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              Succeed when applying for business and immigration visas

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                Why is it important to update your will

                The importance of updating your will

                If you should die, having a valid will, also known as a “last will and testament”, is the only way to ensure that your assets and possessions are distributed to the people that you want them to go to, and in the way that you want them to be distributed to those people. However, the key word here is having a valid will. That’s because a legal will or parts of a will can be deemed to be invalid. Did you know that? Not many people do. So if you have a will (and making a legal will is something that everyone over the age of 18 should do) then you should definitely review it with your wills and trusts lawyer to ensure it’s still a valid will.

                Legal requirements to update your will

                Before 1 November 2007, when the Wills Act 2007 came into effect, documents that were intended to be a legal will but that failed to meet certain formal requirements, were deemed to be invalid as a will, often resulting in much-added heartaches, such as an intended beneficiary being deprived of an inheritance.

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                • If it can be shown that the maker of the will was in any way subject to undue pressure or influence to dispose of their property in a certain way.

                • If the will-maker was not of sound mind or was under-age when they made the will.

                • If the will-maker made handwritten changes to an existing valid but neglected to sign or initial the changes and have them properly witnessed.

                • If a will was drafted by a lawyer but the will-maker died before they could sign the will.

                The Wills Act of 2007 and its impact

                Prior to 1 November 2007, documents that were intended to be a legal will but which failed to meet the various formal requirements of a valid will were deemed to be invalid.

                However, the Wills Act 2007 has made some important changes by allowing a Court of Law, in certain cases, to validate documents that record the testamentary intentions of the deceased as a valid will.

                The focus of these changes was to ensure that a will-maker who set out to express their genuine last will and testament, should not have those wishes frustrated merely by various legal technicalities. Now the Courts can validate certain documents, otherwise deemed as invalid previously, as valid wills. However, this does involve an application to the High Court under Section 14 of the Wills Act 2007 and still needs certain requirements to be met.

                Rather than have to go through a legal rigmarole involving the Counts, we recommend instead that you review your last will and testament every few years with your wills and trusts lawyer, just to be sure your will is still a valid will. Validating a will with the help of a lawyer should also be done when your circumstances change, for example, you get married or enter into a civil union or de facto relationship, or when relationships break up.

                Helping you validate your will

                It’s important to make sure you constantly stay on top of your estate planning by ensuring that your will and power of attorney are updated regularly.

                For expert advice as to whether your current will is still a valid will, or if you need to update or amend your will, simply call 09 523 2408 to speak with your Auckland lawyer at Quay Law. We’ll also provide you with a quote of the cost for amending your will, as there’s no fixed price for updating a will because each person’s circumstances are unique.

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                  New Zealand 2018 immigration changes

                  The latest immigration news is that Immigration New Zealand has increased the remuneration thresholds for Skilled Migrant visa and Essential Skills visa applications, with effect from 15 January 2018.

                  What’s behind the 2018 immigration changes?

                  We’ve all seen how, year on year, annual surveys show that New Zealand is one of the best countries in the world in which to live. So we’re not surprised it’s also one of the most popular immigration destinations in the world too. However, while New Zealand needs and welcomes skilled migrants from all over the world to fill existing skills gaps in its workforce, it also has to make sure that its own citizens are not disadvantaged when it comes to finding employment in their own country.

                  As a result, New Zealand immigration law, and its rules and regulations, change constantly to be able to get the right balance between ensuring high employment levels for New Zealanders while at the same time making it possible for skilled migrants to work in New Zealand and help promote the country’s continued economic growth.

                  2018 immigration changes to remuneration thresholds in visa categories

                  In a previous article we explained how, in August 2017, Immigration New Zealand was tightening immigration rules and points categories by, among other things, introducing remuneration or salary thresholds in the Skilled Migrant and Essential Skills visa categories, to help better manage migration levels.

                  From 15 January this year, Immigration New Zealand has increased those remuneration thresholds for the Skilled Migrant and Essential Skills visa categories.

                  Why revise the visa salary thresholds?

                  The remuneration thresholds introduced last year for the Skilled Migrant and Essential Skills visa categories are indexed against the New Zealand median income, which is updated annually. As mentioned earlier, New Zealand immigration law is also focused on making sure that New Zealanders seeking employment in their own country are not pushed to the back to the employment queue by lower-paid migrants.

                  In a nutshell, the minimum income threshold for a resident visa application under the Skilled Migrant immigration visa category has increased from NZ$48,860 to NZ$50,523; while the minimum income threshold for the temporary Essential Skill work visa category has increased from NZ$41,537 to NZ$42,952.

