Unit Titles Bill — First Reading 
Unit Titles Bill — First Reading 
[Volume:652;Page:1713] 
Unit Titles Bill 
First Reading 
Hon PHIL HEATLEY (Minister of Housing) 
: 
 I move  
That the Unit Titles Bill be now read a first time. 
 At the appropriate time I intend to move that the Unit Titles Bill be considered by the Social Services Committee. The Unit Titles Act 1972 is the primary legislation that governs multi-unit developments such as apartment blocks townhouses and office buildings. The Act covers the creation and ownership of unit titles by unit owners the establishment of bodies corporate to manage developments and the rights and responsibilities of unit holders and bodies corporate. 
I point out by way of background that that Unit Titles Act 1972 was designed for the simple small-scale residential flats that were prevalent at the time. Often such developments would number—would you believe it—only two or three units. But times have changed. Unit title developments are now much larger and more complex and they are used to meet much more diverse needs. 
The demand for intensive apartment-style living has grown over the last 30 years and the market has responded with some unit title developments containing more than 100 units. Some developments are additionally complex with retail shops bars or restaurants located on street level and apartment dwellers residing above. Unit title developments are also growing in sheer number. It is estimated that there are approximately 16500 unit title developments in New Zealand comprising around—would you believe it—96000 units. This trend is expected both to continue and to accelerate particularly in the Auckland region where it is estimated that within 50 years half a million people will be living in apartments townhouses and high-rise buildings. 
If we compare the existing legislation with its small-scale design with the current needs of the market we see clearly that the 1972 Act does not provide a sound basis for the creation and sustainable management of intensive multi-unit developments. Its inadequacy in the modern environment means among other things that buildings can be insufficiently maintained that bodies corporate can be hampered by time-consuming decision-making processes that disputes between owners are seldom resolved and that there is little consumer information or consumer protection. Furthermore the process for building developments can be inflexible and overly complex. 
The Unit Titles Bill is the result of a comprehensive review of the Act which was announced in November 2003. The review was initiated in response to widespread views held by the Law Commission the Auckland Regional Council and other sector stakeholders that said a review was critical. The Department of Building and Housing has worked closely with officials from the Ministry of Justice and Land Information New Zealand as well as with a cross-section of key stakeholders. 
I am pleased to report that there has been ongoing and widespread support for both the review process and the direction of the proposed changes. This has been demonstrated by the continued engagement and professional goodwill of key stakeholders such as the New Zealand Law Society the Property Council of New Zealand and the New Zealand Institute of Surveyors. The views of those who live and work in unit title developments have also been critical in informing the development of the bill that I am now putting before the House. 
The bill is a fundamental rewrite of the existing legislation. Its key changes include promoting sound property management practices. Sound property management practices are essential to preserve the investment people make when they buy a unit in a development. Best practice will be encouraged by the following provisions. 
Bodies corporate will be required to develop long-term maintenance plans to protect the capital value of the development and the capital value of units within the development. This means owners will be able to plan for big-ticket maintenance items and pay a regular amount over time thus avoiding the need for large one-off lump-sum payments for items such as replacing a lift or for exterior painting. A body corporate needs to be able to act quickly and decisively on behalf of all unit owners and for the good of the development as a whole when repairs and maintenance need to be done. 
This bill provides that the body corporate will own the common property which includes the parts of the development owned collectively. Its responsibilities for repair and maintenance will be widened to include building elements and infrastructure that affects more than a single unit. This will mean for example that if an apartment block has a leaky roof it will be the body corporate’s responsibility to fix it rather than the responsibility of the owner of the top-floor apartment. 
 The second major change will make joint decision-making by the body corporate manageable. A streamlined simple and easily managed way for decisions to be made by all unit owners collectively is a critical component of this legislation. This bill provides just such a process. The cumbersome requirement for unanimity in body corporate decision-making will be removed. Instead decisions will be able to be made based on 75 percent agreement by those who vote at a body corporate meeting. This for example will make it easier to redevelop a unit title property that has become economically unviable or to organise to fix the roof or alter a unit plan. It will also prevent hold-outs and will mean that unit owners who do not vote will not be able to hold up the process. 
Another fundamental key change is in the area of dispute resolution. Many disputes in unit title developments are created because people just do not know what their rights and responsibilities are when they buy an apartment. Owning and living in an apartment comes with a raft of rights and responsibilities that are not usually necessary when one owns a stand-alone house. This bill takes a first step of clarifying and simplifying the rights and responsibilities of unit owners and the obligations of bodies corporate. This is a crucial part of ensuring that disputes do not arise in the first place. But when disputes do arise they will be able to be dealt with through mediation or adjudication through the Tenancy Tribunal in the first instance rather than solely through the courts. This will make resolution faster cheaper and more appropriate to the disputes that tend to arise in multi-unit developments. 
