Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill

I move, That the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill.

Let me begin by paying tribute to the people whose hard work has contributed to this bill receiving its first reading in Parliament today. The Hon Nikki Kaye, my former colleague and previous MP for Auckland Central—Nikki worked tirelessly on this bill. She heard the concern of the many people in her electorate struggling with the practicalities of body corporate rules, and she didn’t just lend an ear to their concerns, she got on and drafted changes to the law. I want to acknowledge the Hon Dr Nick Smith, who kicked off the 2016 review of the Unit Titles Act that Nikki’s work drew upon, and the Rt Hon Judith Collins, who looked after this bill as National’s previous housing spokesperson. Finally, and most important, let me acknowledge the many people who’ve contributed to the drafting of this bill, whose feedback and views are reflected in its provisions: the body corporate chairs, the inner city residents, the property managers, the prospective buyers, and many more.

This bill updates and modernises the 2010 Unit Titles Act. That is the law governing the building developments where multiple owners have a unit title and there is shared ownership of common areas. This bill will make life easier for thousands of people currently living in multi-unit dwellings and it will open the door for thousands more people to choose that type of housing in the future, because the current Unit Titles Act 2010 is no longer fit for purpose.

It was designed at a time when apartment living was still relatively new. To give members a sense of that, in 2010 multi-unit housing developments, adjoined townhouses, and apartment blocks made up around 15 percent of new houses. Fast forward to 2017 and that number was 40 percent. It continues to grow and it must continue to grow. And in practice, because the current law is archaic and outdated, it is creating headaches for owners and prospective buyers. It is preventing people from choosing apartment living.

I want to acknowledge that this area of the law is complex and most Kiwis are not familiar with it at all, but do not underestimate its importance. It is relevant to a problem affecting all of us: our housing shortage. Members of this House know that housing has become, over successive Governments, our biggest policy failure as a nation. There is no physical reason New Zealand should have some of the most expensive housing in the world. It is simply the result of the policies we have in place across zoning, planning, infrastructure, and Acts such as this one. We do not lack for the land. We do not lack the desire for housing. What we need is for our cities to be able to grow up and out. And I would put to members that multi-unit dwellings of the sort this bill deals with are an essential part of that.

We are starting to see, as I said, more high density dwellings. Well, we need to see even more. In New Zealand today, around 6.1 percent of dwellings are multi-unit. That compares to Australia where it’s more like 10 percent, the UK where it’s around 16 percent, and Canada where it’s 32.5 percent. Of course, there’s a lot of things behind that. But the bottom line is we need to make it easier for people to choose this kind of housing. And right now, many people say they won’t even consider looking at purchasing an apartment or a unit in a body corporate because of the vagaries of the Unit Titles Act. Bodies corporate are repeatedly listed as a major reason why people choose to buy houses over apartments. In fact, things have got so bad that some developers are choosing to bypass the Act entirely by creating bespoke legal structures.

So what are the worries that this bill aims to address? It aims to address the worry that people have about being burned by undisclosed future repair bills. There are too many horror stories about the financial and emotional devastation that apartment owners face after buying an apartment that is later found to have a major building issue. This bill aims to address the worry about being ripped off by excessive fees from body corporates for things that people dwelling in those buildings don’t want. And this bill aims to address the complexity of currently solving potential disputes and issues. In short, this bill will make sure the Unit Titles Act serves current owners and prospective buyers much better.

Let me just take a moment to detail some of the specific provisions. The first area is around improving the information disclosure regime to prospective buyers of units. As I’ve said, people tell terrible stories about what goes on in the current regime—body corporate committee members mysteriously selling their units just before a report comes out confirming their properties are leaky. Right now, people buying a townhouse or apartment are not entitled to the detailed information they may need, in the pre-contract disclosure process, around issues such as weather tightness and earthquake strengthening. And while owners are required to disclose what they know about their apartment, it’s possible they won’t know the issues with the broader building in which that apartment is contained. They may not even know, for example, that their body corporate committee is doing an investigation into seismic issues.

This bill makes for a simpler regime and requires bodies corporate to endorse information as correct, and it entitles the buyer to more access to financial records, past copies of body corporate general minutes, and details of insurance cover. This bill will also strengthen the governance arrangements in relation to a body corporate. It restricts to 5 percent the number of proxy votes a single person can hold in a body corporate to prevent the unfortunate practice that has arisen of proxy farming. It also allows for more fair division of the costs of utility interests based on use, i.e., so that those living on the upper floor of an apartment building pay more for lift repairs.

The bill aims to increase the professionalism and standards of body corporate managers. It’s estimated that bodies corporate manage annual levies of around $1 billion, as well as $1 billion in annual long-term maintenance funds and deposits. That’s a big responsibility. Sector professionals need to have clear rules as to their obligations, which also allow for flexibility and creativity in their building, operating, and maintenance procedures. This bill requires body corporate committees to comply with a code of conduct to be prescribed in regulations and sets out the specific requirements of how body corporate managers must conduct themselves, including disclosure of conflicts of interest. Finally, this bill looks at long-term maintenance plans and the arrangements there, which many people currently operating in bodies corporate say have become unworkable, unwieldy, and require too much recourse to special resolutions for moderation.

