Body corporate governance
Collectively, all the unit owners in a unit title development make up the body corporate and every new unit owner automatically becomes a member of the body corporate.
The Unit Titles Act 2010 (the Act) provides a structure for the governance and management of a body corporate. The Act sets out certain rights and obligations of unit owners and powers and duties of the body corporate.
What are the body corporate’s powers and duties?
The body corporate is responsible for a range of management, financial and administrative matters relating to the common property and the unit title development as a whole. These functions mainly relate to the things all unit owners have a shared interest in – land, money, other property – which is why all unit owners are members of the body corporate.
The body corporate has a number of powers and duties, which are outlined in section 84 of the Act. Some of these include:
- managing, maintaining and repairing the common property, as well as shared building elements and infrastructure that might not be common property
- establishing and maintaining a long-term maintenance plan
- keeping and maintaining a register of all unit owners
- keeping accurate accounting records
- taking out insurance that covers the development
- levying contributions on owners to fund the operation of the body corporate
- providing documents such as financial statements, meeting minutes and insurance details to unit owners
- making and enforcing the body corporate rules.
Can the body corporate delegate any of its duties and powers?
A body corporate can delegate some of its duties and powers to a body corporate committee, subject to certain restrictions.
Body corporate committee
A body corporate committee is a subset of the body corporate and is elected by the body corporate. The body corporate may delegate most of its duties and powers to a committee, and can select which of those duties and powers to delegate. The body corporate committee must report regularly to the body corporate on its activities.
The role of the committee can vary: it depends on what the body corporate directs it to do. The body corporate will issue a formal notice of delegation to committee members when they are elected, which tells them exactly what they are responsible for doing.
How is a body corporate committee formed?
The body corporate committee is elected by the owners at each Annual General Meeting (AGM).
If a unit title development has 10 or more principal units the body corporate must form a body corporate committee unless it decides not to by special resolution.
A unit title development with fewer than 10 units may form a committee if the members wish.
How are body corporate committee decisions made?
Any decisions made by the body corporate committee must be decided by a simple majority of votes.
Professional body corporate manager
There are a number of different professionals that provide services to bodies corporate. They are not members of the body corporate, rather, they are contracted to provide specific services. They tend to do many of the administrative tasks on behalf of the body corporate, such as organising meetings, preparing financial statements and collecting levies.
Appointing a body corporate manager does not in any way affect either the individual or collective property rights held by a unit owner.
Check out the information sheet “The body corporate - an introduction” for more information.
Body corporate operational rules
The body corporate operational rules help the body corporate govern the unit title development. All unit owners, occupiers, tenants and the body corporate must follow the body corporate operational rules that apply to their development.
Default operational rules are set out in the Schedule 1 of the Unit Title Regulations 2011. The default body corporate operational rules apply to all unit title developments, but bodies corporate are able to revoke, amend or add to the default rules.
For existing unit title developments, the new operational rules under the 2010 Act are subject to a 15 month transition period, meaning they do not apply until 1 October 2012. During the transition period, the development’s existing body corporate rules under the Unit Titles Act 1972 will continue to apply, unless the body corporate decides by special resolution to adopt the new operational rules early. However, many of the provisions in these existing rules will be overridden by the 2010 Act (see the booklet “A Guide to Body Corporate Operation Rules” for more information).
Unit owners should make sure they have the most up-to-date copy of the operational rules that apply to their development.
Where can I find more information?
For Unit Titles advice and information call 0800 UNIT TITLE (0800 86 48 84), visit our website www.dbh.govt.nz or email us at firstname.lastname@example.org