MOANA MACKEY (Labour) : I was saying last week that this legislation is very good Labour legislation; it is nice to see it back in the House. It has been a bit of a night for Labour legislation, has it not? We have just dealt with the Financial Service Providers (Pre-Implementation Adjustments) Bill—

Hon Clayton Cosgrove: Shouldn’t it be referred to Judith Collins?

MOANA MACKEY: That is a very good question. We have this Unit Titles Bill; here we are, 15 months into this new Government, and we are continuing to pass Labour legislation.

Hon Darren Hughes: It’s time for a change.

MOANA MACKEY: That is right. I hope that Minister Simon Power acknowledged Lianne Dalziel’s work on the financial adviser bill.

Hon Darren Hughes: He did tonight.

MOANA MACKEY: I have been told that he did tonight. I wish Phil Heatley had acknowledged the role that Labour had had in doing all the work on the Unit Titles Bill before he picked it up, put it in the House, and sent it to the Social Services Committee. I often refer to Minister Phil Heatley as a bit like a cuckoo bird; the cuckoo bird is one of those birds—

Chris Auchinvole: Oh, that’s not very nice!

MOANA MACKEY: —no, no, hear me out—that jumps into other birds’ nests. The cuckoo bird lets another bird do all the work—build the nest—and then jumps in and claims credit for it. The Minister of Housing, Phil Heatley, is a little bit like that, in that he never acknowledges that he has done none of the work on the legislation he is putting through this House. I have to ask what he has actually done in his 15 months as Minister of Housing, apart from progress Labour legislation. But the least he could do was acknowledge the fact that he had nothing to do with the Unit Titles Bill; all the work was done by the previous Government, and all the drafting was done by the previous Government. All he had to do was come down to the House and give a speech written for him by his officials, which he did, and he did very well. He read his speech very well. But I thought he could have perhaps just mentioned, in passing, that it was the previous Government that had done all the work on that legislation. Of course, Labour will be supporting this very important legislation.

The other thing the Minister said last week was that this bill was so important that it had to be progressed through the House in haste, which begs the question why, when this bill was reported back from the select committee in September last year, has it languished on the Order Paper until now? If it is that important—

Chris Auchinvole: Because we have had very important legislation.

MOANA MACKEY: Well, Mr Auchinvole, who has once again completely missed the point of what I was saying, says that it is because it is incredibly important legislation. My question asked why it was not progressed through the House ahead of some of the useless legislation that we passed under urgency prior to Christmas. This bill could have been passed prior to Christmas if it were so important. It is important, which begs the question: where, oh where, is the Residential Tenancies Amendment Bill? I ask where that has gone, because that is other legislation, along with the Unit Titles Bill, that Labour drafted and did all the work on. Yet Minister Phil Heatley has jumped in and said: “Mine! I did all the work; I take all the credit”.

Hon Member: Again.

MOANA MACKEY: Again—that is right. The Residential Tenancies Amendment Bill was brought into the House and was sent to the select committee; the Minister was going to progress it with the utmost haste because it was incredibly important. But it has disappeared. It, too, was reported back from the select committee last year, but it has not gone anywhere. That bill is particularly important, because it extends the protections of tenancy law to boarding-house tenants. We have heard of boarding-house tenants who were asked to shift out of their accommodation over Christmas so that other people could move in for the Rugby Sevens, and if those tenants had had the protection of the law under the Residential Tenancies Amendment Bill, that would not have happened. It is nice to see the Unit Titles Bill back in the House, but we ask where the Residential Tenancies Amendment Bill is, which this Government promised to progress.

The Unit Titles Bill is very important, and I want to say how much I enjoyed working on it in the select committee. At first glance the bill is incredibly technical; it is the kind of thing that is plonked down in front of us and we think: “Oh, no, this is really going to make our heads spin.” It is incredibly important legislation, and it is long overdue for an overhaul. As the Minister said in his speech, and as I absolutely concur, the law that is currently in place was drafted at a time when we probably did not envisage the range of developments that fall into this category, or the significant number of people who will be affected by it. It is estimated that within 50 years, 500,000 people in Auckland will be living in this kind of accommodation. For that reason it is incredibly important that the legislation be brought into the 21st century; it should have been brought even into the latter part of the 20th century.

