More Kiwis are buying flats, units, apartments, terraced homes and other "unit title" properties.

When you buy such a property you own a defined part of a building that you will live in, and share with other owners the common areas such as grounds, lifts and even pools. All owners in the complex become members of a body corporate, which runs the complex for the benefit of all.

The body corporate must, under the Unit Titles Act, hold an annual general meeting once a year. A committee of the body corporate manages the common parts of the complex typically.

Most purchases are straightforward, but prospective purchasers should ask some questions before agreeing to buy. Good agents will have done their homework and have the information to hand.


The first, says Jessica Glover, business development account manager at Crockers Property is how much the annual body corporate levies are. This is money you pay every year as your share of upkeep.

Then ask what your levies will pay for, says Glover. Some cover more than others. For example, are the gardens maintained by the body corporate or do individual owners keep up the grounds outside their property? Your levies may or may not cover a building manager depending on the number of units in the property.

The agent should supply you with a copy of the long-term maintenance plan. This will show how far ahead the body corporate committee and manager are looking ahead. It can be extremely expensive even to paint a building, for example, says Glover. Better-run bodies will have a well-developed plan to ensure this and other expensive maintenance is planned for.

Hand in hand with the plan is the long-term maintenance fund. Is the body corporate saving enough? If not you could be hit with huge bills.

You also want to know whether the building is professionally managed. Crockers administers bodies corporate ranging from two units to hundreds of units. Bodies corporate often choose professional companies because the regulations and obligations under the Unit Titles Act are becoming increasingly complex, says Glover.

Make sure you look at the body corporate rules. These tell you what you can and can't do in the building. Glover has seen a case where owners were expected to attend communal barbecues. More often you may find you can't put washing out to dry on balconies. Some bodies have tried to restrict owners from letting their properties via B&B marketing sites.

If you do show interest in buying, your real estate agent should give you the pre-contract disclosure statement to give to your lawyer, says Glover. Even with all of this it's essential to get a lawyer before signing on the dotted line of a sale & purchase agreement, says Glover.

Your law firm will take a number of steps, says Jennifer Edwards, legal executive at Smith and Partners. That starts with assessing what type of body corporate it is and checking the title, plans, Land Information Memorandum (LIM) and council file. Edwards recommends buyers get a building report to identify potential problems.

With a body corporate sale and purchase Edwards always orders the last three years of AGM minutes. This covers what is discussed at those meetings and ensures buyers are fully aware of what they are buying. "You might for example read that three years ago someone mentioned at a meeting that the carpark was starting to flood…or there was a leak in the roof."

This could suggest upcoming expenses the new owner will need to fund if there isn't sufficient savings in the long term maintenance fund. These minutes sometimes highlight potentially leaky buildings as well.

"Depending on the type of building we would check on the earth quake rating as well," says Edwards.

She will also investigate what car parking is included and where visitors will park. This is something that can be discussed with the agent as well, she says.

If the building isn't professionally managed by a third party company Edwards will ask additional questions to ensure there are no issues.

She also recommends buyers who plan to live in the building should find out what percentage of residents are owner-occupiers versus tenants. One scenario for many buyers is that the neighbouring unit is let as holiday accommodation with different people moving in and out every few days.

Sometimes as a result of these, and other investigations, buyers realise they aren't suited to the type of community in the building, says Edwards.

Living in a complex managed by a co-operative can take a lot of pressure off owners. If owners are in dispute with their body corporate there is a dispute resolution service.

Disputes, although rare, may relate to issues such as owners (and their tenants) not following the body corporate rules, disputes between neighbours, unpaid levies and repair and maintenance decisions.

Disputes may be heard by the Tenancy Tribunal, the District Court, or the High Court. The Tenancy Tribunal runs a mediation service, which is less formal than going to court and the result is legally binding and enforceable through the court system.