Unit titles

The new Act clarifies the rights and responsibilities of the unit owners and bodies corporate, and provides for a more efficient management and governance structure. We explain how it works and look at the options for resolving unit title disputes.

Unit titles and bodies corporate

A unit title is a form of multi-unit property ownership. Typically unit title developments are apartment blocks, units, townhouses, office blocks and industrial or retail complexes. Most unit titles are held as residential developments.

A unit title owner owns a defined part of a building such as an apartment or unit and may also have shared ownership in common areas.

Collectively the unit title owners of a development make up the body corporate. This is a management structure designed to ensure decisions affecting the development can be made jointly by the owners.

Powers and duties

The body corporate is responsible for a range of management, financial and administrative functions relating to the common property and to the development as a whole. It has a number of key powers and duties such as:

• Owning and managing common property.
• Establishing and maintaining a long-term maintenance plan.
• Keeping and maintaining a register of all unit owners.
• General meetings of the body corporate.
• Insuring the development.
• Levying contributions on owners to fund the operation of the body corporate.
• Making and enforcing the body corporate operational rules.

Rights and responsibilities

A unit owner has rights under the Unit Titles Act which include:

• Holding a share in the common property proportional to the ownership interest.
• Attending general meetings of the body corporate and having a vote in respect of the unit.
• Having quiet enjoyment of their unit without interruption by other unit owners or occupiers.
• Making (subject to other rules) alterations, additions or improvements within the unit boundary which do not materially affect any other unit or common property.
• A right to the dispute resolution process.
• The right to enforce the body corporate operational rules.

The unit owner also has a number of key responsibilities which include:

• Permitting the body corporate to enter the unit (after receiving reasonable notice) to view its condition, repair common property and ensure the operational rules are being complied with.
• Complying with all laws and legal requirements relating to the use, occupation, or enjoyment of the unit.
• Paying all outgoings required in respect of the unit, including rates, taxes and body corporate levies.
• Repairing and maintaining the unit and keeping it in good order.
• Notifying the body corporate of any intention to carry out additions. Any alterations that will materially affect any other unit or common property must have the written consent of the body corporate.

Operational rules

The body corporate operational rules replaced the old "body corporate rules". They are a set of default rules which can be added to or amended to suit the individual characteristics of a development. All unit owners, occupiers and tenants must comply with the operational rules.

The minimum default rules are as follows.

An owner or occupier of a unit must not:

• Damage or deface the common property.
• Leave rubbish or recycling material on the common property.
• Create noise likely to interfere with the use or enjoyment of the unit title development by other owners or occupiers.
• Park on the common property unless the body corporate has designated it for car parking, or the body corporate consents.
• Interfere with the reasonable use or enjoyment of the common property by other owners or occupiers.

An owner or occupier of a unit must dispose of rubbish hygienically and tidily.

What if I rent the unit to a tenant?
Both the Unit Titles Act and the Residential Tenancies Act apply to a tenant living in a rented unit within a unit title development. The landlord must give the tenant notice in writing of any changes to the body corporate operational rules.

Tenants must follow the body corporate operational rules, but they don't have the right to go to a body corporate meeting. The body corporate should approach the landlord if there is any issue with the tenant.

Meetings and voting

The body corporate must hold meetings at least annually. Unit owners are entitled, as body corporate members, to attend general meetings and exercise a vote in respect of their unit.

Meetings are either annual general meetings or extraordinary general meetings.

A body corporate can call an extraordinary general meeting at any time to consider any matter relating to the unit title development – for example, agreement maybe required to undertake urgent repairs.

Within a meeting the body corporate will discuss issues of joint concern and unit owners will vote on matters affecting the development.

A special resolution is required for decisions made by the body corporate which could have significant consequences for the unit owners – for example, selling part of the common property. For a special resolution to pass, 75 percent of the vote is required.

An ordinary resolution is used for all other decisions made by a body corporate at a general meeting, such as changes to the operational rules. For an ordinary resolution to pass, a majority of the vote is required.

Disputes

The Unit Titles Act sets out a clear dispute resolution process.

• The Tenancy Tribunal can hear and determine all disputes from a range of people in relation to a unit title development. The Tribunal’s jurisdiction can’t be excluded or limited by any agreement between parties.
• The District Court can hear and determine a unit title dispute if the value is more than $50,000 but less than $200,000.
• The High Court can hear and determine a unit title dispute if the value is in excess of $200,000 or the dispute relates to the title of land.

Disclosure obligations

Sellers of unit titles are required to provide information to the buyer at different stages of the sale process. The information includes:

• Whether there are any proceedings pending against the body corporate in any court or tribunal.
• Whether any costs relating to repairs to the unit are unpaid.
• The amount of the contribution levied by the body corporate.
• Details of maintenance the body corporate proposes to carry out in the next year.
• The balance of every fund or bank account operated by the body corporate.
• Whether the unit or the common property is, or has been, the subject of a claim under the Weathertight Homes Resolution Services Act (Leaky homes).
• An explanation of the property ownership, plans and the body corporate operational rules.