I acknowledge, in presenting this bill today, that it is important we strike a balance between the benefits of any additional compliance requirements we place on bodies corporate and the costs they may impose. We need to get that balance right. And I acknowledge that many with a direct interest in this law may want to see amendments to the bill as it’s presented today. I very much look forward to discussion with other parties, the public, and those operating in this sector about how we can strengthen this bill at select committee, allowing, for example, medium residential developments between 10 and 30 units to opt out of some of these obligations by special resolution.

I have received some suggestions from the Associate Minister of Housing (Public Housing), the Hon Poto Williams, around what she would like to see to improve this bill, and I look forward to examining those suggestions at select committee. Let me commend members of this House who’ve indicated their support for this bill. You are allowing pragmatism to win the day. We mustn’t let perfect be the enemy of the good when it comes to reform in this important area of the law. Yes, this is a technical series of amendments, but this is a very important step in solving New Zealand’s housing emergency and giving New Zealanders more choices on where and how they live. I commend this bill to the House.

The question is that the motion be agreed to. As we’ve got less than five minutes to the dinner break, I will leave the Chair for the dinner break and the House will resume at 7 00 p.m.

Sitting suspended from 5.56 p.m. to 7.00 p.m.

The House is resumed. When the House rose for the dinner break, we had just finished the first speech in the first reading of Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill. The question is that the motion be agreed to.

It gives me great pleasure to speak on the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill—again, one of those bills that, on the surface of it, looks like it’d be fairly technical but, actually, it is a bill for our time, and I congratulate the member opposite, Nicola Willis, for having it drawn. So often, when members’ bills come here, they’re relatively simple affairs that are really designed to attack one part of a bill or one deficiency, but this is something that obviously—and if anyone had heard Ms Willis’ speech, they would’ve heard that it has had several iterations. It’s had something of a journey to arrive in this House and has been through several sets of hands. Congratulations on having it drawn, and certainly it is a bill that now has its time.

The face of, particularly, our inner cities, but even, increasingly, as we go out into the provinces—people are living differently, either by choice or by being forced to do that. In Wellington and most other cities, we have the national policy statement which was released last year. That national policy statement, essentially, requires councils in certain circumstances, certainly where the applications come or arise where they are close to public transport, within 10 minutes’ walk of rapid transport—then the councils must consider applications of up to six stories and with variations thereof. So it certainly means that a greater proportion of our population are going to end up living above ground, and it is really those above-ground arrangements, not exclusively, that this bill is to address, because, certainly, to live in shared space—shared arrangements, shared buildings—of necessity, there simply needs to be the sort of cooperation that this bill and the Act it amends are meant to remedy.

The other thing that will happen is that, as we now seek to reduce our carbon footprint, much of that, obviously, will pertain to transport. In any city here, on any day, New Zealand starts the world moving, and if you go every two-hour block around the world, there are a large number of cars that turn on and spew forth into our atmosphere. There is an absolute recognition that that cannot continue, and that will require us to learn to live in close quarters, even as we have experienced COVID. That in itself has brought us closer to home and made us understand we have to learn to cooperate a little better. However, cooperation is often—and anyone who’s been involved in any of these group activities will know it often only takes one or two on either side to ruin it for everyone. So that is why you do get regulation like this that becomes absolutely necessary.

So what does it actually seek to do? Really, to improve the information disclosure regime to prospective buyers of units, and as MPs with offices, we all have had terrible stories of constituents coming in who have ended up buying into an apartment block, buying into something administered by a corporate governance regime, body corporate regime, and finding out that, all of a sudden, they’d inherited a leaky building, inherited the need for new lifts, inherited all sorts of needs. Unfortunately, really, no one has been really able to be held responsible for that, until we get legislation like this that ensures that at least—and this is one of the provisions here—the minutes of any meeting can be examined and must be able to be examined. Terrible to find out that, yes, there has been a corporate meeting that has decided, “Yes, we’re going to have to spend a considerable amount of money on this building.” but somehow there was actually no record of that.

So, as you look through the bill, you’ll see some of these things that, on the surface of it, may look like common sense, but it is absolutely necessary to give protection to, really, all parties, not just the purchaser but actually those that are selling to make sure that they can’t actually be accused of having pulled the wool over sellers’ eyes, because there was the information able be collected. Just, interestingly, in preparation for speaking tonight, I was speaking to someone who related their own, probably typical, experience of having a building which they purchased stand-alone or there was some shared space and there was subsequently an apartment built. That shared space had drawn them into the body corporate, and all of a sudden that apartment that was built became a “leaky”—that terrible word that’s entered our lexicon—and they found that they were actually then responsible for the costs of the apartments, even though theirs was a relatively stand-alone affair with only shared costs, or “shared” being some parking areas. That, for them, began a very expensive exercise for that particular person to ensure they came free of that.

Again, it’s quite interesting when you get an anecdotal case like that. It’s good to look at the legislation, see if it is covered, and it pretty much would be covered, because one of the provisions of this bill is apportionment to ensure that if you’re—and the previous speaker, the sponsor of the bill, mentioned about living on the top floor of a building where, of course, the lifts, ensuring that they were working well, had full access to them. There’s certainly no way that someone who actually didn’t even avail themselves of that should be paying the same cost as those who live on the top floor. Again, this bill will give opportunity.

