Buying a unit title property
Unit title properties are becoming an increasingly common form of property ownership in New Zealand. It’s important that you understand the differences between buying a stand-alone house, a unit title and a multiple dwelling. Here are some points to consider before you purchase a unit title property.
What is a unit title property?
- A multi-unit building often has several dwellings contained within it,
e.g. an apartment block. Or it can be a mixed-use building (mixed commercial and residential) or a building where two or more units are connected by a common party wall. If you buy a unit title property it means you own a specified part of a building, such as an apartment, and share ownership of common areas with other households. These can include lifts, lobbies, stairs, driveways, swimming pool, gym or communal garden areas.
- It’s vital that you obtain legal advice before committing to purchasing a unit title, so that you clearly understand what you’re buying. Owning a unit title involves a different set of rights and responsibilities from traditional house and land ownership.
- The Unit Titles Act 2010 is the law that governs building developments in which multiple owners hold a type of property ownership referred to as a unit title.
- Owning a unit title property involves living alongside others in close proximity. Accepting that there may be some restrictions on what you can and can’t do to your unit and within the development will be essential if you are to enjoy your new home. Everyone else living in the unit title is subject to the same rules. This leads to the best outcome for everyone.
Pre-contract settlement disclosure
- The owner must provide you with a pre-contract disclosure statement before you purchase your unit title property. This will cover all you need to know about the unit title and specific information about the unit title you are buying. Make sure you read and review it carefully.
The body corporate
- Once you purchase your unit title property you will automatically become a member of the building’s body corporate. The body corporate owns the common property (e.g. gym facilities, lifts and swimming pools) and has rules about how you can use your unit and the common areas. Because a body corporate plays such an important role in any unit title development, you need to find out how the body corporate operates.
- As a unit title unit owner, you’re entitled to contribute to decisions ab0ut the building by being a part
of the body corporate meetings. To exercise your right to vote you must have paid all your fees.
- In situations where repairs to dwellings will affect other parts of the building, the body corporate
usually has to agree before repairs can proceed. A unit title owner may make any alterations, additions,
or improvements to their unit providing these are inside the walls of their unit boundary and do not materially affect any other unit or common property.
- You’ll need to pay levies on an annual basis when you become the owner of a unit title property.
- These levies cover items relating to the overall building, including insurance, repairs and maintenance, management, leasehold costs if any, and all matters relating to common property. Make sure you find out what these levies will be before proceeding with your purchase. They should be included in your pre-contract disclosure agreement.
Top tips to consider before buying a unit title
- Talk to your lawyer, do your homework and understand exactly what you’re buying into before
you make an offer.
- Review the title and the survey plan for the development with your lawyer to determine what’s common property and what’s not, and
any other matters on the title that will affect your use and enjoyment of the unit.
- Body Corporate – check how it’s managed. Ask to see recent meeting minutes and the body corporate’s financial reports and budgets. These will show you how the body corporate operates, identify any issues and how they were resolved. Always check the body corporate rules and
make sure they comply with the Unit Titles Act 2010.