Body Corporate 

What is a body corporate?

A body corporate is a legal entity automatically created when a developer subdivides a plot of land and registers it with Land Information New Zealand as a unit title development.

Most townhouses and apartments are unit titles governed by a body corporate. Every owner of a unit title automatically belongs to the body corporate when they buy a unit.

Decisions about the building and grounds are made by the body corporate members (unit owners). This includes insurance maintenance, annual fees, how common areas can be used etc.

Some body corporates hire a professional body corporate manager to look after the day to day running of the development, which means more fees but less work for the members. This doesn’t affect the member’s rights.

The Tenancy Services website has more information about body corporates.

The Home Owners and Buyers Association Inc (HOBANZ) also has a guide to body corporates.

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What is a unit title?

Like other forms of property ownership, a unit title can be sold or bought, leased or mortgaged.

A unit title is made up of:

  • ownership in a particular unit e.g. apartment plus a car park, courtyard and/or garden
  • an undivided share in the ownership of the common property e.g. driveway, lifts, communal gardens

If you own a unit title or are thinking of buying one, you need to know your rights and responsibilities as a unit owner.

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I am a unit title owner - what are my rights?

You have the right to:

  • attend body corporate meetings – it’s important to attend these, because this is where you have a chance to have your say on body corporate fees, rules around what unit title owners can and can’t do, etc.
  • quiet enjoyment of your unit, without interruption by other owners or occupiers 
  • have any dispute resolved (e.g. by using a dispute resolution process)
  • enforce body corporate rules

You also have responsibilities, to:

  • follow the body corporate rules 
  • pay all rates, taxes, charges, body corporate levies and other outgoings associated with your unit 
  • repair and maintain your unit so that no damage is caused to other units or the common property 
  • comply with all laws and legal requirements relating to your unit 
  • notify the body corporate if you want to make changes to the structure of your unit, before work begins 
  • not do anything that breaches or undermines any insurance policy held by the body corporate.

For more information see the Unit Titles section of the Tenancy Services website.

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What fees can the body corporate charge me for?

The body corporate usually charges an annual levy to cover day-to-day expenses such as maintenance, insurance premiums and administration costs, and utility charges for common services e.g. outdoor lighting. There may be special one-off costs if the yearly fee does not cover something e.g. a lift replacement. 

In some cases the body corporate may ask you to pay them back for the costs of repair or maintenance work. For example if some maintenance work benefits you more than the other owners, if it is carried out on your unit only, or if you caused the damage which required the repair work.

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How does a body corporate decide what to do about issues like maintenance and improvements?

These decisions are usually: 

  • covered by the body corporate rules
  • decided by the body corporate committee, or
  • voted on by body corporate members at an Annual General Meeting (which must be held every year) or Extraordinary General Meeting (which can be held any time during the year). 

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I am a member of a body corporate committee - what are my responsibilities? 

A body corporate can delegate some or all of its duties to an elected body corporate committee. Your duties as a committee member will be specified on the ‘notice of delegation’. Committee members should be given these soon after they are elected.

Responsibilities which may be delegated to the body corporate committee include:

  • Developing or reviewing a long term maintenance plan for at least the next ten years. The plan should identify future maintenance requirements, estimate the costs involved, and state whether there is a long term maintenance fund.
  • Maintaining a long term maintenance fund (unless it has been decided by special resolution not to have one)
  • Organising maintenance and repair work to common property e.g. cladding, roof, car parks, and arranging for the payment for that work
  • Keeping records of the body corporate’s financial transactions and preparing financial statements
  • Working out how much unit owners have to contribute towards body corporate expenses
  • maintaining the operational account that contributions are paid into
  • Insuring the buildings
  • Enforcing body corporate operational rules e.g. about the use of common property

As well as the annual body corporate meeting, you may be required to attend regular committee meetings.

The Tenancy website has information about the responsibilities of the chairperson of the body corporate.

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What’s different about buying or selling a unit rather than a house?

When you buy a unit you take on additional responsibilities which you wouldn’t have to if you buy a house and land, for example attending body corporate meetings and paying body corporate levies.

This is why, when someone is selling a unit title, they must give potential buyers disclosure statements to help them make an informed decision.

There are three types of disclosure: 

  1. pre-contract disclosure statement (which the seller provides before entering into an agreement for sale and purchase)
  2. pre-settlement disclosure statement (which the seller provides after entering the agreement for sale and purchase but before settlement of the sale) and
  3. additional disclosure (which the seller provides when the buyer requests it)

It is also worth asking the seller about things like: 

  • insurance details
  • the body corporate’s long term maintenance plan
  • the amount of levies 
  • whether the seller owes any money to the body corporate
  • any maintenance on the unit which the body corporate intends to do in the next 12 months.

It is also a good idea to ask whether the body corporate has a fund to pay for maintenance and any developments specified in their long term plan.

You can download disclosure statement templates from the Tenancy Services website.

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What can I do if an apartment dweller is not following the body corporate rules?

You can talk to the owner about it - take a copy of the rules with you in case they are not aware of them. If the apartment dweller is a tenant, you can talk to their landlord as they are responsible for ensuring the tenant follows the rules. This doesn’t resolve the issue you can apply to the Tenancy Tribunal or go to court.

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How can we resolve a dispute with the body corporate?

Ideally you should try to come to an agreement with the body corporate. If you are not able to reach an agreement, either party can apply to the Tenancy Tribunal or have the matter settled in court.

You can apply to the Tenancy Tribunal if:

  • the dispute is $50,000 or less and 
  • the dispute is not about the application of insurance money or the title of land (e.g. a redevelopment)

If it is not appropriate for the Tenancy Tribunal to deal with the dispute, it can be referred to the District Court if:

  • the dispute is about the application of insurance money up to $50,000 or 
  • the dispute is not about the application of insurance money or the title of land, and is between $50,000 and $350,000

Otherwise, the matter can go to the High Court, which can hear:

  • disputes relating to title of land or application of insurance money, and over $50,000 or 
  • other disputes over $350,000

You can read more about dispute resolution relating to unit titles is on the Tenancy Services website or contact MBIE's Unit Titles service. You can call them on 0800 UNIT TITLE (0800 864 884) or send an email.