Sweeping apartment law changes to protect buyers
A raft of changes to the country’s $50 billion apartment sector will protect buyers with better disclosure rules, strengthened body corporate governance, proper maintenance plans and improved dispute resolution.
The changes are being brought under the Unit Titles Act after Auckland Central MP Nikki Kaye launched an online forum for apartment owners to air their frustrations with the law.
Building and Construction Minister Dr Nick Smith says a group of property professionals along with Ms Kaye highlighted inadequacies in the law and the changes will be introduced in August next year.
“We need better property laws to support the change in our cities, where more people are living and investing in townhouses and apartments. The number of households in unit titles is already 145,000, with a value of more than $50 billion. This number is expected to double by 2040.
Dr Smith says an important issue is the scale of unit title developments is increasing. The average complex size is only 10 units, but many new developments have more than 100 units. “The responsibilities and finances of body corporates now require a greater degree of professionalism and regulation,” he says.
The reforms include:
- Better disclosure rules at the time of purchase
- Strengthening body corporate governance
- Increasing professionalism of body corporate managers
- Ensuring proper maintenance plans
- Variable compliance requirements relating to complex size
- Improving the accessibility of dispute resolution.
Dr Smith says law reform is critical to the future shape of our cities. “Getting the planning law right to allow higher density living is an important first step but the development cannot occur without investment.
“These changes are about increasing the security and confidence people can have in their rights as unit title holders. We want apartment and townhouse living to be an attractive lifestyle and a sound investment,” he says.
Consultation on the proposals runs until Friday, March 3. Stakeholder workshops have been organised in Auckland, Wellington and Christchurch in February. Submissions received during consultation and feedback from the workshops will help set the final scope of changes to the Unit Titles Act.