Before you buy

Make sure you understand your responsibilities under the Unit Titles Act 2010. Gather information about the unit, body corporate, and the development before you commit. Your lawyer can help you with this.

Unit Titles Act 2010(external link) — New Zealand Legislation

Units that people own are called principal units. This could be an apartment, a set of offices or a shop. Accessory units are used with a principal unit. They could be carparks, or storage space.

The shared parts of the complex are known as ‘common property’. These could be hallways, stairs or shared gardens.

Guidance and information on buying or selling a property(external link) — settled.govt.nz

Body corporate membership

When you buy a unit title, you automatically become a member of the body corporate. The body corporate meets at least once a year to discuss issues and vote on decisions.

The body corporate looks after the common areas, and the property as a whole.

Body corporate: how it works

Pre-purchase disclosure statements

The seller has to give you at least 2 disclosure statements. These give you more information about the unit title.

Pre-contract disclosure statement

Sellers will need to provide a wider range of information in the pre-contract disclosure statement, before entering into an agreement for sale and purchase.

Information to disclose in a pre-contract disclosure statement

A pre-contract disclosure statement for a sale of an existing unit must include, as far as it can be provided, as follows:

Financial information

• financial statements and any audit reports for the previous 3 years
• confirmation of the 12 month period that is the financial year
• the body corporate levies payable for the unit for the current financial year
• the balance of every fund or bank account held or operated by or on behalf of the body corporate at the date of the last financial statement

Maintenance information

• a copy of the long-term maintenance plan
• the next review date for the long-term maintenance plan
• any proposed works under the long-term maintenance plan to be carried out or begun within the next 3 years and the estimated costs
• details of any maintenance (whether in the long-term maintenance plan or not) that the body corporate proposes to carry out on the unit title development in the coming year and how the costs will be met

Governance information

• notices and minutes of general meetings of the body corporate and the body corporate committee for the previous 3 years:
  • including all supporting documentation; but
  • excluding any information that may be removed – see below
• a summary of the insurance cover the body corporate maintains for the unit title development, including:
  • the insurer’s name and contact details
  • the type and amount of cover, the annual amount payable for it, and the excess payable on any claim under it
  • any specific exclusions from cover
  • a statement of where and how the insurance policy can be viewed
• the name and contact details of the body corporate manager or managers

Remediation, defects and proceedings

• any remediation reports commissioned by the body corporate within the previous 3 years
• whether the body corporate or body corporate committee has actual knowledge that any part of the unit title development has:
  
  • weathertightness issues, whether the weathertightness issues have been remedied or not, and whether or not a claim has been made under the Weathertight Homes Resolution Services Act 2006; or
  • earthquake-prone issues; or
  • any other significant defects in the land or the unit title development that may require remediation
• whether the body corporate is involved in any proceedings in any court or tribunal and details of the proceedings

Explanations

• an explanation of the following:
  • unit title property ownership
  • unit plans
  • ownership and utility interests
  • body corporate operational rules
  • the information required to be contained in a pre-settlement disclosure statement
  • records of title
  • land information memoranda issued under section 44A of the Local Government Official Information and Meetings Act 1987(external link) — New Zealand Legislation
  • easements and covenants.

Information that may be removed from body corporate general meeting and committee meeting minutes

• Information in the minutes may be removed if:
  • disclosing the information would be a breach of the Privacy Act 2020 or any other law; or
  • the information is subject to legal professional privilege; or
  • confidentiality of the information must be protected on grounds of commercial sensitivity.

A pre-contract disclosure statement for a sale of an off-the-plans unit must include, as far as it can be provided to the extent that it is capable of being provided:

• summary of the draft financial budget for the unit title development, including an estimate of an average 12-month budget
• an estimate of the proposed ownership interest for the unit based on the sales value. Where an actual sales value is not available, an estimate based on an estimated sales value
• an estimate of the proposed utility interest for the unit
• the draft (if any) of the body corporate operational rules that will first apply
• any service contracts have been or are proposed to be entered into that will continue after the unit purchase is settled, including:
  • any contracts for utilities (for example, telecommunications, water, or electricity)
  • any contract appointing a body corporate manager.