We have dealt with even simple things—things that we see coming through our offices and that clarify what most people would think were self-evident. For example, there have been stoushes over whether only the people who live in the top apartments should pay for repairs to the roof of a building, despite the fact that everyone benefits from having a roof on the development. When we heard those kinds of things coming to the select committee it was almost hard to believe that they had never been clarified before. We have clarified that issue: where there is common property, such as a roof, then it is the domain of all the residents to pay for the upkeep of that, not simply the people who are in those top apartments. That seems simple and like real common sense, but I am really pleased that it has now been clarified in legislation.

The other thing, which probably was not envisioned at the time the previous law was written, was multi-stage developments. It is really, really important to make clear exactly what rights the people who hold a unit title have in a multi-stage development, where the next stage may change significantly from what they expected it to be when they purchased their unit title. We have made clarifications on that in this legislation.

We have introduced a lot more transparency in terms of the financials and the running of the body corporate. Bodies corporate are not cheap. One of the things that a lot of people might find difficult—and we have a lot of retired people who move into these unit title developments—is when they suddenly get whacked with a really big bill. They have been going along and they have been paying their body corporate fee; they are able to do that and they can budget for it. Then suddenly something needs to be repaired—the lift needs to be put back in, or the roof needs to be completely replaced—so all the members of that body corporate get a large bill. For some people, particularly for those on fixed incomes, it is really difficult to come up with the money at short notice. We wanted to set in place management plans and maintenance plans so that these things will have to be planned for. The body corporate will hold the money in reserve so that the immediate impact will be lessened. But during the course of the select committee process we also accepted that bodies corporate did not need to have incredibly large reserves all the time, because that in itself might be difficult for some people to maintain. I am really pleased that the select committee was able to take a common-sense approach to that issue, as well, and to introduce flexibility in that provision.

I have also been made aware tonight that although I thought we had fixed the issues about retirement villages, and made sure that we had clarified the requirements where there was overlapping under their own legislation, the Retirement Villages Act, and this legislation, that is not so. I understand that the Retirement Villages Association of New Zealand has been in touch with the Minister; perhaps we did not get it quite right. A Supplementary Order Paper will be introduced to the House just to clarify that we are not trying to put two entirely different laws, which require different things, on to the same people. Labour will want to examine that Supplementary Order Paper. Certainly, it is our intent that we want to support whatever we can to clarify that we did not intend to duplicate the compliance requirements on retirement villages.

This is important legislation. I think the select committee did a very good job in making sure that what came out the other end incorporated the common sense that we had heard from submitters in the select committee. I thank the officials for this legislation; they were very easy to work with. They were able to explain very technical things in very simple language, and they were able to take the concerns that were raised by submitters and put them through to amendments. I acknowledge the Hon Shane Jones, who is in the House, for all the work that he did in developing this incredibly important legislation. It is nice to still have a little bit of the Labour Government coming through 15 months later. I wonder when National is going to start to do some of its own legislation in housing, and stop doing ours.

CHESTER BORROWS (National—Whanganui) : Thank you, Mr Deputy Speaker, for interrupting the previous speaker, Moana Mackey.

I must admit that it is refreshing to have the opportunity to partake in a debate on a bill that has bipartisan support, and at the end of a process that has been very bipartisan in nature. The members of the Social Services Committee enjoyed interacting with the submitters, who educated us, who debated with us, and who had a full discussion with us all in respect of the Unit Titles Bill.

The purpose of the bill is to clarify the title and survey processes; improve the governance structures for unit title developments, including the rights and responsibilities of unit owners, and the powers and duties of bodies corporate; establish a flexible and responsive management and maintenance regime for unit title developments; improve the information disclosure regime for prospective and actual unit owners; and establish a dispute resolution mechanism within existing set-ups.

The point made by the previous speaker that no one can disagree with is that when empowering legislation for unit title type of premises first came about, their popularity was never envisaged, and the scale at which they would take off was never envisaged. The legislation was made for small numbers of units, maybe fewer than 10, on a single title of land, and how they might operate. As huge apartment blocks and other great big developments came about, the owners were frequently at the whim of the developers, then, later on, at the whim of the people who were running—or in some cases manipulating—the bodies corporate. Money was not set aside for routine maintenance, for instance, so every now and then a big lump sum was required. Some of the elderly owners’ savings had dribbled away, so they were not able to contribute in the way that they needed to. It put them under pressure; it put all the owners under pressure.