                  Here’s an overview of what’s changed in the remuneration thresholds for these visa categories

                  SKILLED MIGRANT IMMIGRATION VISA remuneration threshold for employment in a job at: Before 15 January 2018 From 15 January 2018
                  ANZSCO (Australian and New Zealand Standard Classification of Occupations) skill levels 1 to 3 $23.49 per hour or more (or equivalent annual salary) $24.29 per hour or more (or equivalent annual salary)
                  ANZSCO skill levels 4 and 5, or a level not included in ANZSCO $35.24 per hour or more (or equivalent annual salary) $36.44 per hour or more (or equivalent annual salary)
                  To earn bonus points $46.98 per hour or more (or equivalent annual salary) $48.58 per hour or more (or equivalent annual salary)
                  ESSENTIAL SKILLS WORK VISA remuneration threshold for employment in a job at: Before 15 January 2018 From 15 January 2018
                  ANZSCO (Australian and New Zealand Standard Classification of Occupations) skill levels 1 to 3 $19.97 per hour or more (or equivalent annual salary) $20.65 per hour or more (or equivalent annual salary)
                  ANZSCO skill levels 4 and 5, or a higher level not included in ANZSCO $35.24 per hour or more (or equivalent annual salary) $36.44 per hour or more (or equivalent annual salary)

                  How do these changes to visa salary thresholds affect current visas and visa applications?

                  The 2018 visa remuneration threshold changes will not affect visas that have already been granted, nor will they affect work visa applications or immigration or residence visa applications received by Immigration New Zealand before 15 January 2018.
                  However, any new work visa applications or renewal, or immigration or residence visa applications made on or after 15 January will be subject to the new remuneration thresholds.

                  For more information about the recent immigration changes, simply contact the friendly Auckland immigration lawyers and consultants at Auckland law firm Quay Law.

                  The key to successful New Zealand visa applications

                  New Zealand immigration law is complicated, and, as mentioned above, the rules change constantly in response to the changing needs of the country’s labour market. The key to a successful New Zealand immigration or work visa application is to apply for the right visa category, and then present your visa application properly to Immigration New Zealand.

                  This is where your Auckland immigration lawyer at Auckland law firm Quay Law can be a great help. Our immigration lawyers understand the finer details and rules of New Zealand immigration law and can give you the best possible immigration advice for your unique situation. So contact the immigration consultants at Quay Law today.

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                    Buying a property? A property auction – how does it work?

                    A property auction is a way to sell or buy a property through a process of negotiation open to the public. The intention behind the process of publicly negotiating the price is to ensure the property is bought or sold at its true market value at the time of the auction.

                    Often, the reason for holding an auction is that the seller is not sure of the property’s market value. So, if there’s a chance there will be a fair bit of interest in the property, the seller may decide that holding an auction is a good way to get ‘the market’ to determine the value of the property. At the auction, the buyer is, in effect, ‘the market’.

                    If there are two or more people interested in it and they compete with one another for it, then the seller may even be able to get a better-than-market-value price for it.

                    Sometimes, however, even if the seller knows what their property is worth, they might simply want to get a quick, unconditional sale, and feel that an auction as the best way to make this happen.

                    Before the auction

                    A property for sale by auction is usually marketed, including open homes, for a number of weeks before the auction. The seller’s real estate agent will use this pre-auction period to get feedback from people who view the property about what they think it is worth. This information will be used to help the seller set a realistic reserve price for the property at the auction. The reserve price is the lowest price the seller is willing to accept for the property. Usually, only the seller and their estate agent and the auctioneer will know what the reserve price is.

                    Sometimes, the seller may be willing to take offers before the auction. This will be made clear in the marketing information about the property. If you’re interested in the property, make sure you register your interest with the property’s real estate agent. That way, if they do get any pre-auction offers, they will also give you a chance to make an offer.

                    Pre-auction offers

                    If you do want to make an offer before an auction is held, it will have to be an unconditional offer and be accompanied by a deposit, usually 10% of the full offer price. The deposit must be paid into the trust account of the seller’s lawyer. If the offer is successful, the lawyer will hold it ‘in trust’ until the property is transferred to the buyer, at which point it will become part of the settlement amount. If the offer is not successful, the deposit will be refunded in full.

                    If the seller is interested in your pre-auction offer, their real estate agent will contact all other potential buyers or people who have previously indicated they want to attend the auction to bid on the property, to tell them someone has made an offer on the property. If these people are also interested in making an offer, then the seller has two options:

                    • The seller could arrange for the auction to be brought forward. The highest pre-auction offer received will then become the reserve price for the auction. The person who then makes the highest bid will win the auction.
                    • The seller could decide they are willing to accept the highest pre-auction offer. Their agent will then begin a process of calling all the potential buyers who want to make an offer until they receive the highest unconditional cash offer.

                    An unconditional purchase

                    When you buy at a property auction you are buying unconditionally. If you are the highest bidder, and you’ve met the reserve price, then you have, in effect, made a cash offer. Once your bid is accepted and the auctioneer’s hammer has fallen, the sale is unconditional and is legally binding. You cannot attach conditions to an auction purchase, so you need to get all your ‘ducks in a row’ before the auction.

                    Do your homework beforehand

                    Buying a property at auction is an unconditional purchase which means that, when the auctioneer’s hammer falls, you have bought the property as it is. Therefore, you need to do all your research on the property before the auction.

                    Here are 5 essential things you need to work through together with your local conveyancing lawyer to get sorted before the auction.

