The common good – unit titles


BUYING a property that shares common areas with others is becoming increasingly prevalent in New Zealand.

These properties can be apartments, townhouses, units, retirement properties or any other dwellings that share common private access and utilities. When you buy into a property like these, you have different rights and responsibilities to someone who is buying a stand-alone property on its own separate parcel of land.

This kind of property ownership in a building development where there are multiple owners is known as a unit title. It allows individual ownership of parts of a single building, or of separate buildings within one complex.

Each unit title is made up of three parts: ownership of your particular apartment or unit and any accessory units, like garages, private courtyards and storage areas; an undivided share of the ownership of the common property (lifts, laundries, lobby areas, gardens); and an undivided share of the ownership of the units if the unit plan is cancelled.

“When you’re considering buying into a complex where there are multiple owners, there are some important additions to the usual due diligence to-do list,” Real Estate Agents Authority (REAA) chief executive Kevin Lampen-Smith said.

“A title search will help you find out all the facts about the property’s ownership, boundary and access, as held by Land Information New Zealand (LINZ). Remember to look out for easements or covenants that may differ from your understanding of the property, such as rules about who can live in it, car parking and access.”

A Land Information Memorandum (LIM) will also show you information held by the local council about the property and land.

Mr Lampen-Smith suggests getting an independent assessment of the property, and the complex as a whole, from an inspector who has professional indemnity insurance and carries out their work in accordance with the New Zealand Property Inspection Standard.

As a prospective buyer, you were entitled to three sets of information from the seller, Mr Lampen-Smith said. These are:

1. A precontract disclosure statement, which the seller provides before entering into an agreement for sale and purchase

2. A presettlement disclosure statement, which the seller provides after entering the agreement for sale and purchase, but before settlement of the sale

3. An additional disclosure statement, in which the buyer may request some or all of the information the seller is required to provide.

“These statements help prospective buyers learn more about the property and the rights and responsibilities they will be signing up for if they purchase it. However, they do not always provide the full picture,” Mr Lampen-Smith said.

Becoming a unit title holder means you automatically become a member of the complex’s body corporate, which consists of all the unit owners acting as a group. A body corporate has a number of responsibilities relating to keeping the property in good order, organising and maintaining insurance, and making sure owners keep to the rules as set under the Unit Titles Act 2010, such as complying with all laws and particular requirements around noise and pet ownership, for example, and keeping their individual property in good order. Each unit title holder pays a set annual amount into a fund that looks after insurance, maintenance and other costs.

You should be provided with a copy of the complex’s body corporate rules in the precontract disclosure pack. Read these carefully, as they can limit what you may or may not do with the unit.

Each body corporate has an elected chair (who must own a property in the complex). A body corporate also must have a Long Term Maintenance Fund (LTMF) and a plan for dealing with any issues that will affect all the members, such as large-scale remedial works, such as upgrading lifts or insurance rate rises.

The REAA recommends asking for a further set of information about the body corporate to understand the financial position of the complex as a whole. Ask the vendor (or the selling agent) for a copy of the minutes for all body corporate general and extraordinary meetings for the past three years, plus financial statements and audit reports for the same period. Find out if there are any unpaid body corporate fees attached to the property you are looking to buy.

“It’s also worth chatting to other unit owners within the complex to see how the body corporate operates,” Mr Lampen-Smith said.

Ask to see the current Long Term Maintenance Plan (LTMP) and examine it carefully. These plans must be prepared for a mandatory minimum of 10 years and be reviewed every two years – it pays to be cautious if the current LTMP is near the end of its term, especially if the complex is in a poor state of repair. You’ll want to ensure the LTMF has the funds required to finance the ongoing expected repairs and maintenance detailed in the LTMP.

As with any property transaction, legal advice will be invaluable to help you weigh up the pros and cons of the decision. It’s a good idea to engage a lawyer at the start of the process. If you don’t have a lawyer, the New Zealand Law Society can help you find one at

“There are no silly questions when you’re considering a decision that will have a big impact on your emotional, physical and financial well-being,” Mr Lampen-Smith said.

“It’s far better to do your homework in meticulous detail than spend a lot of time and money on an expensive mistake.”

For more advice on buying and selling property, go to If you still have questions, contact the REAA on 0800 367 7322 (or 4 471 8930 if you are calling from a mobile phone).Running sport mediaAir Jordan