A number of these issues were raised with the committee, which responded to them. There were issues about long-term maintenance regimes. The cost of having to provide a fund, rather than just a plan for long-term maintenance, was raised. The committee recommended an amendment that allows bodies corporate to opt out of establishing a long-term maintenance fund, and to retain the requirement for a mandatory long-term maintenance plan. There were problems with the auditing and monitoring of body corporate funds, and changes were made in respect of them. Various changes raised by the submitters were addressed by the committee. We recommended that changes be made to the bill to make it more palatable to owners who live in these circumstances, and to give owners, especially those who come in early to a large-scale development or a staged development, some certainty about where the development would go, and some certainty that their interests would be protected into the future.

As I said, it was good to be part of the process. The work was initially kicked off by the Labour Government, it was completed under the National Government, and it was debated well by all the members of the committee. The committee appreciated the well-thought-out and well-prepared submissions from those who engaged with the committee. I am sure that the legislation we have now will be enduring. I thank the members of the committee for their interaction, for the engagement we had with one another, and for the legislation that we ended up with. I commend the bill to the House.

Hon SHANE JONES (Labour) : Kia ora anō tātou. As befits the speakers on this side of the House, devoid of any extravagant claims of vanity, we say with some modesty that the Unit Titles Bill is the work of both sides of the House. We are debating it at a time when there is a lot of unfinished business in the leaky homes area. Some of the most celebrated pieces of litigation flowing from the leaky homes drama pertain to the occupants who live within property covered by unit title. There have been large bouts of litigation far beyond the High Court. There have been cases where people with corporate management responsibilities have not been either objective or respectful of the rights of minority interests. In addition to that, there have been minority interests that have tried to hold to ransom a majority of people as they have sought to correct the building defects that leave them living in aquariums. It is important in this context that we provide that kind of background to this bill.

This bill seeks to upgrade the legal infrastructure around that type of property right. It is given a larger sense of urgency because of the very cruel developments that have happened to people once they had occupied those properties and found that they have not been professionally made, or that the materials that were provided by the manufactures—who have largely got off scot-free—have not stood the test of time. The important thing about this bill is that it actually improves the legal definition of the extent of the property rights that individual owners have within those apartment complexes, and the obligations and duties on the corporate managers. Levels of disclosure have been improved. That will assist people who have found it impossible to establish whether the fees that they have paid are being dedicated towards maintaining the key capital components of the complex. Whilst I was the Minister for Building and Construction for a short time, I heard no end of tales of woe in that regard.

Let me focus on Auckland, or Tāmaki-makau-rau—super-city considerations aside. There is an ongoing challenge as to how we, in Auckland, enlarge the supply of residential housing stock. There is essentially a statutory ring around Auckland, maintained through the planning regime, which makes it exceedingly difficult for residential property development to take place. It always seemed to me, when we were working on this bill, that an improved set of duties, obligations, and rights and an enhanced infrastructure dealing with those types of apartment complexes may improve the prospects of an enlarged supply of residential units going up—and not necessarily out. In my view, that is a major cause of the problem of the affordability of property in our largest city, although—and no doubt the current Minister would agree—that is not the primary focus of the bill. As the confidence of investors in, and occupants of, those properties grows, and as people’s confidence to live in those types of apartment complexes grows, then capital and developers, I am sure, will be attracted to providing them as a housing option. The situation in relation to Auckland housing at the moment is essentially unsustainable. We have a geometric level of growth in terms of domestic migration. People are going to Auckland; they are not going to the winterless north or the deep south. A few get lost in the verdant pastures of Waikato and Matamata, surrounded by racehorses and other such things. But the deeper problem is for the families of international migrants and domestic migrants, and I think we ought not overlook that.

