Property editor of the NZ Herald

Owners face the bodycorp blues

Many apartment owners say rapid growth in the sector has highlighted severe failings in body corporate law.
As the towers rise so does the call for law reform by a growing band of unhappy owners.
As the towers rise so does the call for law reform by a growing band of unhappy owners.

The push for affordable, convenient properties is filling city skylines with apartment blocks - but as the towers rise so does the call for law reform by a growing band of unhappy owners.

Auckland's population is forecast to increase by nearly 250,000 in the next 10 years with a growing focus on living in apartments.

In Wellington, Neil Cooper loves living in the Dominion Building on Victoria St in the central business district but dislikes issues besetting apartment dwellers.

"I've seen some problems in my time as chairman in the last six years," he said of his role chairing the body corporate. He cited trouble with neighbours paying the body corporate fees, the long-term maintenance plan, and the need for seismic investigations of his 31-residence block.

He is particularly worried about body corporate managers, whom he calls "a law unto themselves".

That prompted him in 2012 to form the Body Corporate Chairs' Group, of which he is national president.

The group is trying to improve standards as body corporates run tens of thousands of apartments and have authority over what is often people's most valuable asset.

Sydney builder Ty Jones and his wife, Liliana, bought a Queenstown apartment three years ago, drawn to the resort town by the restaurants, vineyards and people.

But monthly charges and problems they say they had getting access to paperwork, documents and accounts left them disillusioned with their unit in Frankton Rd's Pounamu Apartments.

"They've got to change the law," said Jones of the Unit Titles Act which governs the sector. "This has got to get into Parliament.

"We've only stayed in the place for 44 days out of the last three years and yet we're being charged $257 a month for underfloor heating. We haven't even used the underfloor heating."

A dispute over money for his unit went to the Tenancy Tribunal and the couple's LT2 Property Management was ordered to pay the body corporate $4294.47 in outstanding levies. The body corporate's applications for other orders were either dismissed or held to be historic so not justified.

The tribunal noted the couple's disillusionment.

Neil Cooper, president of the Body Corporate Chairs' Group, outside the Dominion Building complex in Wellington. Photo / Mark Mitchell
Neil Cooper, president of the Body Corporate Chairs' Group, outside the Dominion Building complex in Wellington. Photo / Mark Mitchell

"The difficulty with being a member of a body corporate is that to a large degree owners have to relinquish some control of their property and body corporate affairs," it said.

An extraordinary general meeting to discuss concerns over the structure and management of the Pounamu Apartments body corporate is to be held in Auckland next week.

The rising tide of opposition to the law governing big apartment and multi-unit residential buildings could soon result in action - albeit at a snail's pace.

Cabinet minister and Auckland Central MP Nikki Kaye has taken a softly-softly approach, this year calling for people to express their views on a website she established.

Many see that as a sop, far too little as well as far too late.

Lawyer Thomas Gibbons was not impressed. "A forum of this nature isn't enough," he said.

"It is a good starting point to get various issues aired. The question is whether there is then a political will to commit resources to real reform; and then there is a question of the right regulatory balance between being prescriptive and buyer beware.

"What is disappointing is that lawyers and others have already made many submissions to the Ministry of Business, Innovation and Employment on desirable reforms, generally without any reasonable progress."

Liability concerns and issues around apartment blocks' long-term maintenance plans prompted Thursday's meeting of the Body Corporate Chairs' Group. Like Cooper, Auckland chairperson Lyn Gillingham is concerned.

"While we can all see the benefits of overhauling the Unit Titles Act, there are many pressing issues facing the sector and a significant one is long-term maintenance planning and funding," Gillingham said.

"That will be closely followed by the implications of the new health and safety legislation coming into effect in April which could possibly make voluntary committee members and chairs subject to the same penalties as company directors, particularly if they receive an honorarium.

"The group is very concerned that this may cause a flight of committee members who are already finding their legal obligations onerous and feel inadequately prepared for the challenges these roles now hold for them.

"With the expected growth in this sector there will be further risk to owners' investments if they cannot secure effective committees to run their buildings."

Gillingham said Auckland's population was forecast to increase by nearly 250,000 in the next 10 years and many people would consider living in or buying an apartment.

Yet the existing law was inadequate and the group wanted the act overhauled.

"But the group's immediate focus is on providing a support network for body corporate chairs within the existing legislation, especially the system for funding long-term maintenance of existing apartment buildings. That's why we are holding a special meeting on this topic, when so many body corporate owners have had to face inadequate maintenance funds.

"We welcome the website survey set up by Nikki Kaye, but the real target of any legislation reforms should be to place serious effort into reforms affecting the larger bodies corporate.

"These reforms should require bodies corporate of 10 or more titles to have long-term maintenance plans reflecting the life cycle of the building, fund their long-term maintenance plans and be registered under a Companies Office-style regime so key records would be available."

- NZ Herald

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