Hon PHIL HEATLEY (Minister of Housing)
: I move,
That the Unit Titles Bill be now read a second time. The Unit Titles Bill received its first reading on 5 March 2009. It will repeal and replace the Unit Titles Act 1972, which is the primary legislation governing multi-unit developments such as apartment blocks, town houses, and office buildings. It was referred to and considered by the Social Services Committee, which received 101 written submissions and heard 36 oral submissions. Overall, there was widespread support for the changes, especially for those parts of the bill that increase disclosure for buyers and bodies corporate, and those parts that provide cost-effective, appropriate, and timely access to dispute resolution services. Submitters have written to the Social Services Committee and to me as the Minister responsible for the bill stating that new, updated unit-titles legislation cannot come soon enough.
I point out by way of background that the Unit Titles Act 1972 was designed for the simple, small-scale residential flats that were prevalent at the time. Often such developments would number only two or three units, but times have changed. Also, there are now almost 120,000 properties on unit title tenure in New Zealand. The trend is expected to continue and accelerate, particularly in the Auckland region, where it is estimated that within 50 years half a million people will be living in apartments, town houses, and high-rise buildings.
The current Act’s inadequacy in the modern environment, where some developments contain more than 100 units, means, among other things, that buildings can be insufficiently maintained, that bodies corporate can be hampered by time-consuming decision-making processes, that disputes between owners are seldom resolved, and that there is little consumer information or, in fact, protection. Furthermore, the process for building developments can be inflexible and overly complex.
The Social Services Committee reported back on September 2009 with several key changes to improve the bill. These changes were made in response to concerns from submitters that some provisions were overly prescriptive or onerous. I am very happy with the decisions made by the committee, and I would like to communicate that. I support the committee’s recommendations wholeheartedly, and I will go on to explain the merits of some of the recommendations made.
An example of the select committee’s common-sense approach is a recommendation that the definition of “principal unit” be changed to explicitly allow for the creation of car-parks under title. This change follows views expressed by submitters that car-parks should be able to be traded independently. The proposed change to the definition of “principal unit” is an excellent one, especially when one considers the number of car-parking spaces that are currently in the central city and urban areas.
I also draw members’ attention to changes made in the long-term maintenance regime. When the bill was introduced it had robust and future-focused provisions mandating that bodies corporate prepare in advance for repairs and maintenance. However, submissions demonstrated divergent opinions over the benefits of a mandatory long-term maintenance regime. Whereas some strongly supported the mandatory regime, other people were keen to see an amendment to allow bodies corporate to decide to opt out, reducing their compliance costs. Notably, no submissions objected to the concept of a body corporate planning in advance for maintenance and repair. The Social Services Committee has taken what I consider to be a balanced approach, retaining the mandatory requirement for the long-term maintenance plan but providing an opt-out clause for the long-term maintenance fund.
I have said before that I am a supporter of measures that reduce regulatory burden and red tape. My final point explains how the committee has done this with the bill. Committee members have been over the financial monitoring and reporting provisions with a fine-tooth comb, and this is commendable when one considers that a body corporate account sometimes involves millions of dollars. In particular, the committee has had to grapple with the difficult question of how much financial monitoring is too much. Indeed, in the light of submissions the committee has gone as far as making the financial monitoring options optional, which means there is more choice for the body corporate to decide how much scrutiny of financial affairs needs to be undertaken.
While I am on the subject, I would like to advise the House that there are some technical aspects that, I believe, can be more clearly drafted. I am currently considering whether a Supplementary Order Paper will be necessary at the Committee stage to address these matters. I assure members that the amendments will be technical rather than policy-driven in nature.
In summary, I am pleased to see the strong support and public interest in the Unit Titles Bill. In respect of the new dispute resolution process, I am pleased to see a requirement for increased disclosure, reduced voting thresholds, and clarification that the issues of rights and responsibilities have been addressed.
Clearly this bill has hit the nail on the head regarding public opinion. Indeed, public opinion is that the bill must proceed with haste. My office is full of letters from members of the public who are keen to see this bill become law, and I am certain that select committee members can relate to that, as submitters were enthusiastic that something should happen sooner rather than later.
There are thousands of unit owners, body corporate managers, surveyors, and legal professionals across the country waiting, like Patience on a monument, for these measures to be passed by this Parliament. The measures are sensible. They strike an optimal regulatory balance. They are both needed and wanted, and I direct Opposition members to read my speech if they missed that.
This bill brings our unit title law into the 21st century. It addresses the massive changes that have occurred in our built environment since 1972. I thank the select committee and all those who took the time to submit in order to help create an efficient, effective, sustainable bill that is relevant to the needs of modern-day New Zealanders.