In respect of transparency, and the quality and quantity of information made available, this bill empowers owners. It clearly provides a process whereby owners have a complaints avenue, and they are able to hold accountable the actual statutory agents, who have not only a fiduciary responsibility, but also, now, an actual legal obligation. That level of disclosure was, in a sense, debated in relation to the bill that has just had its first reading, the Financial Service Providers (Pre-Implementation Adjustments) Bill, in respect of financial literacy, financial stewardship, etc. When people feel that their access to information is blocked—which has been the case in many of those apartment complexes—and they do not know where to turn, the first thing they do is incur unnecessarily large amounts of legal cost. Lawyers from all across the spectrum did say to us—of course, they will never agree but that is the nature of the law; it is an adversarial beast—

Hon Christopher Finlayson: Don’t be so discourteous!

Hon SHANE JONES: Well, there are a few exceptions. The current Attorney-General is seeking to find common ground, but an injudicious answer that he made last week to a very sensible question has begun to cause doubts to sprout in our minds. However, we will overlook that small lapse of standards by the Attorney-General.

I will come back to the quality of information. Where the information disclosure regime contained in this bill is maintained, it will enhance confidence. People will not be required to incur unnecessarily large bills, and they will be empowered. That is a transition away from the average, garden-variety Kiwi experience of those fortunate enough to own a home on something akin to a quarter acre section. Here, one has shared space and a shared obligation to maintain the key features of the apartment complex, and one trusts the agents who are the corporate managers. Some of them may be associated with the original developers, and they may set up an adjunct company to maintain an ongoing managerial role, if indeed they have not been able to sell all the units that they have developed. That, in itself, I was told, caused doubt and disquiet, because it took them a long time to correct small issues such as lift wells, parking, or the general deterioration of the complex. Let us not overlook the power and the disinfectant-like quality of disclosure and very good information.

Unfortunately, there will be conflict, as I said earlier—lawyers are involved. The jurisdiction of the Tenancy Tribunal is made a lot more lucid. Unfortunately, we will see many of those disputes, it would appear, if the managers continue with their shoddy practices of not being responsive to people. The residents living in those complexes are often in their twilight years, and managers should be responsive to their queries and anxieties. Often the apartment is a key asset that residents have after a lifetime of work scrabbling around and maintaining a small nest egg that has not been consumed by Mr Brierley and others. Those legal avenues will be very important.

The key point I would like to leave members with is that we enjoyed contributing to this bill. It is a prolix and complex area of law, and the bill gives a greater level of clarity to duties and rights in law for that type of property. It will expand the opportunities for people to, hopefully, enlarge the supply of housing in our key metropolitan area of Auckland. I support the bill. Kia ora tātou.

TIM MACINDOE (National—Hamilton West) : I am pleased to take a short call on the second reading of the Unit Titles Bill. It is good, some might even say providential, to follow the self-proclaimed model of modesty who is the previous Minister for Building and Construction. I am pleased to acknowledge that this bill, as he and other speakers have mentioned, has attracted widespread support throughout the industry. It is important. Many are affected.

In the middle of last year, when the members of the Social Services Committee were working on this bill and hearing the submitters, both here in Wellington and up in Auckland, there were an estimated 17,908 unit title developments in New Zealand, comprising 119,287 units. What is very, very clear is that high-density living is becoming more popular here, as it is around the world. That trend will continue. Indeed, it is expected that in Auckland alone 500,000 people will be living in multi-unit developments within the next 50 years.

I was intrigued a little earlier to hear Moana Mackey begin her speech by taunting this Government that it is passing yet another Labour bill, 15 months after the change of Government. [Interruption] As my good colleague Mrs Adams has just pointed out, Labour had 9 years in which to do so, and I am astonished, therefore, that Ms Mackey wants to draw attention yet again to that fact. I have said it before and I will say it again: I am absolutely gobsmacked at how comprehensively the previous Government lost control of its own legislative agenda. Thank goodness there was a change of Government, because otherwise the poor owners of the unit title developments would still be waiting for this bill in another 20 years’ time. Nevertheless, I do not want to be too controversial, because there is a wide degree of unanimity here tonight, and that is a good thing. The Unit Titles Bill is an important bill that modernises a very big area of law. I, too, acknowledge Ministers, past and present, and the select committee members for their work on this bill.

The purpose of the bill is to provide a legal framework for the ownership and management of multi-unit developments by communities of individual owners, and, in particular, to allow for the subdivision of land into units that can be individually and separately owned and common property that is commonly owned; to create bodies corporate that comprise all unit owners and are responsible for operating and managing unit title developments; to establish a flexible and responsive regime for the governance of unit title developments; and to protect the integrity of the development as a whole.

