New Regulatory Systems Building and Housing Amendment Act Introduced

13 October 2016

The Regulatory Systems (Building and Housing) Amendment Bill (RSAB) containing 13 minor and technical amendments to the Unit Titles Act 2010 (UTA) was introduced into the House on Wednesday, 12 October 2016.

The RSAB removes unnecessary compliance burden and clarifies sections of the UTA where confusion over interpretation has arisen. The changes were initially consulted on as part of the Unit Titles Amendment Bill 2013, but not included in that Bill, instead being included in the RSAB. The UTA changes were consulted on again as part of an RSAB exposure draft released in December 2015. Stakeholders have been supportive of the changes.

The UTA changes in the RSAB are separate to any changes to the UTA being considered as part of the current targeted review.

The RSAB can be read and it's progress tracked here

A summary of the changes to the UTA follows:

Clarifying when body corporate operational rules can be altered (Section 105)

The change clarifies that the default body corporate rules can be altered by the developer on deposit of the unit plan with LINZ. At present this provision is recorded as an aside which has led to interpretation issues.

Removing the time limit to apply to cancel a unit plan after a High Court decision (Section 189)

The change removes the six month time limit to apply to the Registrar-General of Land to cancel a unit plan following a High Court decision to do so. Six months may not be enough time for bodies corporate to comply with the conditions imposed by the High Court, and there is no clear purpose for a time limit.

Clarifying who prepares and pays for a new unit plan or amendment to an existing unit plan needed as a result of public works (Section 15)

The change clarifies that if a new unit plan or amendment to an existing unit plan is required as the result of public works, the new plan or amendment must be prepared by the authority carrying out the public work, at its own expense. Currently this requirement can be read as optional.

Removing the requirement for ownership interest to be reassessed before subdivision of a principal unit (Section 32)

The change removes the requirement for the ownership interest of a principal unit to be reassessed before subdivision of that unit. The requirement was redundant as it is extremely difficult to reassess the ownership interest of a principal unit in isolation from the rest of the unit title complex.

Allowing bodies corporate to forgo reassessing ownership interests when applying to cancel a unit plan (Section 177)

The change allows a body corporate to forego the requirement to reassess the ownership interests of all units where it intends to apply to the Registrar-General of Land to cancel the complex's unit plan. In some circumstances, it is unnecessary to carry out this reassessment, for example if a single owner owns all the units, or if the ownership interests were recently reassessed.

Changing the words 'reassess' and 'reassessment' to 'assess' and 'assessment' when referring to ownership and utility interests (Section 41)

The change replaces the words 'reassess' and 'reassessment' with 'assess and assessment' in the section that covers the reassessment of ownership and utility interest. The existing terms have led to confusion as the initial assignment of ownership and utility interest is not described as an 'assessment' in the UTA.

Clarifying that the terms 'easement' and 'covenant' include easements and covenants in gross (Section 62 and 63)

The change clarifies that the sections that cover the registration of easements and covenants apply to easements and covenants in gross (easements and covenants that attach a particular right or obligation to an individual or entity rather than to the property itself) which affect the common property and units respectively. There was confusion as to whether the sections applied to easements and covenants in gross.

Clarifying that redevelopments require amending the unit plan (rather than requiring a new unit plan) only when the redevelopment makes no change to the common property (Section 65)

The change clarifies that the section that covers redevelopments that require amending the unit plan (rather than requiring a new unit plan) only applies where the redevelopment makes no change to the common property and does not alter the number of existing units. The intent of this section is to only apply to changes to boundaries between units, and not when there is a change to the boundary of the common property.

Permitting the variation of terms and conditions of a ground lease (Section 167)

The change permits the variation of terms and conditions of a ground lease and clarifies that renewal or variation of the ground lease will not wind up the unit title complex. Variations are often desirable for the lessor and the lessee.

Clarifying how a merger between base land and leasehold units will be recorded on the fee simple title and the supplementary record sheet (Section 169)

The change adds a provision on how the interests will be registered on the fee simple title (prior to cancellation) and the supplementary record sheetwhen either the lessor of the base land acquires all of the leasehold units or the unit owners acquire the fee simple interest in the base land. This is currently not covered in the UTA.

Adding carparks to the definition of principal units (Section 7)

The change clarifies the meaning of a principal unit so that it can include one or more car parks. A principal unit may be multiple car parks, for example if the unit title complex is a parking building.

Clarifying the 'time of sale' for assessing ownership interests to distribute proceeds from the sale, lease or license of common property (Section 56)

The change clarifies that the 'time of sale' in the section that covers the sale, lease or license of common property is the date that payment is made by the purchaser, lessee or licensee. This is used to determine the ownership interests for distribution of the proceeds of the sale, lease or license.

Adding a timeframe for a chair to call an extraordinary general meeting when requested to do so (Section 90)

The change adds a three week timeframe to the requirement for a chairperson to call an extraordinary general meeting of the body corporate when requested to do so by 25 per cent or more of the unit owners. Currently there is no timeframe, which means the chairperson can delay the meeting unnecessarily.

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