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Shake-up for apartment laws

Planned reform of the laws covering the buying and owning of apartments has been necessitated by the growing shift towards apartment living.

Thursday, December 22nd 2016, 9:00AM

by Miriam Bell

Building and Construction Minister Nick Smith has announced the government’s plans to change and strengthen the Unit Titles Act

More people are living and investing in townhouses and apartments and better property laws are needed to support that change, he said.

“The number of households in unit titles is already 145,000, with a value of more than $50 billion. This number is expected to double by 2040.”

Further, the scale of unit title developments is also increasing.

Smith said the average complex size currently is only 10, but many new developments have more than 100 units.

“The responsibilities and finances of body corporates now requires a greater degree of professionalism and regulation.”

To this end, the government is proposing six key changes to the Unit Titles Act. They are: 

• Better disclosure rules at the time of purchase
• Strengthening body corporate governance
• Increasing professionalism of body corporate managers
• Ensuring proper maintenance plans
• Variable compliance requirements relating to complex size
• Improving the accessibility of dispute resolution

The proposed reforms follow a campaign by Auckland Central MP Nikki Kaye prompted by complaints from apartment-dwelling constituents.

It resulted in the “Apartment Blues” report, which articulated a range of problems within the apartment sector and with the existing law.

That report was presented to Smith by a group of property professionals - including the Real Estate Institute, the Body Corporate Chairs Group, and the Home Owners & Buyers Association – earlier this year.

Smith said the law reform is critical to the future shape of New Zealand’s cities as high density development cannot occur without investment.

“These changes are about increasing the security and confidence people can have in their rights as unit title holders.

“We want apartment and townhouse living to be an attractive lifestyle and a sound investment.”

Auckland Property Investors Association president Andrew Bruce told media the reforms are a good idea because people need to be able to trust what body corporates are doing with the money.

But he said governance issues would be difficult to deal with as there are often different agendas at work and it is hard to get body corporate members to agree on things like maintenance.

Consultation on the proposals, which can be read in full here, will run until March 3 next year.
 

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BNZ - Mortgage One 5.55 - - -
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HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
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HSBC Special - - - -
ICBC 5.25 ▲4.29 ▲5.09 ▲5.35
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Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
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Pepper Essential 3.44 - - -
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The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
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TSB Special 4.79 ▼4.34 5.25 5.35
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Median 5.45 4.55 5.25 5.52

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