Rainey Collins Lawyers

A New Department Of Building And Housing – How Does It Affect You?

By James Johnston, Wednesday, 16 November, 2005, Construction

On 30 November 2004 the first parts of the new Building Act came into force, including the introduction of a Department of Building and Housing.

This new Department has responsibility for the administration of a wide range of law in property areas including:

• The Residential Tenancies Act;
• The Unit Titles Act;
• Retirement Village legislation;
• The new Building Act.

It is described as a “one stop shop” for regulatory issues and standards affecting building and housing and for dispute resolution in this area.

With immediate effect it has taken over:

• Leaky building claims;
• The Tenancies Mediation Service; and
• The functions previously carried out by the Building Industry Authority.

The Housing Corporation will continue to exist as a stand-alone entity with responsibility for the policy and operational functions connected with housing provision.

Of particular interest to homeowners, property managers, landlords and tenants, is that the Department will be guiding through Parliament reform of the Residential Tenancies Act and Unit Titles Act. It will also be implementing the recent reforms to the Building Act.

Emphasis of Reforms

Residential Tenancies Act

The review of the Residential Tenancies Act is focused on addressing what is seen as a lack of rental housing for long term tenancies for low income earning families. The legislation will attempt to balance the needs of landlords, and encourage ownership of rental properties to service the demand for them, against the role of protecting tenant rights.

A large number of disputes arise in the residential tenancies area, particularly over unpaid rent.

The challenge will be to provide more support to tenants to budget better with a view to decreasing rent default, and at the same time assist landlords by providing a more streamlined process to follow when rent gets behind.

There are also regular disputes over responsibility for utilities such as water, where this is separately metered, and rubbish removal, especially in multi owned apartment blocks, and a redraft of the standard tenancy agreement is needed to address this.

Unit Titles Act

The review of the Unit Titles Act will address its lack of flexibility relating to alterations and additions to Unit Title structures. The Act was created to facilitate medium and high density housing developments as well as other multi-owned building developments. Particularly with residential housing, the Act is seen to be outdated and inflexible.

A large number of owners of unit titled units want the ability to make structural changes to their unit or boundary at some point. The current Act makes this a costly and complicated exercise.

For example, the mere addition of a conservatory requires resurvey and consent of all owners in the development.

A proposed change to allow for units to be made up of space rather than defined by the building on a strata title is under consideration.

An owner could then extend the buildings on their unit space limited only by the confines of the unit boundary. Likewise the ability to make minor changes to common property and unit title boundaries without resurvey has been recommended.

The successful functioning of bodies corporate is seen as fundamental to unit title developments to ensure the maintenance of common property and the implementation of rules required in high density housing.

However the administrative processes associated with running a body corporate are seen by many as unnecessary for small developments of say 6 units or less.

There is often conflict between the interests of owner-occupiers and the interests of absentee investment owners.

Suggestions under consideration are a move to a body corporate model that caters for different types of developments and a relaxation of the requirement for unanimity for certain decisions.

Provision for legal protection of Body Corporate Committee members and possibly a means for paying them for their time input, are further issues under consideration.

The general empowerment of bodies corporate is also a recurring issue, both in terms of recovering unpaid body corporate levies and entering into forward financial planning for more significant expenditure.

Suggestions of compulsory budgets, compulsory trust accounts for holding common funds and compulsory sinking funds are all under consideration.

Building Act

The reform of the Building Act involves a completely new Act with a new building code, compulsory provision of 10 year warranties in regard to building work and a future requirement for all builders working unsupervised, to be licensed, which the Department will oversee.

Perhaps the most important aspect of reform for homeowners is that final certificates of compliance will be required for newly built homes before they can be sold and occupied.

This will give the homeowner a warranty that the completed building complies with the Building Code, is suitable for its intended purpose, and that all materials used and the standard of workmanship are suitable and in accordance with the Code.

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