Review of the Unit Titles Act 1972
List of Questions
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Creation and Administration of Unit Titles
Physical dimensions of units
Questions (page 8)
1. Have you ever been involved in problems relating to boundary definitions under the Unit Titles Act?
2. Do you agree with the Law Commission’s recommendation that the definition of the term "unit" should expressly allow for units to be made up of partly, or wholly, open space? What are your reasons?
3. If this change was made, would other issues need to be addressed, for example standard rules for minor alterations such as the addition of porches or conservatories?
4. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Boundaries
Questions (page 9)
5. Have you ever experienced difficulties or problems relating to where the boundaries of units have been? If so, how serious a problem has it been?
6. Should the Unit Titles Act control more strictly where the boundaries should be on a unit plan and what parts of a unit development are required to be common property? If so, describe how these could be provided for, for example by way of standardised formats for plans or minimum requirements.
7. How should exclusive use areas that effect the whole property be dealt with? For example, is there a case, particularly for large developments, for the individual unit title to include only the interior surface of the unit, and for all other structural elements to be common property?
8. Are there other ways of addressing this issue, for example giving the body corporate a right to undertake work on units, as opposed to the common property, or requiring unit owners to repair defects within their own unit title if failure to do so could cause damage to the building? Please describe your proposal and how you think it would solve the problem.
9. Have you ever experienced difficulties or problems relating to the ownership of utilities such as water pipes and electricity lines? If so, how serious a problem has it been? How could the problem be addressed?
10. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Staged developments
Questions (page 10)
11. Do you agree that, if units can be comprised wholly of open space, the staged development provisions of the Unit Titles Act are no longer required?
12. Were that reform to be adopted, do you think unit owners require any special protections from the future development of "open spaces"? If you agree with the Law Commission that contractual provisions and the Resource Management Act can protect unit owners from subsequent development, do you nevertheless think it would be a good idea to provide for statutory protection as a consumer protection measure?
13. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Access ways, easements and covenants
Questions (page 11)
14. Have you ever experienced problems relating to access lots, easements or covenants under the Unit Titles Act?
15. In your view, should the Law Commission’s recommendations be adopted? If not, are there any other ways these problems could be addressed?
Minor changes to common property and to boundaries of units
Questions (page 11)
16. In your view, is there any reason not to adopt these recommendations? Is there a better way of dealing with this issue?
17. If such an amendment is made, should the circumstances where the discretion may be applied be spelled out or should that be left to the district land registrar on a case-by-case basis?
Leasehold land
Questions (page 12)
18. Have you experienced any issues relation to unit titles on leasehold land? Are the provisions in the Unit Titles Act adequate? If not, how could they be improved? Are there issues that arise in relation to bodies corporate on leasehold land?
Requirement for Bodies Corporate, and Rules of Bodies Corporate
Bodies corporate and small developments
Questions (page 13)
19. Do you agree with the Law Commission’s proposal? Please give your reasons.
20. In what other situations should there no longer be a compulsory requirement for a body corporate?
21. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Bodies corporate – recognise different types
Questions (page 15)
22. Do you agree that the Unit Titles Act should be amended to provide for different models of bodies corporate depending on the size and/or type of development?
23. If you do agree, what do you think would be a sensible range of models? How should that range best be provided, for example by regulation or by "model" rules?
24. In what ways does the model of bodies corporate need to be tailored depending on the type of development?
25. Are special issues raised by the complexities of high-rise buildings themselves, as opposed to the "type" of development that may occupy such a building? If so, what issues do you see?
Body corporate democracy
Questions (page 16)
26. Do you agree that the requirement for unanimity should be relaxed? If so, for what decisions, and what majority, should replace the requirement for unanimity?
27. Should reform go as far as "normalising" the required majorities, so that the majority would only have to come from those voting, rather than those entitled to vote?
28. Would you agree to relaxing the unanimity requirement for all schemes, or do you think that the relaxation should be limited to, say large residential, commercial and "mixed" schemes? For those purposes, how would you define a "large residential scheme"?