                    1. Arrange your finance: To bid at a property auction you need to have sorted your finance. Merely being ‘pre-approved’ for a loan is not sufficient, as this only means you are eligible for a loan. Your bank will still need to approve lending you the money for that specific property, so will probably require a property valuation for the property. As soon as the hammer falls at the property auction, you will have to hand over the required deposit (usually by cheque) and pay the balance of the purchase price on the settlement date, when you take possession of the property. So, you have to have your finance completely sorted before the property auction starts.
                    2. Check the property title: Before the property auction, get your lawyer to check the property title to ensure there are no problems with the title. Ask your lawyer to carefully explain all aspects of the title to you.
                    3. Check the ‘Particulars and Conditions of Auction’: Usually a set of Particulars and Conditions of Auction for the particular property will be made available to you prior to the property auction by the seller’s estate agent. Make sure you go through these carefully with your lawyer before the auction to ensure you understand everything, especially any conditions that might apply to the property.
                    4. Get a builders report: Always get a building inspector to thoroughly check the property and provide you with a written report on it before the property auction. If you’re the successful bidder at the property auction, you cannot decide after the auction that you don’t like something about the property.
                    5. Get an LIM report: Make sure you get an LIM or Land Information Management report before the property auction as this contains the local council’s records on the property.

                    Bidding at the property auction

                    Property auctions can be quite nerve-wracking and fast-moving events. Ask the estate agent who is marketing the property to explain the auction process to you. Even better, if you haven’t been to a property auction before, go to one to see how it works so you know what to expect.

                    If you want to bid on a house at a property auction you will need to register with the auctioneer. However, you do not have to be at the property auction in person if you can’t or don’t want to be there or you feel nervous about the whole process. You can arrange to bid over the phone or get someone else to bid on your behalf.

                    At the property auction, the auctioneer will usually explain the auction process and summarize the ‘Particulars and Conditions of Auction’. Then they will start the bidding by asking for an opening bid. To place your bid, you simply let the auctioneer know by raising your hand or catching their eye and nodding or calling out your bid.

                    When the bidding reaches the reserve price, the auctioneer will announce that the property is “on the market”, which means that, from that point, the property will sell to the highest bidder. Once the highest bidder is found, that person becomes the buyer and must sign the purchase contract and pay the deposit, usually 10%.

                    Vendor bids

                    Sometimes, the auctioneer or someone else working on behalf of the seller may make a bid on behalf of the seller. This is called ‘vendor bidding’ and may be used by the auctioneer to kick-off the bidding or move the bidding closer to the reserve price. The Particulars and Conditions of Auction will state whether vendor bids will be used at the property auction.

                    Vendor bidding is only allowed if the property being auctioned has a reserve price, the reserve price has not been met and the auctioneer clearly states that the bid being made is “a vendor bid”.

                    Stick to your budget

                    By the time you’re at the property auction and in the bidding process, you’ve probably already spent a fair bit of time and money on the property, paying for building and LIM reports, and all the other before-the-auction homework.

                    Don’t let this financial, and associated emotional investment, or your competitive spirit, affect your bidding in the heat of the auction. Decide beforehand what the absolute maximum price is that you are willing or can afford to pay for the property, and stick to it. There is no point in taking on something that you cannot afford.

                    Get sound legal advice

                    Buying a property is one of the biggest, if not the biggest, financial transaction you’ll ever make. Never sign any property contract without first getting professional legal advice about what you are committing yourself to. Buying property is not something to be taken lightly, and this is especially true when you plan to buy at a property auction because there’s no going back once the hammer falls. Get in touch with your local Auckland law firm and work closely with your conveyancing & property lawyer at Quay Law to make sure you have all your ducks in a row before you head into the property auction.

                    Contact Your Conveyancing Lawyer in Auckland

                    We are lawyers in Auckland, who provide practical legal services and conveyancing to a diverse range of New Zealand and overseas client needs. Centrally located in Remuera, Auckland, we look forward to working with you.

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                    Our Legal Services

                    Our Auckland lawyers provide practical legal services for a diverse range of client needs.


                    Our property lawyers understand that property refinancing and property transfer or conveyancing transactions are diverse and can range from the sale or purchase of a residential house or apartment to something more complex. Transactions may focus on any property market be it retail, office, industrial, retirement villages, residential or rural.

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                    If the replacement of debt occurs under financial distress, refinancing might be referred to as debt restructuring or debt consolidation.

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                    Social media includes web-based and mobile technologies used to turn communication into interactive dialogue. Social media is media for social interaction as a super-set beyond social communication. Enabled by ubiquitously accessible and scalable communication techniques, social media has substantially changed the way organizations, communities, and individuals communicate. This has in turn had an impact on the law.

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                    Our lawyers based in Remuera are also able to provide advice on general New Zealand legal matters.

                    If you require expertise beyond our practice, we are able to arrange this necessary expertise for you.

                    Referrals to Barristers are also provided.

                    Our Auckland solicitors also practice in Social Media Law.

                    For more information, please contact a lawyer at Quay Law Barrister and Solicitors.

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