Time for apartment law reform

Thursday 4 October 2018

Higher density living is on the rise so National MPs have drafted a bill that aims to improve the law surrounding the management of apartments and townhouses.

By Miriam Bell

Body corporates – which are responsible for the management of mulitple title dwellings like apartments - have long been a source of bemusement and frustration for most.

That means that, alongside the rise in apartment living,there has been a growth in calls for reform of the laws that govern body corporates.

Now National MPs Judith Collins and Nikki Kaye have released the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill – which aims to do just that.

Collins says they see a need to strengthen the existing law in areas like pre-contract disclosure, record keeping of body corporates and better management of conflicts of interests and proxy votes.

“The main reason for the change has been concerns around a lack of transparency and inadequacy in long term maintenance plans, and a clearer understanding of the role of a body corporate manager.

“A refined governance, management and planning structure will lead to more quality housing through improved long term maintenance plans and boost the confidence of first time buyers.”

This is important because New Zealand’s apartment sector alone is already estimated to be worth around $50 billion and places like Auckland are seeing a huge increase in unit titles.

The number of multi-unit housing developments in Auckland increased from just over 15% of new houses in 2010 to over% in 2017.

This growth is set to continue as higher density dwellings are set to play a major role in moves to address housing supply shortages nationwide, but particularly in Auckland.

Kaye is a long-time advocate of apartment law reform. She produced the 2016 “Apartment Blues” report and contributed to a discussion paper for the last government on the issues.

That work forms the basis of the new Bill which aims to:

• Improve the information disclosure regime to prospective buyers of units.
• Strengthen the governance arrangements in relation to the body corporate, the entity responsible for the management and operation of a unit title complex (owner).
• Increase the professionalism and standards of body corporate managers.
• Ensure planning and funding of long-term maintenance projects is adequate and proportionate to the size of the complex concerned.

Kaye says that, as a result of some of these issues, disputes have arisen without accessible and affordable resolutions.

“The Bill seeks to reduce dispute costs and improve the accessibility of mediation. We want to reduce homeowner disputes in multi-unit dwellings and help support easier resolutions.

“For most people their home is the largest asset they have so when things go wrong there can be devastating and life-long impacts.

The two MPs say there is widespread support for law reform in this area and they have asked Housing Minister Phil Twyford to adopt the Bill.

Twyford is understood to be amenable to further discussion but is waiting for the new Ministry of Housing and Urban Development to consider the Bill.

If he chooses not to adopt the Bill, it will be lodged as a Private Members Bill in Collins’ name.

The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill can be read here.

Read more:

Getting to grips with body corporates 

Shake up for apartment laws 

Comments from our readers

No comments yet

Sign In / Register to add your comment

House Prices

Is the market resurgence coming to an end?

Steady declines in value growth are becoming evident – as QV’s latest data reveals – and that suggests the housing market’s resurgence could be coming to an end.


Augusta Capital takeover bid now unconditional

ASX-listed Centuria Capital has declared that its takeover of New Zealand property funds manager Augusta Capital is now unconditional, as it has secured nearly 66% of Augusta’s shares.


ANZ eases servicing test

ANZ has become the latest bank to ease its servicing test criteria for borrowers, reflecting the lower interest rate environment.

Site by PHP Developer