The fourth key change is around the disclosure environment. Educated consumers are a central principle of the bill. Enabling people to make informed and confident decisions helps to ensure that the management of developments runs smoothly and that fewer disputes arise. [ 
Interruption 
] There will not be any violence such as the violence shown by the Hon Trevor Mallard on a number of occasions—we will not see that sort of violence in the unit titles dispute process. 
Disclosure requirements will be introduced for purchasers unit owners and bodies corporate to enable them to make informed choices. For example developers will be required to provide information on the construction systems and infrastructure of buildings to the body corporate. This means that the body corporate will be able to make sound decisions when repair and maintenance needs to be undertaken. Purchasers will be entitled to a list of information they can view on request such as body corporate rules audited accounts and maintenance plans. General information on unit title developments will also be available. This means that there will be no surprises—purchasers will know exactly what they are buying into and what their rights and responsibilities are. 
In terms of technical changes it is important to ensure that the process of building unit title developments does not impose undue constraints or increased costs on developers or call for time-consuming changes and alterations. Each subsidiary body corporate will be a member of a head body corporate responsible for the overall management of the development. 
This bill brings our unit title law up to date in wide-ranging areas. It addresses the changes that have occurred in property development over the past 36 years and it brings our unit title law into the 21st century. The bill will provide broader and more adaptable ways of setting up and managing multi-unit living both now and in the foreseeable future. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 Naturally Labour will be supporting the Unit Titles Bill. 
The speaker who has just resumed his seat Phil Heatley has not even dotted one of the i’s or crossed one of the t’s in respect of this bill; all the work was done by the Hon Shane Jones. The previous speaker has done nothing. It is very important that we acknowledge that. It is also very important that people make submissions when this bill goes to the Social Services Committee. You see since the original bill became law in 1972 lifestyles have changed dramatically in New Zealand. Having lots of apartments— 
Hon Phil Heatley 
: I already said that George. 
Hon GEORGE HAWKINS 
: Well the member may have said it but he probably read it somewhere; he does not know it. 
This bill makes sure that the law keeps up with the changes in people’s lifestyles. I say to the Hon Phil Heatley if he is awake—he probably went to sleep during his own speech—that this bill will be very important for people who live in apartments that have the leaky homes syndrome. Under the Unit Titles Act people needed to get a 100 percent agreement in order to make decisions; now only a 75 percent agreement will be needed. That will be a huge change. It will be a change that I think people will welcome. 
People who live in apartments—many of them are young people attending university—may have had those apartments bought for them by their parents and they do not understand the Act. This bill will make things far better for them. The fact that we have more than 16000 unit title developments in this country means that there will be widespread interest. Between the time this bill is read a first time and then sent off to the select committee Mr Heatley should get someone to read it to him because I do not think he understands it. He got up and read a speech prepared by his officials and the pity was that he did not have a dress rehearsal; he got muddled up as he went along. I am not going to waste my time in the Chamber going through all this other than to say that I hope the select committee will advertise this new bill very widely because many people need to know about it. They need to know what it will mean for them as individuals so that they can make good submissions on it. One of the very good things about Parliament is the select committee system where people can have a say. 
I conclude by thanking the Hon Shane Jones because he actually did all the work. I am sure that Phil Heatley may try to grab hold of the bill and promote it as his greatest achievement—even greater than the 69 State houses he will build this year which is actually down on the number Labour would have built. This bill belongs to people who are living in apartments and feel trapped in the present situation. The bill will allow them to be more widely dealt with. I am sure the New Zealand Law Society will come and make submissions and I am pleased by that. I am sure the select committee will ask the society to make submissions as well as many other groups. I welcome this bill. I think the repeal and replacement of the Act is long overdue. Once again I thank Shane Jones. 
CHRIS AUCHINVOLE (National—West Coast-Tasman) 
: 
 The Unit Titles Bill is a bill that I am pleased to support. The Minister of Housing Mr Heatley gave a very detailed and exact speech and one that was really good. The bill addresses and corrects the problems that developed under the Unit Titles Act 1972. That Act needed modernising and I am glad that this is something we are in the process of achieving. The Act was not bad legislation when it was first introduced but the demands of the modern context make it necessary to repeal and replace that legislation with something more attuned to present demands. In essence this bill addresses the changes that have occurred in property development over the past 36 years. 
