Temporary exemptions to Incorporated Societies Act changes applying to Residents Associations…

For incorporated societies to continue operating, those registered under the 1908 Act must re-register under the 2022 Act that replaced it by 5 April 2026. To do so, a society must have a constitution which complies with the 2022 Act.

Assets on wind up

A key requirement of the 2022 Act is that a society’s constitution must include provision for its surplus assets to be distributed to a nominated not-for-profit entity if the society is wound up.  The Act explicitly prohibits distribution of assets to its members.

Residents Associations

While incorporated societies are typically operated for not-for-profit purposes, some societies exist to own communal facilities in a property development on behalf of resident members. These are commonly referred to as “residents associations”.

The incoming changes strictly applied would mean that residents associations that are currently able to distribute surplus assets (particularly communal facilities) to their resident members, would now be required to nominate a not-for-profit entity to whom surplus assets would be distributed.  This is not practical in the context of these associations.

A Temporary Solution

In order to better accommodate residents associations in the new Incorporated Societies regime, the government has created a temporary exemption, in the Incorporated Societies (Transitional Arrangements—Disposal of Surplus Assets to Members) Amendment Regulations 2025.

The Regulations enable residents associations to re-register under the 2022 Act, while retaining a clause in their constitution that enables surplus assets to be distributed to resident members for a transitionary period.

While this exemption applies it still requires residents associations to re-register by 5 April 2026 in accordance with the 2022 Act, like all other societies.

This temporary exemption will continue until 5 October 2028, which provides considerable time for the government and the associations to consider an appropriate solution to the issue.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.