Body corporates have to plan for new Act

Last updated 10:55 23/06/2012

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Many of the country's 18,000 body corporates are unprepared for the transition to the new Unit Titles Act which takes effect from October, says Wellington lawyer Alan Henwood.

The law provided for a 15-month transition period for significant changes to the way existing body corporates must operate.

"Many body corporates appear to have taken the line of least resistance in dealing with the transition to the new act," said Henwood, who is a specialist property lawyer.

"Now, with time running out, they need to urgently consider what steps they need to take to comply with the new legislation."

Henwood, who has prepared a guide on the law, said it was badly drafted legislation and a bit of a shambles.

"It is geared up for bigger corporates but what concerns me is that for the little guy complying with the act is all but impossible – you need a law degree to understand it."

He said the new law meant that the rules of unit title body corporates lapsed and could not be readopted by simply passing a resolution.

"In many cases matters covered in existing rules are now embedded in the act and regulations, and those rules may now be inconsistent with the legislation or even unlawful.

"Body corporates are also required to have a long-term maintenance plan [for a period of at least 10 years] covering the maintenance of not only the development's common property but also its building elements and infrastructure.

"While an accompanying long-term maintenance fund is not mandatory, body corporates may well want to consider how to best fund their maintenance plan."

The law also had signifi-cant requirements relating to delegations.

"Many body corporates, if they have considered the matter at all, appear to have adopted a policy of blanket delegation to committees. This may have unintended consequences, and may also result in committees purporting to exercise powers which it may not be appropriate, or may even be unlawful, for them to exercise.

"Given that 1 October is not far away and that most of the transitional steps require a general meeting which takes time to prepare for, body corporates and their advisers need to be planning now for the transition to the new legislation," Henwood said.

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- The Dominion Post

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