Now, I will say, as the first Government speaker on this bill, that we will certainly be supporting this to select committee, and I’m fortunate, I’m pleased, that the member chose the Finance and Expenditure Committee, of which I’m a part, to examine this bill—

Chlöe Swarbrick: Great committee—great committee.

💬 Nicola Willis: Great committee.

—because—great and hard-working and well-led committee, can I say, in deference to my junior whip here, from whom I may need leave at some stage. So, certainly, this ensures that we are looking at such apportionment, and it’s absolutely essential that we go down that path.

Even another very interesting part of this bill is the fact a quorum—who would’ve thought that you would have to ensure that bodies corporate actually had a quorum, but, actually, you do. It also addresses the matter of proxy voting. Again, those parades of people that come to our electoral offices, often there have been—and I won’t, sort of, cast too many aspersions on those who perhaps—and one incident I know where they inevitably held their corporate meetings when there was an All Blacks game on to ensure that, probably, those people may not have actually had the time or interest in attending the meeting. So to ensure that there are basic meeting requirements around ensuring that there is a quorum—also just ensuring that no one shareholder, that the person cannot act as a proxy for more than a certain proportion of the ownership—again, all these basic things, but when you look at this bill, you suddenly see, in the absence of these provisions, just why we have had so many problems and why we do get, as I say, this parade of people to our electorate offices looking for this.

So, I think this is, again, one of those bills, certainly, whose time has come. Just previous to this, there was some commentary on my colleague Louisa Wall and her luck at getting bills drawn at the right time, which I—Louisa’s here at the moment. Perhaps she always put it down to the fact that it was the time for each of those bills that needed to be debated. So perhaps it may well be, and I’ll give it to Ms Willis to say, that perhaps this bill’s time has come—again, congratulations on having it drawn, and I’m looking forward to being part of the debate on this bill at select committee. Again, as I say, we are going to be voting for it to go to select committee. I think there’s one or two little improvements we can make, and I’m looking forward to being part of that. So I certainly commend this bill.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. In standing to support this bill on behalf of the Green Party of Aotearoa New Zealand this evening, I want to acknowledge the forebears that brought this piece of legislation to the House, to the hands of Nicola Willis, who, I must say, has done an incredible job in collaborating across the Chamber to ensure that we get this to the Finance and Expenditure Committee—a mighty fine committee it is. I need to acknowledge my predecessor, the former MP for Auckland Central, Nikki Kaye. I know that she held an immense amount of mana and respect in this space in particular.

But, of course, this is a huge issue for Auckland Central, and I note even within the Finance and Expenditure Committee, we have the chair, Dr Duncan Webb, who represents Christchurch Central; of course, Nicola Willis is a list MP based in Wellington Central. I believe that the Minister of Finance, as the member for Wellington Central, has a direct interest in this. So I’m hoping that us who represent cities—where places are becoming and abodes are becoming more dense, as my colleague Greg O’Connor put it here, in order to minimise sprawl and make housing more affordable—are incredibly engaged in progressing this legislation and improving it through the process of public engagement.

With only five minutes to contribute tonight, I want to acknowledge that a number of the issues have already been canvassed, including particularly in the contribution by Nicola Willis. But, fundamentally, the current law is not fit for purpose. The unit titles legislation, the Unit Titles Act, has a number of fish hooks and loopholes, and this manifests in a huge number of problems. The units, for example, to which these titles are afforded, range all the way from small town houses, where there may be a handful of different unit titles, through to heritage buildings and apartment blocks, but also pertain to commercial buildings. Importantly, this doesn’t only pertain to apartment blocks.

There are issues with disclosure, as has been noted, with maintenance, with disputes resolutions, with fees, but also, importantly, with some conflicts of interest. Some of the problems that start to emerge and that I’ve heard of from not only members of the electorate but also from my friends and my family—and myself, in digging into these prospective apartments—are that sometimes it appears as though issues inside of apartment blocks, as they already exist for those unit owners at present, are not investigated for the potential that more costs might arise by virtue of the need to invest in something like a long-term maintenance plan, or, potentially, disclosure, or lack thereof, to prospective buyers. This is a case that I have seen with a number of heritage apartments in the instance of asbestos, where there is some recollection, potentially, that when these buildings were produced, there may have been asbestos used, but there isn’t the inclination or the interest in investigating it, which creates a problem not only for those present owners and the maintenance that is being postponed, where issues may arise further down the track, but also for those potential prospective buyers.

It also poses a number of issues where a few people—those who will proverbially go down with the ship of the building—decide to wait, see out their time, however long it may be that they will live in that apartment, and block progress of maintenance plans. On the flip side of that, there are some people who do what is colloquially known as, as the member Nicola Willis noted, proxy farm, where they go about a process of, effectively, capturing a number of votes and forcing some process, progress, or changes which can end up binding a number of members who live within that block, being lumped with bills that they cannot afford. These are a number of the issues that are starting to bubble up and have been for several years now.

I do have one question that I think will be really important to investigate as we go through the select committee process, and that is a discussion point raised to me by an expert, a lawyer in this area, who asked about what should be in the primary legislation—that is, that that has, currently, parliamentary oversight and that we can rigorously debate and investigate but it takes a long time to change, as has been evidenced by the progress of this legislation—and what should be in the secondary legislation, in the regulations, that can be a lot more flexible but don’t and aren’t afforded that same level of parliamentary oversight.