29. Do you think individual owners who vote against a proposal requiring a "super majority" should, in certain circumstances, be given a buy-out option, like that provided by the Companies Act?
30. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Relief from the requirement for unanimity
Questions (page 17)
31. If the need to obtain unanimous votes is retained, do you agree with the Law Commission that criteria should be provided to protect the minority? If yes, what criteria do you suggest? What do you think would be the impact of your suggestions on unit owners, bodies corporate and on business owners?
Unit entitlements
Questions (page 18)
32. Do you think relative value is the right concept to be used to fix unit entitlements, given the range of matters determined by unit entitlements? If yes, why do you support it?
33. Should there be a more flexible approach to these issues? For example, could scheme rules be used to set entitlements in a way that better matches the benefits and costs of different aspects of unit developments? Would a better approach be to provide for some concept of a "fair and reasonable charge" set by the body corporate for the allocation of common costs, with individual owners having rights to object? Should there be provision for owners to enter into voluntary agreements to pay for certain expenses on the basis of who benefits, rather than unit entitlement?
34. Whatever approach is adopted, should there be an obligation for bodies corporate to review the apportionment of rights and obligations over time?
35. How should owners be protected from unreasonable changes, if the approach to these issues is made more flexible? The Unit Titles Act does currently provide some flexibility. In limited circumstances (work benefiting one or more units only, or work benefiting one or more units substantially more than other units) "other" unit holders may be excused from an obligation to contribute.19 It is not clear, however, how useful those provisions are in addressing this issue. Should the body corporate itself be given more discretion, subject to appropriate rights of objection?
Duties and Functions of Bodies Corporate
Clarify role of bodies corporate
Questions (page 19)
36. Do you agree that the concept "body corporate" and the overall functions of a body corporate are not well understood? Please give reasons for your response.
37. Would some other name be better? Do you like the approach "The ABC Community Corporation", or do you have other suggestions?
38. Is there a place in the Unit Titles Act for a general statement of the function of bodies corporate? If so, what matters might be included in that statement?
Financial planning and reporting
Questions (page 20)
39. Do you think there should be a specific requirement for bodies corporate to prepare financial plans and budgets? If so, what matters should be covered by such financial plans and budgets?
40. Should there be a requirement for common funds to be held in trust accounts? Please provide reasons.
41. Are the financial reporting provisions of the Unit Titles Act adequate? If not, how can they be improved?
42. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Sinking funds
Questions (page 21)
43. Do you think the Unit Titles Act adequately empowers a body corporate to establish a sinking fund?
44. Do you think that the Unit Titles Act could be improved by providing a regime for instituting and maintaining sinking funds for capital works, whether or not it is compulsory to do so? If so, what features should be included in such a regime?
45. Do you think that the Unit Titles Act should require sinking funds to be established by all or some (for example large, complex unit developments) bodies corporate?
46. Do you think the Unit Titles Act should go further and prescribe maintenance obligations, along with the requirement to establish a sinking fund for long-term planned maintenance?
47. Should claims against third parties for the repair or maintenance of common property be made only by the body corporate, or should individual owners also be entitled to make an individual claim against third parties for damage to, or diminution in the value of, their interest in the common property?
Insurance
Questions (page 22)
48. How should the current requirement for compulsory insurance be changed? Are there other issues relating to insurance that you think a review of the Unit Titles Act should take into account such as insurance during staged developments, or who is responsible for an insurance excess?
Body Corporate Relationships
Developers and initial purchasers of units
Questions (page 23)
49. Do you think developers should be required to provide more information to purchasers of units? Please give reasons to support your comments.
50. If you think developers should be required to provide more information, what topics should be covered, for example general information about unit titles and living in a unit title development, or specific information, such as estimates of future maintenance costs?
51. Should the information be different depending on the size and type of the development?
Developers and bodies corporate
Questions (page 24)
52. Do you think there are good reasons to require a developer to provide certain information to the body corporate? Please describe your reasons.
