The Unit Titles Act 2010 provides a regulatory framework for the ownership and management of unit titles.
A unit title is a type of property ownership with a combination of individual and shared ownership of land and buildings. Where each owner owns a defined part of the development, like an apartment, and has a shared ownership of common property such as driveways or lifts.
Body corporates are made up of all owners of a unit title property. A body corporate is responsible for the management and maintenance of shared areas in the property, and the exterior of property.
Updates have been made to the Unit Titles Act to improve compliance, through the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022. These changes will impact all New Zealanders who own or live in a unit title property.
Prior to this update, where there was a breach of the Act’s provisions, there were no penalties under the Act. This update changes that.
Since the 9th of May 2024 the Ministry of Business, Innovation, and Employment (MBIE) is now able to use 6 new enforcement measures. This is to be a proactive function as opposed to only responding to complaints about breaches.
INFORMATION REQUIREMENTS
Body corporate and body corporate managers will need to retain particular documents for at least 3 years and will need to produce these documents if required by MBIE in writing. The documents include;
- Details of all body corporate funds and bank accounts
- Financial statements and audits
- Register of all unit owners
- Notices, agendas, and minutes of body corporate and committee meetings
- Documents relating to utility interest decisions
- Notices from body corporate to owners regarding entering a unit
- Report from the body corporate committee to the body corporate on the exercise of the duties and powers delegated to it
- Written agreement of body corporate managers’ terms of employment/engagement
- Records related to any current warranties from third parties for common property, assets owned by the body corporate, or building elements and infrastructure
A full list of documents required to be kept can be found on the Ministry of Housing and Urban Development website. https://www.hud.govt.nz/our-work/unit-titles-act-2010
POWER OF ENTRY
MBIE will be able to enter and inspect a unit title development with 24 hours’ notice. This can be done with the consent of the body corporate or unit occupant to investigate whether a breach has occurred, or by an order of the Tenancy Tribunal if they have reasonable grounds to believe there has been a breach, and the inspection is reasonably necessary for MBIEs functions and powers.
The power of entry includes the right to take photos and video recordings as well as samples for testing.
IMPROVEMENT NOTICES
This is a new tool MBIE may use to notify a person for a breach or likely breach of the Unit titles Act or regulations.
MBIE will be able to penalise a party who fails to comply with an improvement notice.
A person who has received a notice is able to challenge it in the Tenancy Tribunal within 28 days.
ADMINISTRATOR
MBIE is now able to apply to be an administrator under the Unit titles act to manage the unit title development on behalf of a body corporate.
LEGAL PROCEEDINGS
If a person has persistently breached or committed a serious breach of the Unit Titles Act, then MBIE is able to take over legal proceedings.
To do so MBIE needs to be satisfied that the proceedings are of the public interest and they need to obtain written consent from the relevant party.
PECUNIARY PENALITES
A pecuniary penalty is a monetary fine.
If the Tenancy Tribunal finds that a body corporate or body corporate manger has made a non-compliance breach, that is intentional and without reasonable excuse, then a pecuniary penalty can be ordered.
The Tenancy Tribunal will determine the penalty amount, the maximum amount is between $1,500 and $5,00 depending on the breach.