The Greens are proud to support this because it is one critical tool that will enable more people to get into a diversity of different living situations, but it’s important to note that this is only one tool; there is a number of others that must be investigated and applied to solve the housing crisis in this country. Kia ora.

Thank you, Madam Speaker. It’s a privilege to stand here to contribute to the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill. I want to acknowledge the sponsor of the bill, Nicola Willis. Thank you for your due diligence and your energy in bringing this to the House. As we know, it’s come through many hands of leaders who were in this Parliament; so I want to acknowledge, as the member has just acknowledged, Nikki Kaye, and, of course, members have acknowledged Nick Smith and, of course, Judith Collins.

What this bill does—actually, I need to say that I live in an apartment block, and I have no idea; I’ve never attended a body corporate meeting. I’m the person that gives a proxy to someone to go and speak on my behalf, and before getting into—

💬 Dr Duncan Webb: You’re the reason for this!

So I think I represent the future of New Zealand: New Zealanders who live in apartment blocks and have no idea about bodies corporate until you get into it. Just over a year now I’ve been living in an apartment; I’ve not been to a meeting yet.

So I want to acknowledge this bill, which will address and bring in safety for those New Zealanders who live in apartments. We know that the time when this legislation first came about—the Unit Titles Act in 2010—most of those times, living in apartments was not a regular thing to do. It was relatively uncommon here in New Zealand, but, you know, fast track 11 years and that’s where we’re going, because we are needing to provide homes for New Zealanders. On that note, I’d like to acknowledge our bodies corporate, and I’d like to acknowledge the chair of the apartment block that I live in, that I call home. Thank you for always voicing the owners’ opinion and sticking up for our rights. So I want to acknowledge those people who make the effort to go to meetings.

This is an example of how community voices become public, they involve a lot of academic people, a member picks up the bill, has lots of discussions with the Government of the day, and then it is part of our, the Labour Party’s—we campaigned on this, that we would look into it, and this is where we—I’m obviously speaking in support of this bill, and we are going to support this bill to select committee with the intention of making it better. As we know, for every bill that goes to select committee, that makes it better. So I look forward to seeing the journey of this bill through the House. As I have said, I’ve got a personal interest in this being done really well. It provides an example of where we as a Parliament can work together—can work together even though we have disagreements and differing opinions. We can work together for the betterment of New Zealanders.

So in my apartment block there’s 42 apartments. Like I said, I’ve never been to a meeting before, and I like how this bill intends to require the sellers to disclose information about a unit to potential buyers. It will prevent the body corporate from entering into service agreements for longer than 24 months. That’s two years; that’s a long time. So I like that, because we all like to know—one of the biggest things that we ever buy in this country, for a majority of first-home owners, is buying a home—is buying a home. And when we do buy a home now—as I said, before it was uncommon to be living in apartment blocks, but it is now the normal thing to be doing. First-home buyers will be looking at purchasing apartments, and it is one of the biggest ever investments that most of us get to make.

It is the intention of the bill—and I know that the member will agree with me, asking everybody out there to contribute at select committee so that we make the select committee improve on the bill—that it will contribute to protecting future homeowners, because apartment buildings are homes, from unfairly inheriting something that was out of their control, and yet we here in Parliament have an opportunity to make it better. On that note, I commend this bill to the House. Mālō.

Thank you, Madam Speaker. I rise on behalf of the ACT Party in support of the first reading of the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill.

I don’t own my own home. Like most New Zealanders, though, I share the dream of homeownership. I’d like a three-bedroom weatherboard house with enough room for a dog and maybe a garden, and enough surface level problems to justify a weekend trip to Bunnings! But I can’t see that happening any time soon, not with house price increases the way that they are. Unfortunately, for many of us, that dream has slipped further and further out of reach. New Zealanders on a good income are getting left behind, let alone those on an average wage or even the minimum wage.

So, instead of looking to buy or live in homes on sections with a piece of land, more and more people are looking for an alternative. They’re looking to live in apartments, town houses, and units. More people are looking to the style of living that we’ve seen in Tokyo, New York, or even London. Apartment dwelling is more than just uni students wanting to be close to university buildings, friends, and bars, or young professionals reducing driving time to work; apartments are permanent homes with a sense of belonging—a place to raise a family—and more families are going to be doing this going forward.

There’s an estimate that over 145,000 New Zealand households live in apartments, and that number is going to double in only 20 years. These people will live in homes that are considered unit titles. More people living under unit titles would not usually require Parliament’s attention, if the law was actually working. Unfortunately, it’s not; so Parliament has to act.

ACT supports this legislation to the select committee because Parliament should spend time on things that matter to the people that elect us. When people buy a property in a unit title, they want to know what they are buying into—how does the body corporate operate; what maintenance issues has it identified; and how does it plan to maintain them in the future? Once you own that property that is part of a body corporate, you want to know that it will keep maintaining the property well, that it will fix what needs to be fixed, and that it will use your money carefully. Often, there are conflicts within bodies corporate about how to do this. Investors, for example, might have different interests from long-term owners who are retirees. There needs to be a clear and transparent process for making decisions when people have different views about how a property should be used and maintained. I know of one battle between retirees of a certain age and younger people who wanted to use their Airbnb to help pay their mortgage. There needs to be a clearer process for how those kinds of issues within apartment buildings can be resolved.

