Labour will support bill's first reading to reform apartment living legislation

Prime Minister Jacinda Ardern with Building and Construction Minister Poto Williams (left). Photo / Mark Mitchell

Prime Minister Jacinda Ardern expects Labour will support a Members' Bill to amend the Unit Titles Act, which is hoped to make higher-density living more attractive.

The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill, under National housing spokeswoman Nicola Willis, may get its first reading in Parliament this week, depending on the progress of other bills on the Order Paper.

Willis said the legislation currently governing the management and running of thousands of apartments is not fit for purpose and a "headache" for owners and prospective buyers.

Issues include the disclosure regime for seismic issues, a subject keenly felt in Wellington's market, and the management of long-term maintenance plans.

"This reform is an attempt to cut through some of that, make it simple, professionalise the governance and management of unit title dwellings, ensure conflict of interests are declared and properly managed," Willis said.

Labour's Election 2020 Manifesto said it would review and modernise the Unit Titles Act.

This morning, Ardern said her expectation, from initial conversations, is that Labour is likely to support the bill's first reading.

"We do think that there's extra work that needs to be done, but at this stage that's unlikely to stop us supporting this first round."

The Unit Titles Act is the current legislation governing the management and running of thousands of apartments. Photo / Mark Mitchell

Associate Minister of Housing Poto Williams, who has the responsibility for the Unit Titles Act, later confirmed Labour's position in response to a letter Willis wrote on Friday seeking support.

She acknowledged the act was developed at a time when apartment living was still relatively uncommon and said reform is needed to ensure it is still fit for purpose.

But Williams said Labour has some concerns regarding the bill, including that it doesn't include stronger powers for the regulator to investigate and enforce the act.

Another concern for the party is that it proposes "disproportionate and onerous industry-wide requirements" for body corporates about long-term maintenance plans and fund.

"While Labour continues to have concerns with your bill including the above, I am hopeful that these can be worked through the Select Committee process," Williams said.

Associate Minister of Housing Poto Williams, who has the responsibility for the Unit Titles Act. Photo / Dean Purcell

Act housing spokeswoman Brooke van Velden also confirmed the bill would be discussed by the party's caucus today.

"However, the bill addresses issues for apartment and unity holders around how the body corporates operate and disclosure requirements for buyers that we think are important," she said.

The Greens confirmed they would support the bill at its first reading.

The draft legislation has been developed over several years and landed with Willis after Auckland Central MP Nikki Kaye retired from politics.

National Party housing spokesperson Nicola Willis. Photo / Mark Tantrum

Willis said the bill was important for both Wellington and Auckland.

"We need to see more housing in both those cities. Apartments and other types of multi-unit dwellings have to be part of the answer and we need to remove some of the barriers preventing people from making those choices."

Body Corporate Chairs' Group executive member Tim Jones said they supported the bill as a first step to amending the act.

He said the new regime would mean weathertightness and earthquake-prone building issues would be highlighted as part of initial disclosure, which potential buyers would then need to do their own homework on.

"What we hope will happen is that the disclosure regime will help them to actually make a better informed decision about what they're getting into."

Jones said at the moment people often only became aware of complications once they were living in apartments.

Areas proposed for reform:

• Improving the information disclosure regime to prospective buyers of units;

• Strengthening the governance arrangements of the body corporate, the entity responsible for the management and operation of a unit title complex;

• Increasing the professionalism and standards of body corporate managers;

• Ensuring that planning and funding of long-term maintenance projects was adequate and proportionate to the size of the complex concerned;

• Providing the ability to opt out of some requirements for smaller buildings such as requirements around long-term maintenance plans;

• Reducing proxy farming by setting a maximum of proxy votes at 5 per cent;

• Clarifying requirements around the existing 25 per cent quorum for general meetings;

• Enabling the flexibility to apportion utility costs based on use.