New Provisions of the Unit Titles Amendment Act Explained

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Explaining New Provisions of the Unit Titles (Body Corporate Governance and Other Matters) Amendment Act

New provisions of the Unit Titles (Body Corporate Governance and Other Matters) Amendment Act come into effect from 9 May 2023. We detail what these provisions are and answer some frequently asked questions about the Act in this article.

What is the Unit Titles (Body Corporate Governance and Other Matters) Amendment Act? 

The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 was passed into law on 9 May 2022. The object of the Act was to enhance safeguards for individuals who purchase or possess unit title properties.

Provisions of the Act have come into effect in stages: Provisions to support remote attendance at meetings came into force on 9 December 2022; most provisions have come into force this month from 9 May 2023; and additional revisions that need more time to implement will come into force on 9 May 2024.

What are the new provisions of the Unit Titles (Body Corporate Governance and Other Matters) Amendment Act?

The below changes have been brought in from 9 May 2023:

Utility Interests

The Act provides greater flexibility for bodies corporate in deciding utility interests (ownership interests), and the ability to charge for services supplied to accessory units. Utility interests are used to calculate the share of body corporate levies paid by each unit.

The ability to reassess utility interest using multiple sets will be possible from 9 May.  A different utility interest may be assigned to a unit if that utility interest is considered fair and equitable having regard to the relevant benefits and the costs to units; and shown on the documentation lodged with the unit plan (no change to the UTA). An example is that a utility interest reassessment could be applied for so that a ground floor unit does not need to pay for a lift because it is used exclusively by units on the upper floors.

Body Corporate Chairperson

A Body Corporate chairperson elected at an AGM on or after 9 May 2023 will now automatically take on the role of the Committee Chairperson unless an ordinary resolution is passed at the AGM directing the committee chair to be an elected committee member (i.e., not the BC Chair).

Changes for Body Corporate Committees:

• Committee members must have no overdue body corporate levies or other outstanding amounts payable and owing to the body corporate due at the time of nomination in order to stand for election.
• Members must satisfy eligibility requirements to exercise a vote in order to be counted when determining quorum for committee meetings and to vote on any committee resolution.
• The committee must be formed and conduct its business in accordance with the UTAA.
• An agenda must be produced for each BC committee meeting.
• Written records of meetings must be kept and minutes must be made available to all unit owners no later than one month after the meeting date.
• The committee must decide matters by simple majority and record decisions in writing.
• The committee must report to the BC on the meetings it holds.
• The committee must comply with a Code of Conduct introduced by the act.
  
  

Conflict of Interests

From 9 May 2023, committee members must as soon as practicable disclose a conflict of interest to the BC committee and detail the conflict in an interests register that is kept by the committee.

The BC or Committee Chair must keep a separate register of disclosures made by its body corporate manager.

Large Bodies Corporate

Changes for large bodies corporate (defined as having ten or more principal units) include the requirement to engage a BC Manager unless the body corporate by special resolution decides not to do so. The inclusion of body corporate managers in the Unit Titles Act is a change in itself, with the Act now setting out their responsibilities, and including a code of conduct.

From 9 May 2024 (next year) added regulations regarding long-term maintenance planning in larger bodies corporate will come into effect; in particular, a requirement to have a 30-year long-term maintenance plan. Small bodies corporate (9 units or less) can continue with having a 10-year long-term maintenance plan.

New Disclosure Regime

A new disclosure regime comes into effect on 9 May 2023 including more comprehensive disclosure requirements in a pre-contract disclosure statement (PCDS) and a pre-settlement disclosure statement (PSDS) - for example, the requirement to provide 3 years’ worth of the BC's financial reports, general meeting minutes and committee meeting minutes. Read more here.

Your Questions Answered

Understanding all the changes can be challenging. For more context watch our Unit Titles Amendment Act: Understanding the Changes webinar, or contact Crockers’ Community Living experts at  09 968 3311 or email  bc@crockers.co.nz