Managing a small Body Corporate: Importance of abiding by the Unit Titles Act 2010

The apartment owners in a complex of four unit titled apartments thought that because of the small size of their complex they did not really have a “Body Corporate” so they would not need rules, a maintenance plan, or any of the other things that Bodies Corporate normally need.

The apartment owners were incorrect.  All unit titled properties, no matter how small or large the development is, are governed by the Unit Titles Act 2010.  All unit owners in a unit titled development make up the Body Corporate, so there is no such thing as having ‘no Body Corporate’, although in some cases a Body Corporate could just be one or two people.

The only thing that a smaller Body Corporate is exempt from under the Act is the requirement to have a Body Corporate committee.  This is different to having a Body Corporate.  A committee is a smaller group of owners to which the Body Corporate has delegated certain responsibilities (such as setting levies or arranging maintenance).

Any Body Corporate with nine or fewer units does not need to have a Body Corporate committee.

If there is no committee, or no nominated chairperson of the Body Corporate, then all owners need to sign all documents on behalf of a Body Corporate.

Smaller Bodies Corporate should at least:

1. Have one insurance policy covering all units;
2. Split the insurance premiums across all owners based on ownership interests;
3. Have a Long Term Maintenance Plan (which can be very basic);
4. Provide disclosure statements (pre-contract and pre-settlement disclosure statements) when a property in the development is sold; and
5. If they do not want the default Body Corporate rules under the Act to apply, create and register a new set of rules.

Smaller Bodies Corporate should take professional advice as needed if they are unsure about any of their obligations or how they should be managed.

Laurie Pallett
Registered Legal Executive
Wellington