The legislation enacted 36 years ago was designed for simple small-scale developments in discrete areas and does not adequately provide for the range complexity and size of developments today. The Unit Titles Act of 1972 governs building developments where multiple owners hold unit title property tenure. This is defined as being a specific part of a building such as an apartment as well as the shared ownership of common property such as lobbies and driveways. Such building developments are typically apartment blocks townhouses office blocks and industrial and retail complexes—malls for instance. As of September 2006 there were an estimated 15774 unit title developments comprising 88817 units and the number of unit title developments is rapidly increasing. Changes need to be made as the trend towards unit title development will be continuous and will accelerate. It is estimated that over 500000 people will be living in apartments townhouses and high-rise buildings within 50 years. 
Hon Darren Hughes 
: Who estimates that? 
CHRIS AUCHINVOLE 
: The people who are involved in demography statistics. The member used to be the Minister of Statistics; he should know. 
Hon Darren Hughes 
: And will be again. 
CHRIS AUCHINVOLE 
: The member can live in hope. I thank the member for that contribution. It could well be that the honourable member— 
Chris Tremain 
: That is the height of his aspiration. 
CHRIS AUCHINVOLE 
: That is the height of that member’s aspiration—to go back to where he was—and we wish him well. 
Clearly it is imperative to modernise the Act and this bill is not something that has been put together lightly. The bill is the result of nearly 5 years of a review and consultation process. It was put on the Order Paper last August but since then there has been little action on it. National has made this bill a priority and is committed to ensuring its passage through Parliament. I will reiterate the key features of this bill which in my view succinctly summarise its positive features and how it provides clarity in areas that were previously a little murky. 
This bill establishes a real and meaningful legal framework for ownership by different parties and establishes clear and simple processes for building unit title developments and technical detail for developers. The Minister has already given an amount of this detail and a Labour speaker asked for further clarification. That is why we are giving it now. Clearness and simplicity are understood as things that should never be made unnecessarily complicated. When something is clear and simple it can be easily followed and hence more progress can be made. I am sure that the developers will be grateful for the transparency of the new guidelines which will assist them a great deal in their work. If we can make their lives easier then I am sure this will aid overall progress. 
This bill aims to encourage a holistic approach to the management and maintenance of unit title developments. It will clarify the responsibilities of unit owners and bodies corporate ensuring sound management practices and will protect long-term capital value. These are highly worthy aims and when I investigate the minutiae of this legislation I am convinced that these aims will rapidly grow to outcomes. If indeed the duties and powers of unit owners and the body corporate managers and developers are made obvious then this will minimise disputes about rights and responsibilities which is always a good thing. It will also reduce costs. 
However speaking of disputes one part of this bill that is very satisfying to see included is the introduction of a dispute resolution process for unit title matters covering education information mediation and adjudication. This will enable disputes to be dealt with swiftly comprehensively and cost-effectively. This bill provides for recourse for dispute resolution by extending the jurisdiction of the Tenancy Tribunal to hear and determine most disputes related to unit titles. The monetary limit for this is $50000 and the tribunal may not hear cases relating to the title of the land. The bill provides jurisdiction for the District Court to hear cases involving monetary amounts of between $50000 and $200000 and jurisdiction for the High Court to hear cases involving sums in excess of $200000 and includes those cases involving the title of land. As one can see the bill provides comprehensive cover for the full range of possible disputes. 
The bill will provide a clear flexible governance structure with reduced voting thresholds for bodies corporate in order to make decision making more easily managed and to enable the body corporate to act in the interests of the majority of unit owners. I can envisage the concerns of some people in regard to reduced voting thresholds. Reducing voting thresholds by their very nature can lead to more contentious measures becoming more likely to pass. I do not consider though that the reduction of voting thresholds in this bill will have that effect as I consider the previous requirements were too rigid. For example in the Unit Titles Act 1972 there were a number of situations in which a unanimous resolution was required. I will quote one as an illustration. Section 17(1) states: “Any instrument evidencing any transfer lease or grant of easement affecting the common property or land that is to become part of the common property may be executed by the body corporate if the transfer lease or grant has been approved by unanimous resolution of the body corporate.” Section 42 in Part 3 did provide for slightly less restriction stating that if 80 percent voted in favour of the resolution this could be taken by the courts and if the courts so ordered the resolution could be deemed to be passed unanimously. 
However with the advent of the Unit Titles Bill none of this will be required. The bill stipulates that 75 percent composite votes are required. We say that 75 percent is stringent enough. It is still a high threshold and will allow the body corporate to act in the interests of the majority of unit owners. 
Hon Maurice Williamson 
: How does the member know all of this? 