53. If so, is the list of information set out above a sensible one? Do you think any other types of documentation or information should be provided?
Contracts made by the developer
Questions (page 24)
54. What, if any, problems have you experienced or know of in relation to long-term contracts entered into by the developer? How serious have these problems been?
55. Should such contracts be controlled, and if so, how?
56. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Disclosure to subsequent purchasers
Questions (page 25)
57. Do you think information disclosure to purchasers should be a requirement under the Unit Titles Act? Should the range of information provided to purchasers of unit titles be broadened?
58. If so, do you think the Queensland Community Management Statement provides a good model for New Zealand to follow? Please give reasons.
59. Do you have other suggestions to improve the information available to purchasers of unit titles?
60. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Relationships with body corporate managers and secretaries
Questions (page 26)
61. Should the Unit Titles Act provide a clearer statement of the relative roles of the body corporate, the body corporate committee and contracted property managers?
62. Should the relationship between bodies corporate and body corporate managers be regulated, and if so, how?
63. Should occupational regulation of body corporate managers be introduced?
64. Should the process whereby a body corporate contracts with a body corporate manager be regulated?
65. Should the content of contracts between bodies corporate and body corporate managers be regulated, and if so, how?
Body corporate governance
Questions (page 27)
66. Have you experienced, or do you know of, any significant problems with body corporate governance structures in New Zealand? Please describe them and their magnitude.
67. Are the issues focused on by other jurisdictions (committees, body corporate managers, proxy voting) relevant in New Zealand?
68. Are there other issues relating to body corporate governance that should be reviewed?
69. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Legal protection of body corporate committee members
Questions (page 28)
70. Should body corporate committee members be provided legal protection when carrying out the duties of the body corporate? Should there be provision to allow the payment of body corporate committee members?
Unit owners, bodies corporate and tenants
Questions (page 29)
71. Do you think that the difficulties sometimes associated with involving tenants in unit title developments are serious? What do you think might be done to address these issues?
72. Would you agree, for example, that a unit owner leasing their unit should be obliged to provide tenants with a copy of the body corporate rules? Should body corporate rules – as a matter of law – be incorporated into the lease and bind tenants directly?
73. If body corporate rules are to become binding on tenants by being incorporated in the lease, should body corporate rules be required to recognise the interests a tenant has in the operation of the body corporate and provide a mechanism for the body corporate to consult with, and take account of the interests of, tenants?
74. Are there other ways relationships between tenants, unit owners and bodies corporate could be improved?
75. Do you think these issues should be addressed through the Unit Titles Act, or the Residential Tenancies Act?
Dispute Resolution
Questions (page 30)
76. Do you agree that a new framework is required for resolving disputes involving bodies corporate, unit owners and other parties?
77. If so, what do you think the main elements of such a framework should be?
78. Do you agree with the "self help" remedies proposed for bodies corporate by the Law Commission for recovery of levies? Would you extend these to include a power of sale?
79. What do you think would be the impact of your answers on unit owners, bodies corporate and on business owners?
Flat-owning Companies and Cross-lease Schemes
Questions (page 32)
80. Do you agree with the Law Commission that no further flat owning company schemes should be created? If not, why not?
81. Do you agree with the Law Commission that cross-lease schemes are irredeemably flawed and that no further such schemes should be created? If not, why not?
82. If you do agree with the Law Commission on cross-lease schemes, do you agree with the Law Commission’s proposals:
• to facilitate their conversion to unit titles
• to make such conversion mandatory?
If not, why not? What other solutions do you suggest?
Form of Legislation
Questions (page 32)
83. Do you think having two separate acts is a sensible approach to adopt in New Zealand? What are your reasons?
Other Issues
This discussion document has raised a wide range of issues relating to the Unit Titles Act and bodies corporate. However, there may be other issues that concern you. We welcome your comments on any such other issues.