Steven Garland, Body Corporate General Manager discusses the key changes in the Unit Titles Amendment Bill that Body Corporate Owners and clients need to be aware of.
Thank you to the Chairs and Committee Members who attended the Body Corporate function recently at our offices in Epsom. For those unable to attend I have reproduced the background to some of the proposed changes to the Unit Titles Act that were outlined by our two legal experts – Clinton Baker from Price Baker Berridge and Liza Fry-Irvine from Liza Fry-Irvine Law. It’s always good to get some vision on any likely changes and we will continue to keep you updated as things develop, however it is not anticipated that the new legislation will be enacted until 2023 at the earliest.
Introduction/Background – The journey to the Unit Titles Amendment Bill
- 2015 – Past Minister Nikki Kaye lobbied for law reform under the National lead government and the UTA Working Group was formed.
- 2016 – Ministry of Building and Housing issued discussion document and took submissions.
- 2017 – Change in government to Labour lead – no further action taken.
- While in opposition Nikki Kaye continued to lobby and the current Bill was drafted and entered in the Members Bill ballot – it was pulled from the ballot in mid-2020.
- March 2021 – The Bill passed its first reading in parliament.
- April 2021 – Submissions called for from the Select Committee.
- Next steps – Select Committee reviews submissions – makes recommendations to Parliament. The Bill is then likely to be amended and presented to Parliament for 2nd and 3rd reading – if it passes it becomes law with a deferred commencement date.
There are eight key changes in the Unit Titles Amendment Bill that Body Corporate owners and clients need to be aware of:
1. Regulation of Body Corporate Managers:
- Functions and duties of Body Corporate Manager will be set out in the bill.
- Body Corporate Management agreement must contain certain terms.
- Conflict of interests must be disclosed (e.g. if you own a unit in a complex you manage).
- Body Corporate Managers must be member of an industry body and comply with any Code of Conduct.
- Body Corporate Managers must not intermingle funds and records between different Bodies Corporate.
2. Remote access for BC meetings:
Remote access for Body Corporate Meetings is only temporary at present while the Epidemic Preparedness Notice remains in force. The Unit Title Amendment Bill proposes that:
- Remote access is made a permanent addition to the UTA (this has wide support).
- Regulation is needed around operating a remote meeting/ verifying the person attending etc.
- Submissions made for “electronic voting” – pre-meeting and during meeting.
3. Long Term Maintenance Plans:
The Bill proposes that Long Term Maintenance Plans must include “building defects” however this needs clarifying and there is strong support for this to be changed to “known and unremediated defects”
4. Utility interests:
The Bill proposes to allow utility interests to be reassessed as either a “single uniform interest” or “multiple set of interests, each targeted to a particular service or amenity”
- This proposed change may create more challenges for Body Corporate Managers such as increasing meetings and increasing administration tasks which would possibly increase costs.
5. Mandatory requirements for medium and large residential complexes:
- Medium complexes are defined as 10 – 29 principal units.
- Large complexes are defined as 30+ principal
The Bill proposes that for medium and large complexes:
- Long Term Maintenance Plans must be peer reviewed. However there are some arguments that if a Body Corporate has a Long Term Maintenance Plan done by a qualified professional then there should be no need for a peer review.
- Long Term Maintenance Fund must be audited.
- Complexes must have a Body Corporate Manager (although medium complexes can opt out of this).
6. Limits on holding proxies:
The Bill proposes for complexes with 20 or more units that one person can only be proxy for up to 5% of the units, and that for complexes under 20 units that one person can only be proxy for one unit.
- There is strong argument against limits on holding proxies as many owners believe it unfairly limits their rights to delegate decision making.
7. Disclosure regime:
- Pre Contract Disclosure Statements (PCDS) will contain more information which will assist buyers.
- The Bill proposes that the Body Corporate or Body Corporate Manager must certify the PCDS as correct – submitters to the Bill have asked that any certification is limited to only levies and related matters.
- The Bill completely removes PCDS – submitters have asked that this be re-inserted to provide parties with important information before settlement.
- Submitters have also asked that Body Corporates have the power to withhold PCDS for unpaid levies is re- inserted to protect Bodies Corporate.
8. Committees and Body Corporate decision making
- The Bill introduces a Committee Code of Conduct and conflicts of interests register – A Committee member cannot vote at Committee level if conflicted.
- A Body Corporate Chairperson will automatically be appointed to the Committee and be the Committee Chairperson.
- The Bill seeks to correct some current issues with the UTA re decision making.
Other matters outside the Bill
Many submitters to the Select Committee have asked that the Select Committee look at reform in other areas as a separate matter for the future, but to prioritise the Bill over any such future reform.
Chat to your Body Corporate Manager or contact us if you have questions about the changes in the Unit Titles Amendment Bill. To view more information about the Bill click here.
SCA (NZ), Price Baker Berridge and Liza Fry-Irvine Law all made submissions to the Select Committee for the Unit Title Amendments Act. Thanks to Liza and Clinton for the above information that was discussed at our recent event for Body Corporate Chair and Committee Members.
General Manager – Body Corporate
Auckland Property Management
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