Things You Need To Know Before Purchasing A Unit Title Property

Apartment living is becoming more and more popular in New Zealand, particularly in Wellington and Auckland. But owning a unit in a unit title development is not how many New Zealanders traditionally imagine property ownership. Rather than living in one’s own castle, the owners of unit title properties form part of a community where they must respect and understand the environment in which they have chosen to live.

Of course, in a manner that is consistent with traditional property ownership, you are responsible for the maintenance and repair of the principal unit in which you live (and any accessory units which are attached to it). However, you also have a responsibility, together with all of the other owners within the unit title development (collectively referred to as the ‘Body Corporate‘), to maintain and repair the common property and the internal and external elements of the unit title development. These duties are carried out by the Body Corporate, which may consist of all of the owners in the unit title development (more common where there is a small number of units within the development) or the Body Corporate committee which is elected by the owners of the units within the unit title development.

In addition to this, unit title owners also have obligations towards the other owners within the unit title development and the Body Corporate.

In order for the Body Corporate to carry out its maintenance obligations it charges each of the unit title owners a levy.

All of this means that there is a lot to think about when purchasing a unit within a unit title development. As well as seeking information about your individual unit, it is also vitally important that you obtain as much information as you can in respect of the Body Corporate, because if you purchase the unit, your obligations extend to maintenance and repair of the unit title development as a whole.

Under the Unit Titles Act 2010, you must be provided with a pre-contract disclosure statement by the vendor prior to entering into the contract. The information provided in the pre-contract disclosure statement is limited and does not give you a full picture of the dealings of the Body Corporate. For this reason, we would strongly recommend that you request an additional disclosure statement which provides you with much greater detail. There is a cost involved in obtaining this statement, which usually ranges between $300-$500.

In order to provide you with the maximum protection, we also recommend that you insert the following condition into your contract (whether or not you initially intend obtaining an additional disclosure statement):

‘This agreement is conditional upon the purchaser’s approval, at their absolute discretion, of the additional disclosure statement within 5 working days of the receipt of the statement.’

If you have any questions or concerns about purchasing a unit title property, then please feel free to contact us on 04 970 3600.

For more detailed information on the new Unit Titles Act 2010, go to our article ‘Unit Titles Act and What It Means For You’