Changing your Operational Rules … what you need to do

A Body Corporate in central Wellington recently decided to change its operational rules pursuant to the changes that arose from the Unit Titles Act 2010. One unit in the complex was for sale, and the vendor had given the purchaser a copy of the new operational rules before they signed an Agreement for Sale and Purchase to purchase the apartment.

When the purchaser’s solicitor searched the title they found that the rules provided to the purchaser did not match the ones on the title. It transpired that the Body Corporate had neglected the final step of registering the rules, and had to hurriedly sign the relevant documentation to register the rules to avoid having to negotiate a delay in settlement.

The Unit Titles Regulations (2011) detailed the default Body Corporate operational rules that will apply from October this year unless a Body Corporate decides to implement new rules earlier than that. Many Bodies Corporate are choosing to add to the basic rules.

The steps required are:

1. Draft new rules;
2. Pass an ordinary resolution to adopt those rules as your new operational rules;
3. Sign a Notice of Change of Rules;
4. Register the new rules (on the Supplementary Record Sheet on the title to the complex) with Land Information New Zealand.

You need to make sure you follow the correct steps to ensure your rules are valid. Your lawyer will be able to assist with the above process.