Go to the forms and resources page to view the Pre contract disclosure statement and the Pre contract disclosure statement (Off the plans)

Forms and resources

Ability to cancel an agreement or delay settlement – pre-contract disclosure

The sale and purchase agreement may be able to be cancelled, or a settlement delayed, if pre-contract disclosure is not provided, is incomplete or inaccurate.

If the pre-contract disclosure statement is not provided before the agreement is entered into, the buyer can cancel the agreement. If an incomplete or inaccurate pre-contract disclosure statement is provided before the agreement is entered into, the buyer can cancel the agreement in some circumstances.

Pre-settlement disclosure statement

Some additional information will be required once the sale and purchase agreement has been entered into, and before the settlement of the sale. The seller must provide the pre-settlement disclosure statement no later than the fifth working day before the settlement date.

Information to disclose in a pre-settlement disclosure statement

A pre-settlement disclosure statement for a sale of an existing unit must include:

In relation to the unit being sold:

• the unit number
• the body corporate number
• the amount of any contributions levied by the body corporate in respect of the unit being sold
• the period covered by such contribution/levy
• the manner of payment of the levy
• the date on or before which payment of the levy is due
• whether any levies (including part of any levy) due to the body corporate are unpaid and, if so, the amount
• whether legal proceedings have been instituted in relation to any unpaid levy
• whether any metered charges due to the body corporate are unpaid and, if so, the amount
• whether any costs relating to repairs to building elements or infrastructure contained in the unit are unpaid and, if so, the amount
• the interest rate on any money owing to the body corporate by the seller

In relation to the unit title development:

• whether there are any proceedings pending against the body corporate in any court or tribunal
• whether there are any proceedings:
  • initiated by the body corporate and pending in any court or tribunal; or
  • intended to be initiated by the body corporate in any court or tribunal
• whether there is any written claim by the body corporate against a third party that is yet to be resolved
• whether there have been any changes to the body corporate operational rules since the pre-contract disclosure statement.

A pre-settlement disclosure statement for a sale of an off-the-plans unit must include to the extent that it is capable of being provided:

• the information required for the pre-settlement disclosure for an existing unit (as set out above)
• the name and contact details of the body corporate manager, if there is one
• the same insurance information as is required for a pre-contract disclosure statement for an existing unit
• the details of any contract or court decision that will bind the body corporate or the unit owner after the settlement date
• the details of any obligation arising from the decision of a court or tribunal that will bind the body corporate or the unit owner after the settlement date
• A copy of the long-term maintenance plan
• A copy of the written agreement setting out the body corporate manager’s terms of employment or engagement
• A copy of the body corporate operational rules that apply to the body corporate, including any amendments, revocations, or additions to the rules that have been made by the body corporate but that do not yet have effect
• A copy of the minutes of the most recent general meeting of the body corporate

Go to the forms and resources page to view the Pre settlement disclosure statement and the Pre settlement disclosure statement (Off the plans).

Forms and resources

Ability to cancel an agreement or delay settlement – pre-settlement disclosure

The buyer may be able to delay settlement, or cancel the sale and purchase agreement, if pre-settlement disclosure is late, not provided, is incomplete or inaccurate. If a seller has not provided a complete and accurate pre-settlement disclosure statement 5 working days before settlement, the buyer can delay settlement until 5 working days after an accurate and complete pre-settlement disclosure statement is provided.

The buyer must give the seller notice if they intend to cancel the sale. This notice provides the seller an opportunity to correct the pre-settlement disclosure statement. If the amended pre-settlement disclosure statement is complete and accurate, the buyer cannot cancel the agreement.

Ownership and utility interest

Once you’ve bought a unit title, the ownership interest of your unit is your share of the value of the whole complex.

Utility interest is usually the same as the ownership interest. It may differ if the body corporate agrees that costs should be shared differently.

Utility interest decides how much you will pay to the body corporate as your levy. This is your share of the overall costs for the whole complex. The levy amount will be included in your pre-contract disclosure statement.

The developer is able to assign a single utility interest or assign multiple utility interests that relate to a particular service or amenity. Some interests will be able to be assigned to some units only, for example, an amenity that is only used by particular units, such as a private courtyard.

The body corporate can also decide to reassess the utility interest, by special resolution. The reassessment can assign a single or multiple utility interests.