We heard, and we have heard again tonight, that a large number of problems exist that make this a very important measure. These include issues with joint decision-making, building maintenance, financial management, governance of developments, information disclosure, consumer protection, dispute resolution, and so forth. They are all addressed in this bill. We have made very good progress. I am delighted that the House is of a mind to push it ahead. We need to get on with it. I commend the bill to the House.

TODD McCLAY (National—Rotorua) : It gives me pleasure to stand and speak on the Unit Titles Bill. Indeed, the Social Services Committee spent some time dealing with it last year. We received extremely interesting submissions from a wide range of submitters who covered a wide range of views.

I want to touch on a couple of important points that came out of the submission process, but I think it is important that we first dispel a couple of myths that came from speakers opposite earlier in the debate. This bill was first proposed by the previous Government, and it deals with a very important issue. Unit title developments can be extremely complex and very difficult for people to manage once they are owners, and it can be very difficult for people to obtain good information before they purchase such an apartment. However, members opposite have said that the bill is their bill. Well, I guarantee that when the bill enters into law, it will not be their bill any more. They had their opportunity, but they did not take the time to have the bill go through in the last Parliament. Therefore, it becomes our bill. The draft that was on the table has been significantly improved.

There are a couple of issues I want to briefly touch on. One issue is the disclosure and provision of information to people when they buy into a unit title development. We heard from submitters who were concerned that when they had bought off the plan, before a development had been produced, they had not been provided with all of the information that they believed they needed to understand what they were legally entering into. We heard submissions about problems that people had had once they had purchased a unit. One man said to the select committee that had he realised before he purchased that all of the costs for that development, in so far as electricity was concerned, had been loaded on to his unit, he probably would not have purchased it. The committee took a position on that and put in place measures whereby full disclosure to a prospective purchaser is necessary before the act of sale goes through. In the case that the information is not provided to purchasers, they have the ability under the law to cancel that sale. I think that is important.

The committee spoke at great length about, and considered the issue of, maintenance. There was a view that a mandatory regime for maintenance of the communal areas of a property was necessary. A number of submitters said that they had different arrangements for their properties, and that those arrangements were working for them. The committee recommends amending the bill to allow bodies corporate to opt out of establishing long-term maintenance funds, but they must retain a requirement for a mandatory long-term maintenance plan. We heard that many bodies corporate have a longer-term view—once the owners are involved—of how they must maintain the communal areas of their properties.

The issue of time-share developments came up. The bill as originally drafted would have included time-share developments, but given the wide range and largenumber of owners of a time-share resort, making decisions would have been extremely difficult. I make particular reference to the member of Parliament for Taupō, Louise Upston; a number of her constituents who are time-share owners told her that this law may not work for them. Louise made a very strong case to a number of the members of the committee, and a very good solution was found for those constituents.

It is important that this bill enters into force quickly. I fully support the bill and I commend it to the House. Thank you.

PHIL TWYFORD (Labour) : I rise to support the Unit Titles Bill at its second reading. As with so many bills that have been passed over the last year in this House, this bill is fundamentally the work of the Labour Government. What an easy life this Government would have had over the last 12 months, had the fifth Labour Government not left it a considerable number of bills in the pipeline. I recognise the excellent work of my colleagues Lianne Dalziel and Shane Jones, who has already been credited tonight as the former Minister for Building and Construction. We are not petty and we are not mean-spirited. We recognise and acknowledge the work of the Minister of Housing, Phil Heatley, and the Social Services Committee in bringing the bill to this stage.

As my colleagues have already said, this bill repeals and replaces the Unit Titles Act 1972. The last 37 years have not been kind to that Act and it is high time the Act was overhauled. We need a modern legal framework for the joint ownership of land, buildings, and facilities. Times have changed. The free-standing bungalow on a quarter acre section is no longer the only option for the aspiring Kiwi homeowner or the humble resident. Growing numbers of New Zealanders, especially those living in Auckland, choose a more urban lifestyle and choose to live in flats, apartments, and townhouses. Sometimes those options are the only affordable route on offer for someone wanting to get into the property market. The bigger picture, as mentioned by my colleague Shane Jones, is that Auckland in particular, but also other New Zealand cities, must embrace high-density living if we are to stop the endless sprawl of our cities, if we are to accommodate a growing population, and if we are to build cities that are both livable and sustainable. This bill updates the Unit Titles Act. It is an important step towards encouraging and supporting apartment and townhouse living.

