Understanding The Jargon
There are a lot of technical terms to get your head around within a body corporate. We've set out definitions for some of the more commonly used terms.
New to a body corporate, or have you been in one for a while and still wonder how some of the bits fit together? Read our easy information guide introducing you to the basics of life as part of a body corporate.
Frequently Asked Questions
Unit attached to one or more principal units, for example: carpark, storage locker or access way. Accessory units are intended to be used for a purpose that is ancillary to the Principal Unit to which it is attached.
Annual General Meeting (AGM)
A "General Meeting" is a meeting of all of the members of the body corporate, called in accordance with the requirements of the Unit Titles Act. A body corporate must have at least one meeting every year, which will be referred to as the Annual General Meeting. Other General Meetings are called Extraordinary General Meetings (EGM).
Also called 'body corporate levy' or 'body corporate fees', this is the annual contribution which each unit owner is required to pay in respect of their unit (based on an approved budget and their unit's Utility Interest) to enable the body corporate to meet its commitments. A body corporate might also raise a "special levy" for a special project.
The collective entity made up of all the owners in a unit titled development. You and your fellow owners are the body corporate.
An estimate of the costs that the body corporate will incur in the coming financial year, which is considered and approved by owners at a General Meeting. Once a budget is approved, it becomes the basis of the levies that you pay. The total payable in respect of each unit is (generally) calculated by applying the utility interest to the total of each item in the budget.
Owners elected at a General Meeting to govern the body corporate in accordance with the Act. The Committee has much of the power of the body corporate between General Meetings and liaises with the Body Corporate Manager.
Areas owned collectively by all the owners, and shown on the unit plan as such. Common Property is the responsibility of the body corporate (which is of course, all the owners of units within the development), while private property is the responsibility of the owner of the relevant unit.
Disclosure Statements When Selling Your Apartment/Unit
Crockers Realty is Auckland's Unit Title specialists!
We are the only Realty Sales company working with the largest body corporate and property management team in the country. Use the power and depth of our combined knowledge, we are experts when it comes to selling apartments!
Under the Unit Titles Act 2010, sellers are required to provide a lot more information to prospective buyers. The information contained in the disclosure statements is intended to help provide buyers with information that can assist in their purchase decision. The Act provides for three types of disclosure:
Pre-Contract Disclosure Statement
The seller must provide this statement at the time they enter into a listing agreement with an agent. The pre-contract disclosure statement contains general information about unit title ownership, as well as specific details such as the amount of the levy for the unit, upcoming maintenance to the development, funds held by the body corporate, and whether the unit or common property has had any weathertightness problems.
This statement is a standard format, the owner can prepare and provide this. If you are a client of Crockers Body Corporate Management, most of the information you require is available on MyCommunity and there is a template available on the Tenancy Services website (www.tenancy.govt.nz). Crockers can prepare this statement for you, but there is a cost to do so ($280+GST).
However, if you choose Crockers Realty to sell your unit as a sole agency, Crockers Body Corporate clients will receive their Pre-Contract Disclosure Statement, FREE of charge.
Contact Mary Amodeo, AREINZ for a FREE property appraisal:
Phone 09 623 5654 Email firstname.lastname@example.org
Pre-Settlement Disclosure Statement
The seller must provide this statement after entering into an unconditional agreement for sale and purchase, by no later than the fifth working day before the settlement date. This statement is usually organised through your solicitor with its purpose being to give the buyer a summary of the current fees and charges relating to the unit, whether there are any proceedings pending against the body corporate and whether there have been any changes to the body corporate operational rules.
This comes in two parts, the statement and then a certificate. The statement must be signed by the owner and the certificate by the body corporate. Like the old Section 36 certificate, Crockers is being asked to prepare these and sign the certificate ($320+GST).
Additional Disclosure Statement
The seller provides this statement at the request of the buyer and the buyer must pay all reasonable costs associated with providing it to the seller. The purpose of the additional disclosure statement is to make body corporate records on maintenance, finances, insurance, contracting and governance accessible to potential buyers.