CHRIS AUCHINVOLE 
: I have done my work on it. Actually we have covered this issue at various times over the last 3 years. In not having to take the matter to the court when one lone vote disrupts the passage of resolution we are removing unnecessary delays and costs. 
We in the National Party went into the election promising to streamline and simplify regulations. This is what we are in the process of doing with the Resource Management (Simplifying and Streamlining) Amendment Bill and that is precisely what we are doing with the Unit Titles Bill. We are ensuring the decision-making process is not hamstrung by vexatious and frivolous objections. We are about getting things done. 
Paul Quinn 
: Say that again. 
CHRIS AUCHINVOLE 
: We are about getting things done! The Unit Titles Bill is a lucid and cogent bill. It is an excellent replacement for the Unit Titles Act 1972. The Act needed modernising. This bill does precisely that. It was an Act that analysis has demonstrated was no longer adequate to deal with the range of matters. 
Hon David Cunliffe 
: Well done Shane Jones! 
CHRIS AUCHINVOLE 
: Let us refer to Mr Shane Jones—a future Prime Minister if ever there was one. In May last year Shane Jones said: “The Unit Titles Bill will streamline development processes and allow flexibility for those who are building the really big developments. This will mean up-front costs are reduced and developers can make changes to their plans more easily.” I applaud those comments of Shane Jones. It is the mark of a true political leader. Put some water on him; he will grow. I am pleased the Government is making this bill a priority as the Act is certainly overdue for a shake-up. 
Hon MARYAN STREET (Labour) 
: 
 I rise to take just a short call on the Unit Titles Bill because there is no need to prolong the House’s time on this measure. We are in agreement on this bill. There is a sublime moment in the life of an incoming Government when it does not have to do any work of its own; it simply has to put through and tidy up by a third reading legislation that has already been prepared by the previous Government. 
I am delighted that Mr Quinn was pleased to say how good this legislation is. I am delighted that he is so much in support of it because it was a Labour Government measure. I am delighted that Mr Auchinvole made reference to the point that the bill is about reducing some compliance measures and taking away red tape because that is the result of a Labour Government measure. 
I will raise a couple of points. The first is that yes Shane Jones did the work on the bill. I also congratulate quite sincerely the Minister Phil Heatley on bringing it through to the House. The Labour Opposition will support the bill of course because it is a sensible measure and the incoming Government has seen that. 
I will refer to a favourite part of the legislation—at the risk of this speech sounding like a Committee stage speech—if members will indulge me for a moment. A favourite part is the bits that relate to voting: clause 83 and the following clauses. I refer to the threshold for voting for bodies corporate which is important. It was one of the most significant changes we could make in modernising the legislation applying to unit titles. Numerous people up and down this country having gone into apartments and units will attest to those occasions when getting to a unanimous decision with the body corporate was just impossible. Individuals hold out on agreement of things that have to move forward whether it is a roof repair new paint job colour scheme or whatever. One or two people hold out on a decision that the majority is in favour of and therefore impede the progress and I presume the comfort in many instances of the people who own the principal units. 
The reduction of the threshold on special resolutions to 75 percent—although general resolutions can be carried by a majority—is still a high threshold. It is not simply a matter of 50 percent plus one who agree with a change the body corporate is considering; it is in fact a very substantial majority. Three-quarters of the body corporate principal unit holders need to agree before a change can be made. That will be really helpful because there have been instances when people have held out and have been very difficult to move when trying to arrive at a resolution about a repair maintenance improvement or service issue for a body corporate. 
But just to be sure in relation to the 25 percent of people who may disagree a dispute resolution process has been put in place. Access to mediation and arbitration around that process is a good measure so that a minority view is not excluded or completely railroaded by the majority but there is room and provision for a process to arrive at the resolution of disputes. That is an improvement. 
Yes the 1972 legislation is now anachronistic. It is unsuitable for the kinds of developments we have seen emerge in the intervening years and this bill will bring it up to date. If there are improvements to be made on this bill then they will be made at the select committee. If there are improvements to be made even after the substantial consultation process that was engaged in prior to the drafting of this bill then those improvements can be made at the select committee. I commend the bill to the House. 
SUE BRADFORD (Green) 
: 
 On behalf of the Green Party I will make a brief call in support of this bill. We are pleased to see the bill finally come back to the House. When Labour originally introduced the bill last year we were delighted to support it then and we are really pleased that National has picked it up. 
