Legal implications of the Unit Titles Amendment Act 2022

Navigating the new landscape and the consequences of non-compliance

The Unit Titles Amendment Act 2022 (UTAA 2022) brought significant changes to the legal landscape for body corporates in New Zealand. It introduced various provisions aimed at strengthening governance and transparency, with a key focus on ensuring proactive and well-planned maintenance of body corporate properties. For body corporate chairs, managers, and property professionals, understanding these legal implications and the consequence of non-compliance is crucial.

This article highlights some of the key legal updates of The UTAA 2022 and gives advice on how you can navigate the new landscape with confidence.

A broader scope of responsibilities

The Unit Titles Amendment Act 2022 covers several key areas of running and being a part of a body corporate in a unit title development. Having a well constructed Long Term Maintenance Plan (LTMP) is one of them but here’s a breakdown of some of the other key changes:

• Strengthened governance: The Act introduces a code of conduct for body corporate committee members, outlining expected behaviours and ethical standards. This promotes responsible decision-making and transparency within the body corporate. It also clarifies roles and responsibilities, all of which lead to better governance practices.
• Enhanced disclosure requirements: Sellers of unit titles now have a legal obligation to provide more comprehensive information to potential buyers, including financial statements, body corporate meeting minutes, and a comprehensive long term maintenance plan.
• Conflict of interest disclosures: Body corporate committee members and managers must now disclose any potential conflicts of interest before participating in decision-making processes. In the spirit of trust and fair play members are offered alternative methods of resolutions such as mediation and facilitation to address conflicts within the body corporate.
• Remote meetings and electronic voting: The Act allows for greater flexibility in conducting body corporate meetings. Unit owners must now be able to attend meetings, and vote, electronically, making participation easier and more accessible.
• Power of entry for MBIE: The Ministry of Business, Innovation and Employment (MBIE) now has the authority to enter body corporate properties for inspections if they suspect non-compliance with the Unit Titles Act.

Consequences of non-compliance with UTAA 2022

Failure to comply with the provisions of UTAA 2022 can lead to various consequences for bodies corporate and their members:

• Fines and penalties: MBIE has the power to issue fines for non-compliance, with penalties varying depending on the severity of the offense.
• Legal action: Unit owners can take legal action against the body corporate or its committee members if they believe the Act has been breached.
• Difficulty selling units: Non-compliance with disclosure requirements can make it difficult to sell units within the body corporate, impacting property values.

Embrace the change, ensure compliance

While the Unit Titles Amendment Act 2022 introduces broader responsibilities, it ultimately aims to empower bodies corporate to manage their properties more effectively and transparently. By understanding the legal implications and embracing the changes, you can ensure your body corporate thrives in the new landscape, is fully compliant and the long-term value of your property is protected.