Volt Apartments by Conrad on the Queen St/Mayoral Dr corner. Photo / Brett Phibbs
Volt Apartments by Conrad on the Queen St/Mayoral Dr corner. Photo / Brett Phibbs
New Zealand's busiest apartment developer fears the industry could be hampered if a long-awaited law change goes ahead and it opposes more disclosure to off-the-plan unit buyers.
Submissions are now public on reforming New Zealand's $50 billion apartment sector, with many industry specialists backing strengthening the law, a move championedfor years by ex-Auckland Central MP Nikki Kaye and National leader Judith Collins.
Labour backs the law change.
But Conrad Properties opposes part of that, saying it built 4300 Auckland units and is developing a further 570 city places so has an "exceptional understanding" of existing law.
"We predict these proposed changes will encumber the development of much-needed residential housing where we need it most: our city centres," Conrad directors Jamie Hutchens and Benjamin Dearlove told the select committee.
Conrad built some of the city's largest blocks including Zest Apartments at 72 Nelson St, Stanford Apartments at 189 Hobson St, Harvard Apartments at 147 Hobson St, Volt at 430 Queen St, Eclipse Apartments at 156 Vincent St and Aura Apartments at 53 Cook St.
The business was founded by ex-Bayleys agent Robert Holden and it pioneered many big projects last decade.
Conrad told the committee that strengthening the law for off-the-plan apartment sales by forcing developers to provide more regular disclosure statements would mean fewer apartments built.
Apartment law reform: going thorugh Parliament. Photo / Alan Gibson
"Funders - both mezzanine and primary bank - require watertight sales in order to provide funding. No funder will fund off-the-plan developments if they do not have complete pre-sale certainty," Conrad's submission said.
The new law would make developers provide more pre-settlement disclosure statements to give buyers more information.
But Conrad said it could take two to three years to finish a development and establish a body corporate, so "expecting developers to provide an updated disclosure statement to all purchasers at any time and within five working days through this period is unfeasible".
Enabling buyers to delay settlement if disclosures were late, incomplete or refused was even worse, Conrad said.
Conrad's Zest Apartments on Nelson St. Photo / Richard Robinson
In March, a Members' Bill to amend the Unit Titles Act passed its first reading in Parliament.
The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill, under National housing spokeswoman Nicola Willis, wants to reform law on managing and running apartment blocks.
• Increasing managers' professionalism and standards;
• Long-term maintenance planning and funding should be adequate and proportionate to the size of a building;
• Smaller building owners could opt out of long-term maintenance plans;
• Reducing proxy farming by setting a maximum of proxy votes at 5 per cent;
• Clarifying 25 per cent quorum AGM requirements;
• Enabling the flexibility to apportion utility costs based on use.
Auckland Council Planning Committee chair Chris Darby, deputy chair Josephine Bartley and Māori Statutory Board independent member Tau Henare backed the changes, saying more apartments were planned.
"Tāmaki Makaurau is home to one-third of New Zealand's population, with over 1.7 million people. Over the next 30 years, this could increase by another 720,000 people, potentially requiring another 313,000 dwellings and 263,000 jobs.
Should apartment buyer rights be strengthened? Photo / supplied
"The rate and speed of Auckland's population growth puts pressure on our communities, our environment, and our housing and infrastructure networks, including roads. It also means increasing demand for space, infrastructure, and services necessary to support this level of growth," they said.
More apartments, townhouses, flats and units were being consented in Auckland than stand-alone dwellings.
Leonie Freeman, Property Council of New Zealand chief executive, said reform was "long overdue" but refinements were needed to the law change's proposals to alter disclosure rules, body corporate governance and planning and funding long-term maintenance plans.
