Spotlight to be put on bodies corporate as Labour finally commits to supporting a National member's bill to reform the Unit Titles Act

Spotlight to be put on bodies corporate as Labour finally commits to supporting a National member's bill to reform the Unit Titles Act
Image sourced from Flickr

The Labour Party has agreed to support a National Party member’s bill that aims to strengthen the way apartments, townhouses and other types of high-density property arrangements are managed.

Associate Housing Minister Poto Williams today (Tuesday) wrote to National’s housing spokesperson Nicola Willis confirming Labour will support the first reading of the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill.

However Labour will try to tweak the Bill during the select committee process.

Willis explained the Bill seeks to:

- Improve the way information (around weathertightness and earthquake strengthening for example) is disclosed to prospective buyers of units. This includes making financial records, past copies of general body corporate minutes and insurance cover available;

- Strengthen the governance arrangements of body corporates;

- Improve the professionalism and standards of body corporate managers. This includes setting out a code of conduct for managers and requiring managers to be members of an industry organisation;

- Ensure the planning and funding of long-term maintenance projects is adequate and proportionate to the size of the complex. This includes extending the period a body corporate's long-term maintenance plan must cover from 10 years to 30 years for residential developments that have 10 or more dwellings. Where a residential development has 30 or more dwellings, the Bill requires the maintenance plan be peer reviewed by a qualified expert.

Labour’s support for the Bill is a long-time coming and follows it pledging to reform the Unit Titles Act 2010 ahead of the 2020 election.

The Bill was drafted following National MP Nikki Kaye and Judith Collins consulting on body corporate issues via their ‘Better Body Corporates’ campaign when in government in 2016.

This work fed into a Ministry of Business, Innovation and Employment discussion document, which saw Kaye and Collins draft the Bill.  

They gave it to former Housing Minister Phil Twyford in October 2018. But Twyford rejected their request to progress the Bill, saying it required substantial amendments and wasn’t a priority for the Government.  

National then lodged the Bill as a private member’s bill in the name of Willis.

Williams in her letter to Willis on Tuesday recognised the work Kaye did on the issue, saying: “We acknowledge the [Unit Titles] Act was developed at a time where apartment living was still relatively uncommon and that reform is needed to ensure the Act is still fit for purpose.”

However Williams was concerned National's proposed change “doesn’t include stronger powers for the regulator to investigate and enforce the Unit Titles Act”.

She also worried the Bill “proposes disproportionate and onerous industry-wide requirements for body cooperates about long-term maintenance plans and funds”.

Williams hoped these issues could be worked through during the select committee process.

The Bill is likely to have its first reading in Parliament this week.

The Bill's explanatory note says: "The proposals in the Bill aim to strike a balance between the benefits of additional compliance requirements and any costs that these may impose.

"Prospective homeowners need to consider apartments and other high-density living arrangements as a viable and attractive living alternative to other more traditional forms of property ownership.

"Likewise, sector professionals need to have clear rules as to their obligations, which nevertheless allow for flexibility and creativity in their building, operating, and maintenance procedures."

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59 Comments

13
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Ignore the substance of the Bill, the important bit is:
"Labour finally commits to supporting a National member's bill"
Until the political partisanship of all things property is removed, little is possible.
Is this the start of recognising that fact, and will we see National support Labour measures in the near future?
We can only hope.

They bought the roads back they cancelled when it became obvious they had no plan. Now they resurrect this after three wasted years. Wonder what is next from the "Oops, probably should have come up with our own stuff but didn't before we ruled out everything National was working on purely out of partisan spite" bin? Hopefully for lower income earners, it's something from the social investment plans from Sir English, given the almost total lack of meaningful progress in child poverty stats even pre-Covid19 - supposedly the whole reason the PM got into politics in the first place.

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Yes, building new roads was criticised for years and years as being a promotion of dinosaur fossil fuel technology (so what will the electric cars drive on?? This was never challenged), and now all we hear about is 'shovel ready' roads that Labour will be cracking on with. Let's be honest, the first term of this government really was the 'years of neglect' that they like to talk about. A 3 year hiatus that set us back on our heels while $300 Million was wasted on the dithering of 'working groups'.