Shane Jones set out some of the background to this bill, in particular in relation to the leaky homes situation. One of the things that has really exacerbated the hard time that many apartment owners have faced when they have had leaky or rotting homes is the outdated governance structures, rules, and regulations surrounding multi-title buildings. There are scenarios of minorities within bodies corporate holding back action that is needed to remedy structural problems and weathertightness problems, and there are scenarios of majorities overriding the legitimate interests of the minority. In the latter case, members of the public have approached me in terrible states of distress to seek help with completely unsatisfactory situations within the body corporate, unable to get timely and fair redress for their problems. It has to be said that many bodies corporate are not taking responsibility for maintaining, in a proper and timely way, their capital assets.

I want to provide a brief overview of what the bill sets out to do. It clarifies how land is surveyed to provide a clear legal framework for ownership by different parties, simple and clear processes for building unit title developments, and technical details that are essential for developers, surveyors, and territorial authorities. It takes a holistic approach to the management and maintenance of unit title developments, clarifying the responsibilities of owners and the body corporate. It sets out some much-needed minimum standards for the sound management of unit title developments. It sets out a clear and flexible governance structure, with reduced voting thresholds down to 75 percent in order to make decision making more easily managed and to prevent minorities getting in the way of actions that the majority of title holders want to go ahead with.

Speakers before me have talked about the disclosure regime and how important it is so that unit owners, bodies corporate, and prospective buyers have good, accurate, and comprehensive information to allow them to make informed decisions before they sign on the dotted line. There is a cost-effective dispute resolution service so that anyone who is embroiled in a scrap can get justice by going, in a cost-effective way, to Dispute Resolution Services.

I want to touch briefly on some of those things in a little bit more detail. Bodies corporate will be required to develop long-term maintenance plans to protect the capital value of the development and the capital value of the units owned by the individual owners. This means that owners will not be ambushed with big-ticket maintenance items, like the replacement of a roof, or, in the case of leaky buildings and weather-tightness problems, huge structural repairs, which has not been uncommon in Auckland in recent times. The body corporate has to be able to act quickly and decisively on behalf of all unit owners for the good of the development as a whole when repairs need to be done.

The bill provides that the body corporate will own the common property, which includes all the parts of the development that are owned collectively. The body corporate is then responsible for doing repairs and maintenance. That means that if an apartment block has a leaky roof, it is not just the owners of apartments on the top floor who are immediately affected by it who are responsible for making those repairs; the entire body corporate will be responsible. The second major change will make joint decision-making much more manageable.

I have already mentioned that there is, I think, a good balanced regime that empowers a strong majority of three-quarters to go ahead and get things done, but a minority always has recourse to Dispute Resolution Services if they feel they have not been dealt with in a just and reasonable way. Many disputes in the unit titles developments are created because people do not know their rights or are unfamiliar with the rules of the road or of the game. Owning and living in an apartment requires a much more detailed understanding of the rules and the regulations than any owner of a free-standing bungalow on a quarter acre section has ever had to contemplate. That is a cultural shift that we need to go through, particularly in our larger cities as people live in these new environments. This bill is incredibly useful in clarifying and simplifying the rights and obligations of title owners and, in fact, the body corporate. So that will be a really useful step towards minimising the number of disputes that arise in the first place.

The fourth key change is around disclosure. Educating consumers is an important part of this bill—enabling people to make informed and confident decisions.

I did not serve on the Social Services Committee that considered this matter, but there were a raft of detailed and technical issues that were presented to the select committee. I want to follow on from the comments of my colleague Moana Mackey on the concerns that the Retirement Villages Association of New Zealand raised in relation to the bill. I acknowledge that the select committee has reported back the bill with a large number of clauses to be amended. The Retirement Villages Association argued that it is already covered by quite an extensive accountability and regulatory regime under its legislation, the Retirement Villages Act 2003. The association says the Act provides a good level of protection for residents. The concern it has is that this bill overlays an additional layer of regulation that duplicates many of the things that it already has to deal with and would create a very, and unnecessary, complex and costly environment. Its concerns have been largely dealt with, but I understand that the association has written to the Minister pointing out that there are still a number of clauses where this problem has not been alleviated, in particular clauses 67, 68, 69, and 71.

