Unit Titles Amendment Act 2013

The previous update to the law, the Unit Titles Act 2010, was a welcome attempt, but was in many ways an imperfect beast. A number of technical amendments have been made to the Unit Titles Act 2010 with the passing of the Unit Titles Amendment Act 2013 on 5 December 2013. The most important changes include:

It has now been clarified that a majority of votes (i.e. at least 51%) will be needed to pass an ordinary resolution. This removes the head-scratching scenario under the Unit Titles Act 2010 whereby an ordinary resolution could be passed with 50% support (even though that necessarily meant that 50% of voters did not support the motion). It is unfortunately still unclear whether voting is based on 'one vote per unit' or on ownership interest/unit entitlement.

It has now been clarified that a purchaser who wants an Additional Disclosure Statement can request specific information only if they wish i.e. request some but not all of what would normally be required by an Additional Disclosure Statement. This will cut the cost of producing this information, and prevent owners having to provide information which the purchaser might regard as superfluous.

It has been clarified that the Tenancy Tribunal is able to hear disputes relating to unpaid levies. Previously a body corporate had no choice but to apply directly to the courts and so the cost of pursing the arrears often outweighed the amount actually owed.

The wording of section 138 of the Unit Titles Act 2010 has been tweaked to make it clear that a body corporate is required to repair and maintain (and now replace where necessary) the common property, assets used in conjunction with the common property, other assets of the body corporate, and any building elements and infrastructure which relate to or serve more than one unit.

While the Unit Titles Amendment Act 2013 has made some useful changes, many commentators were concerned that it did not go far enough. As a result the Ministry of Business Innovation and Employment has announced that a second more substantial review will be shortly forthcoming. The Ministry will seek submissions from interested lawyers, agents, property managers and unit owners.

Personal liability of body corporate chairperson or committee members

Finally, there has been an important update in case law as it relates to the potential liability of a body corporate chairperson and/or members of a body corporate committee. As you will be aware, the Unit Titles Act 2010 requires that a body corporate must appoint a chairperson. It is also often useful, particularly in larger unit title developments, to delegate many of the body corporate's powers to an appointed committee.

The body corporate chairperson and committee members appointed under the Act now have significant responsibilities placed on them. The recent court case of Guardian Retail Holdings Limited v Buddle Findlay held that a body corporate chairperson or committee member may be personally liable if they act in a manner which is inconsistent with the Unit Titles Act 2010, even if the mistake was innocent or made with the best intentions.

We recommend that a unit owner thinks very carefully about becoming a chairperson or joining the committee unless they are comfortable that the body corporate has an adequate level of appropriate insurance cover in place for its officers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.