And in a “blurred” state each party awoke in the morning and “exclaimed who are you?” As Pat Benatar sang “ Promises Made in the Dark.” A cup of black coffee each and back into it, perhaps. Probably not.

Do Labour actually have any good ideas? Or are they merely experts at criticising others?

Oh how they have dined out on criticising National for all of their woes. While at the same time ignoring the fact they are treading water.

They reality is that both parties are lost in the wilderness. One is politically expert but seriously incompetent at governing. The other politically useless but more than capable of making good decisions and getting stuff done.

Roll on the next election, where every option will be a bad one.

About time

Twyford. No surprise.

Glad it’s finally getting some cross party support.

I'm not surprised that it was Twyford. He ditched the Bill without understanding that it was more important than his failed role at the time. There have been incredible problems with the unit titles act for a very long time. So of course that wasn't a priority for Twyford or Labour.

You would think political parties could agree of something necessary like this given that there is considerable common ground.

Twyford is a very partisan individual. He also rubbished special housing areas. Not a perfect policy by any stretch, but one that did help realise more supply.

The special housing areas that resulted in houses built within them being 5% more expensive than those built outside the areas?

https://www.stuff.co.nz/national/politics/111223329/government-will-not-...

All that happened is the price of the land went up, because it had this special designation that reduced the cost of the houses to be built on it, making the land itself more valuable.

It was patchy.
But in Queenstown there were some good results, for example, with community housing requirements. It showed with some creativity councils and communities could get good outcomes.

No, it released relatively less supply. IE it took the wider RUB and highlighted smaller areas to promote which just allowed land bankers to game the system even more.

All you need to ask yourself, is after this release did prices go up or down?

True release of more supply results in prices going down. If it does not achieve this, then it is just word mind games for the masses.

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For those Labour voters, now they know they should have rather voted National if those were the policies they were expecting.

They were brainwashed with the '9 years of neglect' slogan, the constant daily media articles 'pimping the poor' with the photo's and personal stories of poor unfortunates who were sleeping in doorways etc, the constant hammering on by the on-line army about how National had blown out the national debt, the constant yammering on about 'the housing crisis' that was all Nationals fault (forget about how house prices had gone up exponentially under HC).

Thanks for the reminder, I had forgotten how bad those National years were.

I doubt you had. There are plenty more 'pimping the poor' cases to be uncovered these days, but - funnily enough - no media interest in covering them.

Thanks Jenee, love-your-work but some 'real world' examples/implications would have been helpful. Maybe after it's been through select-committee.

Your 4 bullet points are great, just a little lite on info. Awesome to get an update, thank you. :)

So imagine you have bought an apartment(s) for the purpose of flipping it(them). You get a role on the Body Corporate and drive the fees down so that future maintenance is not correctly allowed for. Keeping those expenses low until you flip the apartments maximises profit. Years down the track the Body Corporate discovers it is short by millions for expected maintenance and the current owners have to fork out for it with emergency fees or funding.

Another one would be managing the Body Corporate and charging for maintenance work you carry out yourself (well you charge large fees for it and don't do any of the invoiced work). It's difficult to hold the manager to account without starting a formal process.

There are probably many examples but these are versions of what I have seen in practice.

@dictator

WOW~!! I never considered those scams might be happening. I suppose that sort of thing does go on. If I buy here in Christchurch I'd ideally go with a fee-simple title. It might be time for NZ to start treating 'civil matters' as actual crimes - though our justice system gives me pause.

Before reading your comment I was more hoping this legislation would stop Body Corporates forcing title holders to pay for unnecessarily gilded fences and polish finished carparks.

Keep the Examples Comings Please - I find this stuff super interesting.

I once worked with a guy who was boosted of having bought a leaky apartment for cheap as chips, got onto the body corp to help manage recladding etc... (he was an architect), stalled the process hard collecting fees and very high rental yield from the apartment, bought some of the other apartments for nothing from exacerbated owners then finally got the work done and sold them all for a tidy tax free profit

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Bullet points updated with examples provided by Nicola Willis. Note the Bill will be changed through the select committee process. How's that for journalist/reader engagement Zack Brando :)

Excellent. Far better than the journalists on Stuff who never respond to feedback at all.