KATRINA SHANKS (National) : It is my pleasure to take a call on the second reading of the Unit Titles Bill tonight. I thank the officials for all the hard work they have put into the bill. It is quite complex and a lot of submitters raised some very valid points. We made significant changes to the bill in the select committee process. I thank the officials for their work. They articulated to us on paper how we could implement those changes, so I thank them for their hard work.

National went into the election on a platform to streamline and simplify regulations. This Government keeps its word and delivers on its promise. We are doing things differently. This bill represents how well we are doing things differently. Labour first looked at this legislation in November 2004, which was 6 years ago. We have been in Government for just over a year and we have already progressed this bill to its second reading.

H V Ross Robertson: We did all the prep work for you.

KATRINA SHANKS: Labour might have done all the preparation, but it took Labour 4 years to do it. It should not have taken 4 years, and even Moana Mackey, the former MP for Gisborne, got up and said that this bill was well overdue. The previous Labour Government was in slow mode and this National Government is in fast mode. We deliver. That is what we are here to do, and that is what members see when legislation goes through the House.

The Unit Titles Act 1972 was designed for small flats and townhouses. As New Zealand society has developed, complexes have become much bigger, and there has been much more staged development and multi-level development. It has become very, very complex. In fact, in 2007 there were 16,500 developments and 95,000 units. So this legislation affects a lot of unit owners in New Zealand. Not only that; it is estimated that 50 years from now 500,000 people—half a million people—will live in units in New Zealand, and that is a quite significant number. It is important that we address this matter now. This bill will provide a broader and more adaptable way of setting up and managing multi-unit living.

I am taking only a short call on this matter today. It has been my pleasure to stand here to support this bill, and I look forward to the Committee stage. Thank you.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : Rather than get into the sort of “who did what to whom” exchange that we have had for most of the night, I think members on both sides of the House would probably agree that the Unit Titles Bill is good and necessary legislation that will provide a high degree of consumer protection. It is akin, I suppose, to the old Real Estate Agents Act, which was an Act that was way out of date and needed modernisation. The House generally came to the party to bring it into the 21st century. I will make just one comment, if I may, that is slightly off the bill but pertains to the dissertation of Katrina Shanks, the previous speaker, and it is this. It was Ms Shanks who said that this Government keeps its word. I would just say to her that that may be so on some things, but not with GST.

Moving back to the bill, if we look at this legislation—when I was building and construction Minister I had a hand in this bill, as did Mr Jones, and latterly Mr Heatley has seen it through—I recall that a major problem was the requirement for bodies corporate to agree in unanimity to basically get anything major, or even minor, done. This bill corrects that, as there now needs to be only a 75 percent majority. I recall that the objective for that part of the legislation was to stop some of the examples of what are known colloquially as hold-outs, where, in many cases, maintenance had to be done on a unit title of, it could be, 10 units or 50 units, and one person would not agree. This was very prevalent in leaky buildings.

I recall one case where the whole series of unit titles had agreed apart from one gentleman who resided in Spain, I think. He rented his unit, so the story went, and decided that he would not pay or participate in anything or put up any money as a contribution to remedy the situation. That block of flats or apartments in Auckland, I think, was stymied. The residents could not do anything. Every unit title owner apart from one had agreed and it was self-evident. Nobody disagreed. Maintenance and construction work needed to be done to remedy a leaky building situation, and I think the residents were then going to proceed to court but they wanted to get that fixed. One particular unit title owner, a Kiwi who resided overseas, just said he was not interested, that he would not cough up, and that he would not vote in favour, because that would have been a binding resolution; he would have been forced to make a—from memory, I think relatively small—contribution to the overall maintenance fund. Certainly some years ago, which is when I recall the case occurring, those people were effectively left languishing and could not effect a repair, or advance the protection of that block of flats. The so-called leaky building syndrome was not anticipated in respect of the Act of 1972, because we did not have it then.

