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.