Jenee. One of the most informative.

You are amazing, thank you!

I wonder how this will play out for those little body corps that really should be crosslease or freehold. I've even seen freestanding houses on body corps, for reasons that escape me. I can only guess that there was a time when it was slightly cheaper/easier to do...

Didn't Labour jump up and down for years and years about a 'housing crisis'(?), and all the while they fought any reform of the RMA, and then in 2017 they told everyone that they had a comprehensive plan to fix the housing crisis, which was based on building 100,000 affordable homes, which they aborted once in office, and now finding - in their second term in office mind you - the original housing crisis is now a monster on steroids (it was hiding under the carpet for 3 years) - they decided they needed to reform the RMA (which should be completed in 2 or 3 years) and are now supporting a National members bill.

I find this all very odd. I have been told that JA is a very astute crisis manager. I have been told that Labour know that they are doing. I'm not sure I believe it.

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You're missing some steps Tom; first they insisted their Kiwibuild policies were doable, even though the costings were more than an election cycle old (while also promising to do away with urban boundaries and look into building prices - all the while insisting the costings were still current).

Then, after winning, the prices went up by $50k per type of house (2/3/4 bedders all got $50K more expensive) because... the costings were out of date. This made them the same price as the Axis ballot homes, which supposedly didn't count because National were supposedly 'doing nothing' - at least this was the unchallenged narrative around affordable housing at the time.
So even if they had delivered 100,000 of them, it would have just been what National did, scaled up. Then they decided they would buy houses until they could build them en masse, then they announced the same development at Unitec twice and then they walked away from the ideas of 'targets' because it wasn't useful (i.e. there was too much accountability when you put a specific number on it).

Kiwibuild was the biggest bait and switch of our time, and frankly if the 2017 campaign and all the subsequent backflips on almost every key policy (Tax, Housing, Light Rail) isn't considered a 'stolen' election then I don't know what one is. I feel bad for the people who would have legitimately been better off under Bill English.

Even with the media full-court-press to get Labour elected, they still needed that **** Winston to get them over the line.

Very well put and very accurate. I was close to some of the 'action'. Kiwibuild was a total debacle and basically they conned a whole lot of people into voting for them.

And then they got 50.01% in the next election. Must've done something right.

COVID managers 'par excellence' + 'JA hugs and kindness'?
The media transmits the propaganda messaging, and the sheep baa their thanks!

Good covid management and a hopeless opposition. Plus rising house prices. A formula par excellence

You are completely missing the point. Both National and Labour have been playing the exact same game (juice the economy via debt based housing ponzi). Neither is willing to own up to the fact that its neither sustainable or beneficial to the majority of New Zealanders. They would rather eek out another term in office keeping the economy "humming", while making the inevitable reckoning worse, than actually do anything to fix the issue.

Both parties said they would fix the housing issue before getting in power, both proceeded to do nothing of substance once they had the chance, as they were worried a downterm in the economy would get them voted out of office.

With neither party willing to fix the issue, the solution will at some point in the future be forced upon them, and the results will be 10 times more disastrous for the country as a whole. These are the kind of gutless morons we get to chose from. Kudos or Kang, results do not vary.

'RMA reform' is one of the best examples of can kicking, of trying to make it look like they are doing something meaningful, but which will make minimal difference.
Of course, if it was radical reform then it could have a real impact. But neither party is interested in radical reform.
We will probably get a few changes that speed up process a bit, but otherwise it's largely getting the legal drafters out to rephrase legislative speak into something a bit more woke.

We could have done RMA reform yonks ago, now it's a great idea.

