On June 20, 2011 the Unit Titles Act 2010 came into force.  This repeals and replaces the Unit Titles Act 1972, providing a new legal framework for the joint ownership and management of land, buildings and facilities. The changes to the legislation are significant; reflecting the changing nature of the property market in New Zealand.  Are you ready for them?

Is the new Act Effective?

In The National Business Review / May 27, 2011 23, Rod Thomas, property law expert, commented on his reservations.
We've got the entire article below. You'll find it interesting. The implications he outlines have repercussions that he sees as rippling through entire communities.

“The regulations under the new Unit Titles Act made on May 9 compromise from birth this carefully thought-out legislation.

The future growth of Auckland and other intensely occupied areas of New Zealand is tied to more density living. Thus the enactment of the new 2010 Unit Titles Act was both apt and welcome.

Those advising both the National Government (and the Labour Government before that) emphasised the need to provide model, default bylaws, appropriate for different forms of developments. Thus commercial or industrial developments would need different bylaws and restrictions from residential high-rise.

Equally, ready access to a forum to resolve disputes within developments was seen as key to the success of the new legislation.

In both of these issues, the regulations released last week have gone abysmally wrong.

First, instead of providing a number of default model bylaws, the regulations impose only two.

These will apply to all developments from Metropolis in Auckland, industrial parks in Albany to a modest two unit development in Mt Albert.

They apply in place of existing body corporate rules from August 2013, unless changed. The first rule requires appropriate behaviour around the development. The second requires rubbish be hygienically disposed of. Better, appropriate examples, are readily available.

Both Queensland, New South Wales and other Australian jurisdictions, provide comprehensive default bylaws for the following uses: residential; retirement villages; industrial schemes; hotel/resort schemes; commercial/ retail schemes; and mixed use.

The minimalist approach taken in New Zealand means every unit title development in New Zealand that wants more comprehensive rules will have to write their own (in compliance with the new Unit Titles Act) – and before August 2013.

Not only is this a trap for small operators but it will also prove to be an expensive legal exercise, as new rules have to comply with the new act.

Equally what is lost is the opportunity, over time, to develop judicial interpretations on the meaning of commonly used “tried and true” rules appropriate to use.

Secondly, unit title disputes will incur filing fees of $3300 (inclusive of GST) for issues concerning repair and maintenance to common property, governance of body corporate, or decisions and procedures of the body corporate.

The exception is if the dispute involves a title issue or amounts between $50,000 and $200,000, in which case the dispute must be heard either by the High Court or the District Court.

A lesser filing fee of a mere $850 applies for disputes before the tribunal concerning management issues in the development and noncompliance with body corporate rules.

The scale of these filing fees will amount for some to a denial of access to justice. This is because the new act prohibits a party agreeing to arbitration or mediation in place of the tribunal.

To put this in perspective, the filing fee for the Disputes Tribunal is $102.22; the District Court $189.11; the High Court $1124.44, and even if one eventually took a matter to New Zealand’s highest Court, the Supreme Court, the filing fee there is $920.

Against this, the filing fee for resolving a strata title dispute before the relevant NSW tribunal is $A72.

The setting of these filing fees is presumably based on some misconceived perception of “user pays.” Will this same principle, in fairness, now be applied to other courts? What of providing access to ordinary citizens to resolve neighbourhood disputes? The clear policy of the act is this regard, which is to provide a forum for unit title issues to be inexpensively and quickly dealt with, is ignored.

These measures suggest decision making in a vacuum without regard to social consequences. They compromise the viability of the new Unit Titles Act.”

The soon-to-be-released Brookers Unit Titles Handbook 2011 covers the Unit Titles Act 2010 and its key regulations.

Rod Thomas, leading expert in property law, barrister and Senior Lecturer at AUT Law School has provided a valuable, extensive introduction and critical analysis on important features of the new regime.  He has also included an analysis of Australian case law and practice relevant to the new legislation, as well as addressing issues in bringing body corporate disputes before the Tenancy Tribunal.

To read more about the book or pre-order click the link: Brookers Unit Titles Handbook 2011