QCL INFO Sheet on Unit Titles

BASIC DISCLOSURE REQUIREMENTS UNDER
THE UNIT TITLES ACT 2010
THE ACT
The Unit Titles Act 2010 (“the Act”) came into force on 20 June 2011. The Act is accompanied
by the Unit Titles Regulations 2011. Some provisions will continue to apply for a transitional
period while the Unit Titles Act 1972 is repealed from 20 June 2011.

Download as PDF here QCL Infosheet on Unit Titles
WHAT IS NEW?
The Act aims to bring clarity and better inform consumers by added disclosure requirements.
Consumer protection means there is added disclosure requirements for vendors selling their unit
titles under s146 and s147 which means they must provide pre-contractual disclosure
statements to the potential purchasers before signing the agreement and then pre-settlement
disclosure before 5 working days from the settlement date.
The new idea of layered developments and the newly defined “unit entitlements” of “unanimous
consent” provisions will bring flexibility for developers for unit title scheme structures and
management. There are additional duties for the Body Corporate and the Body Corporate
Chairman/Committee.
NEW DISCLOSURE REGIME
1. Introduction
The Act introduces a mandatory disclosure regime for unit title developments as follows:
(a) pre-contractual disclosure by the vendor to all potential purchasers before their
sign an agreement for sale and purchase;
(b) pre-settlement disclosure by the vendor to the purchaser five working days
before settlement; and
(c) additional disclosure which may be requested by the purchasers (with
additional costs incurred by the purchaser).
All disclosure statements must be dated and signed by the vendor or by its authorised agent.
These are mandatory requirements and one cannot contract out.
2. Pre Contractual Disclosure (s 146 of the Act)
The following are the key aspects of the disclosure regime:

• If, before settlement, the seller becomes aware of any inaccuracies in any of the
disclosure statements provided to a buyer, the seller must provide another disclosure
statement correcting those inaccuracies.
• Differing remedies apply according to the disclosure obligations with deferring of
settlement or termination allowed where post-contractual disclosure is not made on time.
• Developers and sellers will be responsible for ensuring that the disclosure statements
provided are accurate as the new Act provides that buyer’s are entitled to rely on the
information included.
3. Pre Settlement Disclosure (s 147 of the Act)
The Act has replaced the previous section 36 certificate, with a pre-settlement disclosure. The
disclosure must occur more than 5 days prior to settlement. If a pre-settlement disclosure is not
received, the purchaser can defer settlement (s149) or even cancel the agreement (s151).
The following information must be provided:
(a) the unit number; and
(b) the body corporate number; and
(c) the amount of the contribution levied by the body corporate under section 121
of the Act in respect of the unit being sold; and
(d) the period covered by such contribution; and
(e) the manner of payment of the levy; and
(f) the date on or before which payment of the levy is due; and
(g) whether a levy, or part of a levy, due to the body corporate is unpaid and, if so,
the amount of the unpaid levy; and
(h) whether legal proceedings have been instituted in relation to any unpaid levy;
and
(i) whether any metered charges due to the body corporate are unpaid and, if so,
the amount of unpaid metered charges; and
(j) whether any costs relating to repairs to building elements or infrastructure
contained in the unit are unpaid and, if so, the amount of unpaid costs; and
(k) the rate at which interest is accruing on any money owing to the body
corporate by the seller; and
(l) whether there are any proceedings pending against the body corporate in any
court or tribunal; and
(m) whether there have been any changes to the body corporate operational rules
since—
(i) the additional disclosure statement, if one has been provided; or
(ii) the pre-contract disclosure statement.
4. Additional Disclosure (s 148 of the Act)
Additional information may be requested by the Purchaser at the Purchaser’s cost. An
interesting point to note is that the new disclosure regime does require specification of insurance
arrangements which means that unless additional disclosure statements are requested (which
cannot be activated within the first five days (s228)), the Purchaser may not have a way of
finding this information out.
Contact the Property Team:
John Jon (Associate) / Tina Hwang (Solicitor) / Jan Chen (Solicitor)
john@queencitylaw.co.nz / tina@queencitylaw.co.nz / jan@queencitylaw.co.nz
09 970 8829 / 09 970 8812 / 09 970 8827
www.queencitylaw.co.nz
NEW BODY CORPORATE DUTIES
5. Introduction
Regardless of Body Corporate rules and current arrangements, the Act prescribes mandatory
duties and powers for the Body Corporate to follow including:
• Insuring the property;
• Repair and maintenance of the common property;
• Establishment of various funds and accounts;
• Levying contributions from owners;
• Record keeping and financial statements;
• Calling meetings;
• Keeping a register of members;
• Fixing ownership and utility interest; compliance with body corporate operating rules; and
• Spending, borrowing and investing of money.
Disclaimer:
We have taken every care to ensure that the information given is accurate, however it is
intended for general guidance only and it should not be relied upon in individual cases.
Professional advice should always be sought before any decision or action is taken.
Queen City Law
P O Box 6908, Wellesley Street
Telephone: 0-9-970 8810
Facsimile: 0-9-970 8820
DX CP24080