The Unit Titles Act 2010

The Unit Titles Act 2010 (the ‘2010 Act’) came into force on 20 June 2011 and replaced the Unit Titles Act 1972.

The Unit Titles Act 2010 contains material changes from its predecessor and is now the principal authority pertaining to the establishment and management of developments such as apartment blocks, multilayered commercial spaces and flats.

The 18,500 Bodies Corporate within New Zealand have a 15 month transitional period in which they can elect to continue to be governed by the old Act, however, most Body Corporate authorities have taken the approach of “why wait?”.

The key changes included in the 2010 Act are as follows;

• The Body Corporate is now the owner of all common property within an establishment. Prior to 20 June 2011, ownership of common property was jointly vested in all unit owners. The ownership change allows the Body Corporate to more effectively promote the benefit of the development as a whole by representing all unit owners in relation to the improvement and maintenance of common property.
• The Body Corporate is now responsible for the maintenance of building elements and infrastructure affecting more than one unit. For example, the Body Corporate will be responsible for repairing a leak from a top floor apartment to a unit below (this being on the basis that the leak is not attributable to the recklessness or negligence of the unit owner and/or occupier.) Previously, the obligation to remedy the leak would have fallen solely on the owner of the top floor apartment.

It is now more feasible for owners of individual units to carry out minor alterations, as the 2010

Act allows for increased flexibility relating to re-developments. Provided the modifications do not materially affect the common property or the property of another owner, obtaining the consent of a Body Corporate is no longer required to carry out additions or structural alterations to units.

Long term maintenance plans are now required to be developed by Bodies Corporate in advance, giving owners the opportunity to pay regular instalments over time. This is to avoid owners having to pay large one off special levies for work required on common property, such as lifts.

Under the 2010 Act the subdivision of principal units is also possible, allowing for the creation of a separate unit title development within the principal title known as a subsidiary. This is known as a layered development and allows for the multiple use of a building – such as where a building has car parking, shopping complexes, commercial offices and apartments all within its confines.

The 2010 Act also allows for the creation of separate Bodies Corporate that govern subsidiary units, which are also part of the Head Body Corporate responsible for overall management of the development.

Unanimous consent of the Body Corporate is no longer required under the 2010 Act and a 75% majority is sufficient for decisions to be made. This change has been welcomed by many as it means decisions will less likely be held up by difficult owners. Another welcome change is the ability to vote by way of postal vote.

The 2010 Act seems to attempt to be more flexible and pragmatic. To some extent the 2010 Act may give unit title owners more certainty and therefore promote unit titles as a form of land ownership.

NB - Two key important dates for Bodies Corporate and their members are:

The first Annual General Meeting under the new Act must be held within six months of the commencement of the Act – by 20th December 2011.

The Bodies Corporate who elect to continue to be governed by the old Act will cease to have this option as at 20th October 2012.

If you would like further information regarding the Unit Titles Act 2010 please do not hesitate to contact Mike Newdick or Jane Min who will be happy to answer any queries.