Williamson Maurice: Unit Titles Bill — First Reading 
Williamson Maurice: Unit Titles Bill — First Reading 
[Volume:652;Page:1722] 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 I am happy to take a call on the Unit Titles Bill. I will take a full call because I think there are a number of issues to address. I am happy to say that from the outset officials at the Department of Building and Housing came to me and said they thought this legislation could easily go through in my name because it has implications for my portfolio or that it could be transferred to Mr Heatley the Minister of Housing. 
I did not take too long to decide about that. I thought it was best to hand it to the Minister of Housing because frankly I thought it related way more to the role that Mr Heatley fills. As the Minister of Housing he deals with tenancy and other matters. So I thought the bill should be his rather than be under the building and construction portfolio which is more to do with the physical bricks and mortar. Having said that there is some crossover between the two portfolios and I am delighted that Parliament is finally addressing the issue. 
The Unit Titles Act was passed in 1972 and in 1972 I was a young university student at Auckland University. In downtown Auckland—now so ably represented by Nikki Kaye—there were almost no residential buildings in the city at all. There were some State-owned flats in Greys Avenue I think but apart from that and a couple of halls of residence—O’Rorke Hall and the other one in Symonds Street—the actual idea of big apartment blocks in central Auckland just did not exist. Even in the outer suburbs a block of three or four flats joined together was a reasonably big development in terms of multi-ownership. 
We have really changed the way society functions. If we go into central Auckland now we see that there are apartment buildings for Africa. Everywhere we look around Beach Road I think it is—down the bottom on the way to the railway station—there is nothing but apartment building after apartment building. Let me share with the House some of those numbers. I am told that by September 2006—this is a couple of years out of date but it is still worthwhile hearing—there were 15774 unit title developments in New Zealand comprising 88800 units. That is quite amazing. It is amazing that we have gone from having almost none to having about 88800 units by 2006—and it has not stopped. 
It is fair to say that that rate of development has pretty much slowed down right now because of the economic downturn and the financial crisis that the world is facing. In fact a lovely clip I saw on the news the other night said there is such a financial crisis in New York that the Mafia has had to lay off five judges! When the economic crisis is over we will see the building sector come back into its own and we will see a number of big apartment buildings being built in downtown Auckland as we will in Wellington and maybe even in other parts of New Zealand. It is estimated I am told that around 500000 New Zealanders will be living in apartments townhouses or high-rises within 50 years and that sort of demographic indicates that it was time to get on and do something. 
So what is the problem? Well the problem is that when there are multiple owners of a large building such as a large apartment building there has to be some legislation that governs how the ownership of that building works. There has to be legislation that governs the rights of the individual apartment owners; the rights of the collective body corporate to override the rights of an individual who does not like what is going on; and how we get some form of the democracy we in Parliament so love whereby a majority of people can have a say on what goes on. I know it upsets some people but a minority view may get overridden. 
The whole point of this legislation is to provide some clarity in areas where there is no question that the legislation was quite murky in the past. Legislation passed in 1972 would not have had any chance to see the society we live in today and to look at how to deal with it. This bill establishes a real and meaningful legal framework for ownership by different parties and it establishes a clear and simple process for building unit title developments and for technical details for developers. That is important as well. 
We are all aware of what other people call “leaky homes”. I do not refer to them as that; I always call them “rotting homes” because “leaky homes” is not the right phrase for them. We know that there are rotting buildings in those multi - unit title developments. Some of those owners are really in strife because the legislation does not give them the power to get agreement across body corporate members. There have to be only one or two standouts who are demanding something different and the majority can suffer. Getting some clearness and simplicity into this legislation for all the people involved—the developers the individual owners and the group appointed to represent a body corporate’s rights and responsibilities to outside organisations—is a really good step in the right direction. 
The bill clarifies the responsibilities of unit owners and bodies corporate it will ensure sound management practices and it will protect long-term capital values. I think that is another important thing. No one in the House would deny that those are worthy aims and it is good to see the multiparty support that the bill has been enjoying. I am convinced that these aims will be fulfilled in the legislation. If indeed the duties and powers of unit owners body corporate managers and developers are made obvious then I think disputes will be dramatically minimised. There is a demand for that clarity. If people know what the duties and powers and aims of those people are it is very unlikely that there will be anywhere near the number of disputes that there would be if it was murky and no one could tell what was going on. I think the reduction in disputes across the board will be one of the best things that come out of this. Having said that I think it is likely that there will always be disputes when large numbers of people are involved. In any large organisation there will be people who will think they have either been disenfranchised or treated badly and so on. 
The bill provides recourse for dispute resolution by extending the jurisdiction of the Tenancy Tribunal to hear and determine most disputes related to unit titles and that is a good step in the right direction. I do not think anybody could deny that. There is a monetary limit of $50000 for this so the Tenancy Tribunal can hear cases that relate to a sum that is meaningful. The bill has quite specific definitions of what one does from that point upwards. Beyond the $50000 monetary limit jurisdiction is given to the District Court. It can hear a dispute relating to sums of between $50000 and $200000. Jurisdiction then moves to the High Court if the dispute concerns a sum in excess of $200000. 
Those are quite sensible levels I would have thought. In terms of a dispute concerning more than $200000 people will need a fairly robust legal process to go through a large claim like that. But if the amount is less than $50000 taking the dispute to the Tenancy Tribunal and hopefully getting through the levels of adjudication and all the other support that is provided is probably the best way to go. 
The bill provides a clear flexible governance structure with reduced voting thresholds for bodies corporate to make decisions. I think I said that before. What I think is really important is that it stipulates that a 75 percent composite vote is required. Now 75 percent is I guess random. Some people might think it should be 66.6 percent—two-thirds—and some might want it to be 90 percent. In the end after a lot of consultation and development the 75 percentile mark was set. It is pretty hard to get 75 percent of all parties in a particular large building to agree to a particular regime if it is a stupid or nonsensical regime that is being proposed. 
I think that provision allows for good decisions to be made but it takes away that one rogue element that might hold out for some grossly unrealistic or ridiculous settlement. That person could hold it up for the rest and resolution could take for ever. In some cases that is happening right now and it is unfair to everybody. So yes the rights of the minority might be getting trampled on a little bit but frankly getting the majority of people signed up to something agreeing with it and going with it is great.