This bill seeks to improve governance for existing owners and disclosure for potential new owners. For that reason, it deserves to be examined by the select committee. However, we don’t want this well-intentioned bill to place greater costs on people than the benefits they get from following this law. Normally, there is a regulatory impact statement to assess the costs of a new law. Because this is a member’s bill, rather than a Government bill, we have not seen a regulatory impact statement. If there is a cost added to a homeowner under this bill, it should be spent to benefit the owner and their property, rather than simply an added cost just for the sake of a new regulation and complying with a new parliamentary law. I would ask the Government to provide a regulatory impact statement for this important piece of legislation—an idea that, arguably, the Government should have provided as its own bill.

What is certain is that this Parliament needs to turn its mind to the rules of unit titles, and I urge MPs all across the House to join ACT MPs in supporting this first reading so all of the public can have their say at select committee. Thank you.

Thank you very much, Madam Speaker. It’s a privilege to be able to speak on the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill. I acknowledge the bill brought to the House in the name of Nicola Willis. The important thing to mention—and I think this issue comes up quite a lot because we’re seeing an increasing number of homes being built that are utilised in the form of unit title—is that the member’s bill proposes to introduce proportionate utility costs and a code of conduct to body corporate committees to enable that enactments can require long-term maintenance plans and a yearly audit of those plans for those complexes that are larger than 10 units.

We know that right here in Wellington, and particularly in urban centres such as Auckland, there are multiple instances where people are paying quite hefty body corporate fees. We’ve also seen this particularly occur as there have been requirements for earthquake strengthening, sometimes with those holders of unit titles being faced with some bills that are close to the value of the property in order to enable that earthquake strengthening work to take place. So it requires sellers to disclose information about a unit to potential buyers and prevent bodies corporate from entering service agreements for longer than 24 months.

So, in general, Labour will be supporting this bill to select committee because it’s important that we do hear from submitters. As part of the previous Governance and Administration Committee, we did hear petitions and submissions from those people who were under unit titles. So I think that it’s important to be able to continue the ability for people to have their say and to come to Parliament, and I look forward to the select committee process being able to do that. Labour supports the reform of the Unit Titles Act. The member’s bill makes some of the changes that we would like to see. However, there are some details that need to be addressed in the select committee stage—and that is exactly what that part of the legislative process is for: to identify those issues and look for areas that can be strengthened.

Look, there has been a lot of development in this space, when you think of the old quarter acre section and how New Zealand used to look and how much that has changed over time. There is no doubt that there is a requirement for the legislation to change in order to accommodate how we make sure that those people who are owners of those properties are still looked after in terms of a modern context. We know that buyers do need to be protected and the Act needs more transparency in the planning and the fundamental maintenance of projects. So improving that disclosure regime to prospective buyers will also be key in supporting and incentivising buyers of unit titles. In essence, there is a clear view that owners should pay for what they use, with better proportionality when it comes to imposing those service costs. It’s quite often that there are hidden costs that are not made clear to those owners when purchasing an apartment in a building.

So why do we support this bill? In essence, Labour supports the reform of the Unit Titles Act because of the changes that we think do need to be made in this space. We acknowledge the fact that owners should pay for what they use. Also, some additional areas that the member’s bill could still do some work on—I think it’s important to flag now, because those are areas that submitters can also bring to the select committee. It would be good to also specify whether this would be a blanket approach or subject to agreement by body corporate committees. In addition to this, it would also be good to elaborate on how proportionality might be forecast when disclosed to buyers; how is that communicated in those types of sale-and-purchase arrangements? It would be important to discuss how proportionate utility costs might affect decision-making processes such as how owners contribute to the body corporate decisions in the services that they have little or maybe even no interest in. And, finally, it is important to acknowledge the likelihood of disputes over proportional service costs or how these disputes will be dealt with. So they are the sorts of details that members on this side of the House look forward to the select committee process nutting out over time. I commend this bill to the House.

E te Māngai, tēnā koe. I speak in support this evening on the unit titles amendment bill, and I too acknowledge Nicola Willis for the work that has been done around this. As a newbie in this House, you tend to learn a bunch of things as these sorts of bills come in front of you, and this particular bill speaks to me, as an Aucklander, with the growth pains that we are experiencing and the challenges, as a large city, in the large developments that we see all around us.

I note, right across from my house, in little Willow Avenue, is a development of 12 town houses, and, just down the way, there is a major development in Zion Road, with 49 apartments in a single lane road. Our concern, as a local neighbourhood, is around the infrastructure and both the ability to deal with the population growth that we have but also that we have infrastructure that supports those developments. When I looked into this bill, it actually gave me a sense of comfort, Nicola Willis, because it spoke to my community and it, too, would enable them to have a sense of comfort that there are better controls around the quality of housing and the quality of developments that are rising up within our community.

