Unit Titles Act Changes Are Afoot

30 Jun 2021

The Unit Titles Amendment Bill passed its first reading with unanimous support and has progressed to the select committee stage, which illustrates the problems with the current legislation are well recognised.

This Bill is a response to a recent examination of the Unit Titles Act 2010 and proposes to:

  • Improve the information disclosure regime to prospective buyers of units
  • Strengthen the governance arrangements in relation to a body corporate
  • Increase the professionalism and standards of body corporate managers
  • Ensure that planning and funding of long-term maintenance projects is adequate
  • It will also make life a lot easier for people currently living in multi-unit dwellings and will open the door for many more to choose this type of housing in the future.

How the proposed reforms are implemented is key, due to more high-density dwelling approvals being issued, increases in immigration (post-Covid), projected growth forecasts in the long term, and a housing market with some of the most expensive real estate (on an income to value basis). This means there is a real need for the reforms to ensure apartment living is a more attractive and viable option for buyers and investors, particularly in major centres such as Wellington and Auckland where, over the past 15 years, apartment buildings have been popping up almost everywhere.

For investor buyers looking to add an apartment to their portfolio, the Bill appears to deliver on its objectives of strengthening governance and, importantly, in areas of transparency at the pre-contract disclosure level. These positive changes will reduce risk to prospective investors so an informed decision can be made quicker on whether the investment is in fact suitable and viable long term, without having to expend significant time and expense on probing for further information.

Our Body Corporate Division Manager says there is a consensus in the industry that most of the changes set out in the Bill are required, along with additional suggested changes from interested parties within the industry. These proposed changes can form part of a second phase with further consultation on other issues. However, it should not delay the Bill’s enactment, which should incorporate the feedback already provided.

Although the Amendment Bill may change as it makes its way through the legislative process, it is important to be aware of what it means for body corporate legislation.

At this point in time, the Bill looks likely to pass into law in the last quarter of 2021.

If you have any questions about the Unit Titles Act and its proposed amendments, feel free to contact us at [email protected].