Leading on from that, one of the impressive things about the protection the legislation will provide is the need for the establishment of long-term maintenance plans to protect the long-term value of the development. That, on the surface, may again seem self-evident and we may ask why we would we not want to do that, but again there were cases of hold-outs where unanimity was required. In many cases, in smaller unit titles, there was a lack in the skills base of owners, or there was a lack of resource, because of the body corporate fees, to be able to gain the advice and skills necessary to advise on maintenance plans, so things just slipped. The problem with the roof that may have needed some maintenance slipped to the point where each of the owners was required to dole out a large lump of money to remedy a major problem.

This was difficult for those who were purchasing, because there was no requirement for disclosure. One of the other pieces of excellent work in this legislation is the requirement for disclosure, both in financial terms and in terms of things like the body corporate minutes, so that a potential buyer can go in and examine those documents. A body corporate’s minutes can be very revealing in terms of the history of the building and its value, and in terms of whether there have been any structural or maintenance problems with it. They can be very revealing to a potential buyer. Before this legislation is passed, if the body corporate wishes to, it can block access to those documents. Currently, one has to get the body corporate’s permission to inspect those documents.

This bill reminds me, as I said, of the real estate agents legislation. It is good, solid consumer protection legislation. There is an argument that everybody should be responsible for himself or herself, and that is predicated on the myth that we all have the skills to analyse these situations and to know which questions to ask to gain the information we need. The truth is, and I include myself in this, that many, many Kiwis do not have a monopoly on knowledge. They do not have the skills, they do not know the right questions to ask. They are good-natured people of good faith, but they get sucked in by sharks. Of course, they are ultimately responsible for their decisions, but we need legislation, simple rules, to provide those consumer protections and to force the disclosure of vital information.

In the ordinary course of business, I would argue that most bodies corporate—good-natured as they are, appropriate as they are—would avail a prospective buyer of that information anyway. However, the sad thing about the legislative process in this House is that we tend not to pass legislation for the 99 percent of people who will obey the law, whether or not it exists. Sadly, we have to deal with the lowest common denominator and have to protect people from the 1 percent, or 0.1 percent, of folks who are hell-bent on ripping off good folk.

So there are disclosure provisions in this bill, as I have said. Equally, there is the ability in this legislation for disputes to be dealt with through mediation and adjudication in the Tenancy Tribunal in the first instance, rather than disputes being solely rushed off to the courts. Therefore, I would argue that this makes resolution faster and cheaper. Again, if we focus on the leaky building scene, courts are often an option for very, very large bodies corporate, with a large budget because so many members contribute to it. Often the larger ones, as they are today, of course, will proceed directly to our court system to gain a judgment. They have the resources to do that, and they have those resources because of their numbers and their body corporate fees to be able to gain the experts they need. However, if it is a body corporate of, say, 10 members or even 20, it will not have that ballast, that financial capital, and that capacity to wander off into a court and get justice in, perhaps, a swift fashion, but one that will cost a bucket load of money.

Often disputes begin as minor disputes and fester. I am sure that constituent MPs on both sides of the House have dealt with many, many such cases. They can fester into large legal disputes and arguments if not dealt with. The legislation will provide for mediation and adjudication, a modern form of dispute resolution in this day and age, and an alternative to the courts. It is not to usurp the courts but is an alternative. I think it will provide for smaller bodies corporate especially to be able to resolve disputes cheaply, efficiently, and swiftly. That is a major problem that we have. So I support this legislation.

My colleague Shane Jones noted with some pride that the legislation will also bring the infrastructure into the 21st century. Of course with this legislation we will now have computer registers. Where land is subdivided to create the unit title development, there will be the creation of a computer register where the principal unit is subdivided to create a subsidiary unit title development. Again it is an attempt to cut down red tape and to use technology to have swifter and more efficient outcomes.

In summary, despite the “who did what to whom and where, and who takes the credit for what”, we on this side think that tonight is one of those times when people will look at this Chamber and perhaps agree that a bit of bipartisanship is always appropriate, especially when it comes to consumer protection. At the end of the day, one’s unit title, just like one’s freehold property or stand-alone house, is probably the biggest asset that Kiwis will have in their lives. It is one where, especially with a unit title where there is common property, the risks are different and are often greater than those associated with a stand-alone house. I think this bill will provide protection and I endorse it.

• Bill read a second time.