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Property and development changes prompt review of Unit Titles Act 1972

The Department of Building and Housing is in the process of reviewing the Unit Titles Act, due to increased demand for multi-unit urban development in New Zealand since the Act came into force in 1972. 

Progress to date: 

• An external discussion group established. 

• Discussion document issued in November 2004. 

• Written submissions closed on March 31, 2005. 

• Public consultations were held in Auckland, Wellington and Christchurch between November 2004 and March 2005.

• 138 submissions received from a cross section of the public, including local authorities, professional body corporate management companies, unit owners, developers and the Property Council of New Zealand, to name a few. 

The Department has made an executive summary available outlining the submissions received. Some of the key issues raised were: Creation and administration of Unit Titles 

• Lack of clarity in definitions, the need for flexibility and simplification of processes with regard to boundaries and dimensions of units. 

• Clear rules around building alterations and the management of airspace. 

• Serious complex problems had been experienced regarding boundary definitions, mainly regarding liability for maintenance and repair. 

• The process for making changes to common property and boundaries needs to be simplified. Requirement for bodies corporate and rules of bodies corporate. 

• There was a mixed response to the current basis for calculating unit entitlements. 

• The requirement for unanimous decision-making by a body corporate was seen to be dependent on the type of decision being made, and the size, type and complexity of the development.

• The general view is that this needs to be balanced with the protection of fundamental property rights and the protection of minority interests. Duties and functions of bodies corporate. 

• A majority of respondents felt that the functions of the body corporate are not well understood, and a clear, general statement of purpose and function is needed. 

• Greater financial accountability was needed from the body corporate through preparation of financial plans and budgets, and for common funds to be held in trust accounts. Body corporate relationships. 

• There was support for increased information disclosure to potential purchasers and unit owners by developers and bodies corporate. • A need was perceived for clarity surrounding the relationship between the body corporate and the secretary of the body corporate/manager. 

• Serious community living problems were created by tenants in unit title developments due to their not being informed of their rights and obligations by absentee landlords. Also the extent to which bodies corporate have the power to enforce body corporate rules. Dispute resolution 

• There was general agreement that the current dispute resolution process was expensive and slow. 

• A simpler, cheaper and faster alternative framework for resolution was strongly supported. Flat owning companies and cross-lease schemes 

• It was almost unanimously agreed that no further cross-lease schemes should be created. 

• There were reservations expressed regarding mandatory conversion of cross lease schemes to unit titles. 

The date for the enactment of the new Unit Title legislation is expected in mid-2007.

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