This bill introduces the proportionate utility costs, but I also like the idea of having a code of conduct in place, and I look to my journey. I heard from my fellow member Anahila about her journey and living in apartments, and I too spent 15 years, when I moved to Auckland, living in apartments. I thought for a moment: did I ever think about the landlords or the owners or how they cared for me? I didn’t question it, in fact; I simply paid my rent. I aimed to be a first-home buyer, but I let others take responsibility, effectively, for the facility that I lived in. At times, I had broken lifts. At times, I lived in apartments that were leaky. That’s the reality of many, many Aucklanders of my generation. When I look to this law back in 2010, that was a long time ago. Auckland has changed. Auckland has grown. We have much larger developments going up in our community. So I do support the need for a better code of conduct.

When I look to the long-term maintenance plan requirements, I also support that too. It’s something we require for any public facility. It’s something that we require for schools’ facilities—10-year maintenance plans—to ensure that the quality of that facility is good for the people that are working, learning, or living within that, and I see housing as no different. I talk quite often—and I spoke today in the general debate—around how proud I am of our programme of housing in Auckland under this Government, in putting people at the centre. So this particular member’s bill does speak to that too. It does put people at the centre and enables that there’s adequate checks and balances, I guess, to the quality of housing that Aucklanders are living in. More and more people in Auckland will be living in town houses and in apartments as we grow, as we grow, and as we grow some more.

So, for that very reason, I would like this bill to go through the select committee process. I think there’s merit in ironing some of those kinks out and having broader discussions around the maintenance plan requirements and around what’s included in that code of conduct—how we care for people and how we ensure that we have quality housing standards, including those being warm and dry. I also support this bill to go through because it does give my community some sense of satisfaction that people care about the large-scale builds that we’re experiencing under the unitary plan. Thank you very much to the member for putting this forward. I commend this bill to the House.

Thank you, Madam Speaker. As the building and construction spokesperson for National, I’m happy to take a call on what is another quality member’s bill proposed by this side of the House. We’re used to seeing these sorts of bills put forward by National; so it’s great to see widespread support for this debate tonight—and especially going to the select committee process. And I’ll just acknowledge the comments earlier from Anahila Kanongata’a-Suisuiki, who mentioned that the select committee process always manages to improve a bill. I’d just encourage her to remind her senior ministerial colleagues of that, too, given their propensity to use urgency to bypass that process of late.

Anyway, coming to the unit titles bill in front of us. We’ve heard a lot of consideration from members throughout their contributions tonight around why this is an important piece of legislation, and it is. Apartments are becoming an increasingly important housing option and provide capacity for further density in our urban environments, which is an important part, in my view, of where we need to be getting to—building up more so than out. When we look at our pretty significantly large footprints in our urban centres, we need to ensure that we’re maximising the potential within those boundaries by going up. But—and this is the challenge for a lot of people—the current system raises a lot of questions. It raises a lot of red flags. And whenever you have uncertainty, people will, naturally, shy away from it. So, for a lot of people, buying a residential property, apartment or house, is the most significant asset purchase they will make. And also because of that, it’s something they’re not particularly familiar with doing; they are not particularly experienced with buying and selling properties and exactly what sort of things they need to consider when they’re conducting their due diligence around a potential property purchase.

Of course, in the current situation, the volume of information you can access when looking to buy an apartment is actually very low. And of course we saw some changes to the real estate Act a number of years ago, now requiring disclosure to be made of any known problems, and also that is an expectation placed on vendors; they must disclose any information they have. But, of course, if they’re unaware—which can, as we’ve heard tonight, be the case with apartment properties—then you can end up with someone buying a home that they have maxed themselves out to do as a first-home buyer and then suddenly being confronted with an unaffordable maintenance bill to upgrade any particular aspect that has arisen as the result of some long-term maintenance plan that hasn’t been funded fully. Because, interestingly, and I was amazed to see this in the Unit Titles Act, currently there’s a requirement to have a 10-year plan—that will be extended to 30 as proposed under this bill—but there’s also a requirement, section 117, that there must be a long-term maintenance fund unless the bodies corporate, by special resolution, decide not to have a long-term maintenance fund. Right, so that seems a little bizarre that actually there’s no requirement to have a fund for these long-term maintenance issues. So that’s something I would expect we’ll hear from submitters on during this process as well.

But we’re also seeing the evolution, I suppose, of different construction methods. We’re seeing an increasing focus around modular or prefabrication construction, and I think, over time, we will see more people looking for the ease, the convenience, and the cheaper purchasing price—particularly in the current market—that an apartment can offer, or a property and a unit title can offer. And that’s all good stuff. Of course, we need to see Resource Management Act reform to enable more construction of these types of properties, and I encourage the Government to continue their proposals in that space, and we have plenty of advice to share or suggestions to make in terms of getting that in the right space.

Look, just a couple of the key points I want to touch on in my last minute here. As I said, that disclosure is a key concern for a number of potential purchasers. So improving the information disclosure regime is absolutely vital. And, you know, that really, I think, potentially comes to the core of the issue for a lot of people. They don’t know necessarily what they’re buying and what it looks like as an ongoing commitment for them. So I’d also just like to at this point acknowledge John Gray, the president of the Home Owners and Buyers Association of New Zealand, for the work he and his organisation have done, which has been significant, on this. I appreciate the time he shared with me sharing some of his insights. So they’re proposing having a building survey done on all existing buildings so that you know your starting point, right? And, for a lot of people, that gives them straight away a lot more certainty. So I look forward to seeing discussion on that through the process, as well.