Agreed Miguel, and it's a ponzi scheme the whole western world has adopted. The other aspects of the ponzi being a refusal to deleverage, and continual currency debasement and interest rate suppression being used to allow the losing gamblers to keep hanging on to their winnings.
The most disturbing aspect is how the original pool of borrowing gamblers has been exponentially increased by co-opting a large portion of the population into the ever-broadening scheme. The belief seems to be that once the final collapse does come, all these gamblers will be allowed to keep the assets they have secured using (basically fradulent) debt. That there will be some gigantic debt forgiveness and these brazen gamblers will be allowed to keep all the land and property they have snaffled. I would say that at point you probably will see a violent revolution on a global scale, as the 'have nots' finally rise up.

Personally I'm neither Labour nor Nats so I'm only holding accountable, right now, the ones who arent doing their job. To be fair tho, this is the fastest price hike I've ever seen

Don't blame me, *I* voted for Kodos.

Oughtn't the plural be 'bodies corporate'?

There are those who are full of hot air and those who get things done. Get on with it already.

Which one of those do you think Phail Twyford is?

Phail Stoner Tryhard

You can't line dry your washing, you can't sit out in your camping chair under your own shade tree, so I don't know what you could do to make this way of living attractive to me

It's only attractive if you've got no other choice

You get an apartment. You discover that you and the apartment have been 'sold' to some rapacious manager company with an ironclad decades long contract.
You get stuck with enormous management fees for nothing much, for years.
And it's legal.

No. before you buy the apartment you do proper due diligence. It's not that hard.

What size and how many apartments are they talking about

This is a positive move.

Most of the comments here are negative.

Pretty much every law could/should have been passed sooner, or shouldn't have been passed at all, this is in the former category, so it's a good one.

It's something that should have been sorted years ago, but of course, the bad lead had already been set by councils not putting aside their depreciation for when that is needed, ie now, hence the huge rate rises coming most cities way.

If cities and many houses and BC's were ships they would be rusty hulks. leaking oil and flying under a Liberian flag.

A properly run BC's costs are less than the same house equivalent, but the comparison is hard to see because house owners don't run the matching long-term maintenance plans like good BC's do.

Looks like it may not go far enough but it is a start. I still view apartments as a dubious proposition. There are so many things that you have no control of that can bite you in the backside, other parties involved who seem to have a mainline into your wallet with you having any control. They are larger and far more complex structures than a simple single dwelling, so the scope for things to go wrong is greater and the cost if so, far greater. To top it all off you pay a hell of a lot more per square meter and end up with very diminished accommodation without and land or privacy. People must be truly desperate to buy one in NZ. I have stayed in friends apartments in Australia and they are far larger and more comfortable for a lower price. If people are going to be encouraged into them, the proposition needs to be substantially improved.

We'd love to live in one someday, but it is very hard to 'hand-over' control to a body corp after years of oyo with a house and a section. The biggest rip off on apartments is that you also have to pay (in Welly City anyway), what seem to me to be exorbitant rates on top of the body corp fees.

No, it's back to front, you are paying exorbitant capital prices and underpaying on operational rates. The BC figures are about right as they are directly traceable to the costs incurred.

Although most BC costs are short 15% that should be put aside for long-term replacement costs.

I'm saying the city council rates seem high.

The problem with rates is you cannot see where the money really goes, so there is money wasted in many areas, but lacking in where it should be going.

But whatever it is, we know it's not enough otherwise the infrastructure would not be in such bad shape.

Whatever the amount, it should be enough to cover prudent operating costs, annual maintenance, and long-term maintenance. It is the lack of long-term maintenance funds that is now coming to the fore.

Going to the Gold Coast is mind-blowing. 90sqm apartments with two bedrooms+, often for half the price of something pokey in NZ. Plus on a light rail line so no real need for a car park, although I believe many do come with them as well.

I'm very interested in this point;
- Improve the way information (around weathertightness and earthquake strengthening for example) is disclosed to prospective buyers of units. This includes making financial records, past copies of general body corporate minutes and insurance cover available

I'm in the process of selling an apartment and had to go to the body corp to get this information. I was shocked that they slapped a $400 bill on it, when I assumed that as I pay a body corp fee monthly I would have legal right to access the information about the body corp...

Well, you did have a right, just like they have a right to charge you for the time involved, especially an owner leaving, otherwise, the cost of that is being paid by the ones that stay.