A buyer can request an additional disclosure statement at any time before the earlier of the close of:
- the fifth working day after the date the agreement for sale and purchase was entered; or
- the tenth working day before the settlement date.
If a buyer makes a request, the seller must provide the additional disclosure statement to the buyer within 5 working days of receiving the request.
Pre-Contract and Pre-Settlement Disclosure Statements are mandatory.
Contact Mary Amodeo, AREINZ for a FREE property appraisal:
Phone 09 623 5654 Email email@example.com
Crockers Realty Ltd is licensed under the Real Estate Agents Authority and is a member of the Real Estate Institute of New Zealand. Our Sales and Marketing Consultants are qualified and complete regular training and development workshops.
Extraordinary General Meeting (EGM)
Any General Meeting of the body corporate other than the AGM. The Act determines who can call an EGM; the Chairperson, Committee or owners representing not less than 25% of the principal units by notice to the body corporate of their desire to call an EGM.
Long-Term Maintenance Fund
A long-term fund established to pay for future planned maintenance.
The Unit Titles Act 2010 provides a default set of Operational Rules. These are brief in detail and cover items such as parking and storage on the common property. Most bodies corporate will have lodged their own Operational Rules.
Ownership Interest is the same figure as Unit Entitlement (covered below). This is the figure used to raise the funds for items such as the capital improvement fund and determines an owner's voting percentage in the event that a poll is called. It can be changed but must be done by a registered valuer, and is based on the relative value of your unit when compared to others in your body corporate.
In the context of a unit titled development, this means property which belongs to an individual unit and is not shown as Common Property on the unit plan. Private property is the responsibility of the owner of the relevant unit, while common property is the responsibility of the body corporate (which is of course, all of the owners of units within the development).
Term contained in the Unit Titles Act 1972 (now repealed), meaning: the registered owner of a unit. The term "Proprietor" has been replaced with the term "Owner" under the Unit Titles Act 2010.
Written authority given to someone else to allow them to attend and vote on behalf of the registered owner(s) at a General Meeting.
The number of owners that must be present or represented at a General Meeting of the body corporate to allow it to conduct business. The figure under the Act is 25%.
Technically there isn't any legal difference between a levy that a body corporate raises to cover its operating costs, and a levy that it might raise for a special purpose such as a remediation project. To keep things simple and to distinguish between ongoing costs and one off costs, most bodies corporate that need to raise money for a special purpose will refer to the levy on members as a "special levy". As with ordinary levies, though, there will be a budget which is the basis of the total amount raised. Each unit's Utility Interest is applied to the total sum to be raised, which determines how much of the total each unit will have to pay towards the cost.
These require a 75% majority of those present, entitled to vote that do vote to vote in favour of the motion. Special resolutions cover items of significant importance to the body corporate, such as amending Operational Rules or changing the Utility Interests.
An account which holds each body corporate's funds entirely separate from all other money.
The term previously used under the Unit Titles Act 1972. When a unit title development was formed, all units were valued in relation to the total complex and to each other. The total value of each unit was divided by the total value of the development to give a percentage, which was the "Unit Entitlement" of each unit. The unit entitlement of a unit determined what proportion of the budgeted costs would be paid by the owner of that unit, and the voting power of that unit. The unit entitlement of all units in a development is shown on the unit plan. This concept has been replaced in the Unit Titles Act 2010 by Ownership and Utility Interest.
The plan showing the lot, principal units, accessory units, common property, and unit entitlements that is filed at Land Information New Zealand. The unit plan determines what is common property (and therefore the body corporate's responsibility) and what is private property (and therefore the unit owner's responsibility).
Unit Titles Act 2010 & Unit Titles Regulations 2011
The Unit Titles Act 2010 (UTA 2010) and Unit Titles Regulations 2011 give all unit title complexes the requirements they need to work under.
Utility Interest is the same figure as Unit Entitlement (covered above). It is the figure used to raise costs associated with running the complex, such as the long-term maintenance fund, contingency fund and day-to-day operating account. It can be changed by Special Resolution (75%) at a General Meeting but whatever the figure is, it needs to be fair and equitable. Should Utility Interest be changed, there can be no further review for another 36 months.