The other one around the professionalism of body corporate managers and codes of conduct—that’s all good stuff; and planning and funding the long-term maintenance—that’s a biggie. So I think there’s some really good points here. We’ll see some change. I encourage submitters to get involved with it and look forward to seeing it progress. Thank you.

Thank you, Madam Speaker. It’s a real pleasure to rise and take a five-minute call on this bill. I would like to acknowledge and recognise you, Nicola Willis, for bringing this bill to the House. I think it’s, as we’ve heard previously, a bill that has now come in full time to this House. I would just like to say, however: there have been four lots of hands, yet we still have the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill. Let’s work on the title, shall we?

Look, I do want to congratulate you, and often when we’re in this House we learn things. I remember at law, a long, long time ago, looking at bodies corporate, and looking at this Act—the principal Act, the original Act in 2010, the Unit Titles Act—I was gobsmacked to discover that there were some very fundamental things lacking in that Act; absolutely gobsmacked. I did not comprehend that this bill lacked basic definitions—basic definitions—for example, what a chairperson is of a body corporate. So I want to acknowledge that this a long time coming. The legislation is—gosh, but it’s only 11 years old, right, and it is so dated, this legislation.

Look, we will be supporting this bill to select committee. There is a lot more broader work to be done in this area, but I certainly take the point that the member has made: don’t let perfection get in the way of good. I acknowledge that. I think that there are some good aspects to this bill. I think there’s going to be a lot of work to be done, but I do want to say that this is probably one of the most substantial members’ bills that I have seen in this House in my short time. It is well thought through and there are a lot of areas that have been covered.

So certainly, for me, just having a little bit of a deep dive into some of the clauses that I find personally of interest—and I know that my good colleague Dr Duncan Webb will be developing some of this at select committee; it will be an interesting process—new section 113 in clause 14, the decision making of the body corporate to keep written records: who would have known? There could be hundreds and thousands of dollars’ worth of assets that are being managed by these bodies corporate—

💬 Hon Member: Millions.

—millions, even—and written records aren’t required? That is outrageous, I think. New section 114A in clause 15: the body corporate is to comply with a code of conduct, and while that code of conduct may be addressed in the principal legislation, it’ll also be addressed in regulation. To me, a code of conduct in these kinds of matters is absolutely fundamental—it’s absolutely fundamental. Imagine—and we’ve heard anecdotally some of these stories—people selling a property because they’re aware that it’s become leaky or seismically unsafe. We’ve heard those things, and they make the money and then it’s sold onwards. Some of these codes of conduct and codes of behaviour are so very important. New section 114B in clause 15, conflicts of interest—now, that to me is of great interest: conflicts of interest as on the body corporate. Managing the financial role, and I think of this like a trustee managing a financial role, versus being an owner of a property and having benefit—these are things that need balancing and working through. New section 114G in clause 15, the definition of a body corporate manager—that will be interesting; a job description, perhaps.

But finally, in my last 30 seconds, I have indicated that we will be supporting this bill. I think of my retired mother-in-law, who has downsized to a lifestyle village. It’s leased, but it’s also operated by a body corporate, and I think this bill will help and support her to live well. Thank you; I commend the bill.

Thank you, Madam Speaker. I must say, when I picked up this bill, a shiver went through my spine.

💬 Hon Members: Ha, ha!

Oh well, you may laugh but, no, in my time as a lawyer dealing with earthquake claims, the worst cases of all were body corporate cases where you had extremely complex building problems, technical building problems—

💬 Hon Gerry Brownlee: Lawyers’ failings!

—and extremely—well, there was someone else who failed Christchurch then, Gerry Brownlee. But here, what we have is an attempted fix. And I must say, seeing as we’re on the topic of lawyers, I wonder if perhaps this has not come straight out of a lawyer’s notebook, because it does strike me as something of a list of “to dos”, when a lawyer zapped through and said, “Here’s a whole lot of things that I’ve seen go wrong with bodies corporate.” Now, that’s not altogether a bad thing, and I certainly agree and commend Nicola Willis on bringing this topic to the House. But I do sometimes wonder if these have not been, kind of, not addressing the matter as a point of principle but rather as a list of detailed and technical amendments.

I thank the member for seeking to refer this to the best, most gifted, most cooperative, and most hard-working committee in the House, the Finance and Expenditure Committee, but the matter does have to go to a vote. The indefatigable Clerk was referring me to the Standing Orders. Apparently, we can’t debate the motion, but we still have to vote on it. So don’t count all your chickens before they’re hatched on that particular number.

But look, I do want to point out here that there’s a danger that we simply put another layer of rules on an already complex piece of legislation.

💬 Hon Simon Bridges: I laugh in the face of danger!

Because, of course, we all know what the National Party want to do with regulations, don’t we: put them on a bonfire. And yet here we have a piece of legislation which has, at least from my count, at least three, on a cursory glance, additional regulations. Now, regulations certainly have their place. And we know, you know, the Regulations Review Committee, another fantastic committee, recognises the quality of those regulations, but I do have some concerns that we’re simply going to impose more obligations.

