MBIE monitors and assesses compliance by bodies corporate and body corporate managers with the Unit Titles Act. This is now a proactive function, as opposed to responding to complaints about breaches.

Where a body corporate or unit owner has breached their obligations under the Unit Titles Act, the other party should take their own action through the Tenancy Tribunal or courts.

Tenancy Tribunal process for unit titles disputes

Requesting documents

MBIE can request documents that it reasonably requires to carry out any of its functions under the Unit Titles Act. MBIE is permitted to inspect and make records, or take copies of, the documents.

The body corporate or body corporate manager must produce the documents within 10 working days of receiving the request.

Information bodies corporate and body corporate managers must keep

Entering unit title properties

MBIE is permitted to enter and inspect a unit title development:

• with the consent of the body corporate or unit occupant (for the principal unit or accessory unit) – to investigate whether a breach has occurred; or
• when authorised by an order of the Tenancy Tribunal, and with written notice given – if it has reasonable grounds to believe there has been a breach, and the inspection is reasonably necessary for its functions and powers, with 24 hours written notice.

The power of inspection includes the ability to take photographs, video recordings, or samples to test.

The body corporate is required to give MBIE reasonable assistance to enable access and allow them to carry out the inspection. A person authorised by the body corporate can be present at the inspection.

Issuing improvement notices

MBIE may issue an ‘improvement notice’ to a person for a breach or likely breach of the Unit Titles Act or regulations.

A person who has been issued with an improvement notice can challenge the notice by applying to the Tenancy Tribunal within 28 days. MBIE can choose to withdraw an improvement notice.

MBIE may penalise a party who fails to comply with an improvement notice.

Applying for an administrator

Various parties can, under the Unit Titles Act, apply to the High Court for an administrator to be appointed to manage the unit title development on behalf of a body corporate. MBIE can now also make an application.

Taking over legal proceedings

MBIE can take over legal proceedings if a person has committed a serious breach of the Unit Titles Act or has persistently breached the Unit Titles Act.

They must be satisfied it is in the public interest to take on legal proceedings, and before doing so must obtain the written consent of the relevant party.

For further details on how proceedings may be taken please refer to Section 202F Unit Titles Act.

Information on taking over legal proceedings(external link)  — New Zealand Legislation

Issuing pecuniary penalties

The Tenancy Tribunal can order a body corporate or body corporate manager to pay a pecuniary (financial)  penalty if MBIE has made a successful application to the Tribunal in relation to certain non-compliance. The breach must be intentional and without a reasonable excuse. A pecuniary penalty does not result in a criminal record.

The Tenancy Tribunal will determine what the penalty should be in any situation, up to the specified maximum amounts. The maximum amount of the penalty is between $1,500 and $5,000, depending on the breach.

A body corporate or body corporate manager cannot be liable for more than one pecuniary penalty for the same conduct.