You’ve got to remember that many body corporates are simply small groups of individuals who are not particularly proficient in reading complex legislation, let alone subsidiary regulations, codes of conduct, and so on and so forth. So body corporate regulations should be intuitive. And if you look at the conflict of interest rules, an area in which I have a particular interest, you can’t be a member of the body corporate committee—and I’m glad Nicola Willis is taking notes for her reply, because this is exactly what I’d like her to reply to. So you can’t sit on a body corporate committee if you have an interest that is particular and not shared with every other member. So if the committee is considering a leak which is in your unit and the one next door but not the other four, you have a conflict of interest and you can’t sit on that committee. Now, is that the case or not? Now, I’m not entirely sure, but absolutely these things need to be discussed at select committee, but there is a real danger that we just have a hotchpotch fix-up.

So I think there is a fair bit of work to be done in committee. Even the membership and voting rules, you know. Yes, we need clear voting rules and we need clear rules around proxies. But I’m fearful that we might have gone a bit too far and just be making rules not quite for the sake of them, but for a very small number of cases where rules which are by and large workable have been abused. Now, the Unit Titles Act itself has broad ranging dispute resolution mechanisms, and that’s certainly something that also needs to be looked at, because we’ve got to accept that recourse to the High Court is not good for everyone in every instance, and in many cases it’s far too expensive.

Perhaps that’s where we should be looking. Rather than trying to write a rule for every possible twist and turn of human nature when you’re living—and we know that neighbour disputes are the worst disputes of all, because that’s what unit title disputes generally are, and you really can’t write rules for all of those situations. So, yes, it’ll probably come to the Finance and Expenditure Committee, but if it does I’m sure we’ll have a great time looking at it, making it a better bill, and seeing what happens to it from there. Thank you, Madam Speaker.

E te Māngai, tēnā koe. I want to thank members across the House for your indications of support for this bill this evening. It is special and refreshing to see support from the ACT Party, the Labour Party, and the Green Party, and to have agreement that it is now time to reform our outdated Unit Titles Act. In fact, we’ve seen some fantastic contributions tonight that give me great heart that the select committee process for this bill will be a thorough, substantive exercise.

In fact, I haven’t very often seen such levels of passion as we just saw from Duncan Webb. Not even on matters of tax have I seen him get so passionate, and I am very much looking forward to sitting with him around a table where he is the one arguing against complexity in regulations and excessive regulations. These are words that sing strongly to me, and so we will have a meeting of minds on that, Mr Webb.

I also want to acknowledge the tributes to the Hon Nikki Kaye that have been shared in the House tonight. There is no doubt that this is a very substantial piece of work that she’d brought together, and it is my honour to be shepherding it at this juncture.

It’s a reminder that Parliament can be a place where MPs make contributions that work together to advance reform. This is certainly an area where that is overdue, and I want to recognise the contribution of members from a variety of perspectives who see the need for this reform.

Greg O’Connor, thank you for flying the flag for Wellington. These issues are very real here, and I’m sure Greg O’Connor—like me—has been lobbied by inner-city Wellington and others who see this as vital.

Thank you, Chlöe Swarbrick, for continuing to speak up for Auckland Central apartment-dwellers who wish to see this reform, and I acknowledge your point that there is decision making to be made about how much of this reform sits in the primary versus the secondary legislation.

Thank you, Anahila Kanongata’a-Suisuiki. You are, I think, the only apartment-dweller that spoke tonight, and that is very important because it keeps it real—acknowledging that not every apartment-dweller wants to turn up to body corporate meetings and read every minute. That’s something we need to keep in mind as we deliberate on this bill.

Thank you, Brooke van Velden, for the ACT Party’s contribution. I think Brooke speaks for many when she acknowledges that New Zealanders of tomorrow want to keep the dream of homeownership alive, and apartments are a really important part of keeping that dream alive.

Thank you, Ginny Andersen. I agree with you that this is a bill where we will have to listen hard to submissions to make sure we’re getting things right.

Thank you, Shanan Halbert, for an Auckland perspective. I think that I will take your words more to my heart when you say this bill is a comfort to you, whereas Duncan Webb saw it as a shiver down his spine. I am happy to be a comfort to you and to the Labour Party, as you may need me in the future in terms of coming up with good ideas for what you should be doing. On a number of matters, I am able to offer you some good ideas, so let’s just start with this one and see where we go.

Angie Warren-Clark, thank you for your contribution. I’m going to think about your grandmother, I think it was—your mother—as we progress this bill, because this is certainly something that needs to work for all generations and people in all sorts of circumstances. I take your tip on the title, but I urge you to come up with a good suggestion, because it’s difficult to summarise the sheer breadth of this bill.

Look, I want to end on the note of encouraging those listening to this debate or reading the Hansard who think that people in this House haven’t got it quite right or that we’re misunderstanding things. Please, we want to hear your views: make submissions. The Finance and Expenditure Committee will deliberate seriously on this bill. As I said at the beginning, it’s very important to me that we get the balance right between trying to create benefit for those who are living in these kinds of dwellings at the moment or who wish to buy them and also not creating too much additional cost and complexity. I don’t want to be leading a bill that does that, so let’s get that balance right.

We need to hear from those who are dealing with this in its practicalities, and I very much look forward to the select committee process. Thank you to all members for your support.

Bill read a first time.

The question is, That the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill be considered by the Finance and Expenditure Committee.

Motion agreed to.

Bill referred to the Finance and Expenditure Committee.