It is certainly high time for this as the original Unit Titles Act 1972 is of course some 37 years old. I am sure that all the key stakeholders in this area will be relieved that this legislation has been given some priority in the new Parliament. It is also good to see that the original review process involved a lot of the key groups involved in the sector—for example bodies corporate themselves local and regional authorities developers surveyors people like the Law Society building surveyors the Insurance Council and the Real Estate Institute. There have already been some 148 submissions that were received as part of the review process that formed this legislation so I hope that this bill will be a sound reflection of a whole lot of work that has already happened. 
In terms of the actual content of the bill as far as we can ascertain at this stage we are in support of all the key provisions. One provision we are particularly pleased about is that the need for unanimous body corporate decisions will be removed so that in future only 75 percent agreement will be needed by those who vote at body corporate meetings. One is particularly put in mind of the leaky buildings situation where people are desperate to try to get a decision so that they can make progress on solving leaky building problems. Where people are holding out on that it has a detrimental impact on everybody involved in the building. At the moment it takes only one person to hold out for a whole process to be stopped. So that provision is really good though I note also that John Gray from the group that has done a lot of work on leaky buildings does have a few concerns that at times in terms of the people holding out it has been beneficial in relation to what needs to happen. I am sure that the select committee will look at that. 
Another area we are pleased about is the shifting of adjudication from the courts to the Tenancy Tribunal. This is really good in the context of access to justice but it does need to be accompanied by an amendment to the Residential Tenancies Act to permit representation for those who are taking cases to the tribunal. Apartment owners will not always have the expertise needed to present their own case and this is certainly similar to changes that we had hoped to see in the residential tenancies amending legislation but which I believe National is planning to take out. We believe that anyone going to the Tenancy Tribunal should have the right to qualified representation because in most cases tenants—and in this case unit title owners—do not have the legal expertise or background to be able to present their cases adequately. I am certainly hopeful that during the select committee process this will again be something that we can look at. 
The whole question of unit titles has become a lot more urgent in recent years with the huge increase in developments. About a year ago there were over 95000 units. Of course many of these were in Auckland where ever-growing numbers of people live in this way. So it has become a critical issue that we change the laws so that people are protected at all stages of the transaction and we do not see some of the unfortunate situations that have arisen in the past. The Green Party will be supporting this legislation. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 It is entirely appropriate that I stand here today as a Maori woman to talk to the Unit Titles Bill. Our whakatauaki our tribal traditions have always made explicit the connection between wahine our women and whenua our land. As we say: “He wahine he whenua ka ngaro te tangata.”—“For a woman and land men perish.” Women will be revered and respected as te whare tangata—literally the house of people. Our words are interchangeable—to be hapu also means as well as “subtribe” “to be pregnant”. Whanau relates to the act of giving birth as well as to the family. And when we give birth our whenua the placenta or afterbirth and the pito the umbilical cord are returned to the whenua the land making forever the link between that newborn baby and Papatuanuku—Mother Earth. 
I give this very brief summary of our world views on land as a means of an introduction to the importance of land to Maori. Just as we must value every woman as the bearer of the iwi—the generations to come—we must also guard and protect Mother Earth with that same reverence. It is because of the strength of our beliefs that our people have literally walked the land in hikoi acknowledging the special cultural spiritual emotional and physical significance of this relationship. We are tangata whenua people of the land; the land and people are inseparable. 
So we take great interest in the proposal in this bill to update the law regarding the subdivision development and management of land. We take great interest in the issues around ownership and management of land buildings and facilities and we will always be concerned to see whether any developments that are put forward will diminish Maori rights or whether they can create opportunities. In our world view land is a taonga tuku iho a treasure to be preserved respected and protected. If land and buildings are to be subdivided into unit title developments owned by unit holders we want to be assured that tangata whenua are fully involved. 
Those members who have looked at the Order Paper over the last few days will have noticed that sitting at No. 5 place for members’ bills is a Maori Party bill generated by the call that no more Maori land should be taken under the Public Works Act. In that bill my colleague Te Ururoa Flavell is recommending that Maori owners be given the first right of refusal to purchase land that the Crown no longer requires for use as intended. I am interested to see whether in the Unit Titles Bill there will be any recognition made for land taken under the Public Works Act and never returned. 
In this bill today we are being offered the opportunity for a deviation from section 11 of the Resource Management Act which applies to restrictions on the subdivision of land and from Part 10 of the same Act which is about subdivision and reclamation. The question that raises for the Maori Party is whether it creates the potential for confusion as another critical part of section 11 is the requirement that any subdivision that is to be considered for Maori land can be dealt with only under Te Ture Whenua Maori Act 1993. We will be looking for clarity therefore on section 11. We wonder what other considerations may need to be made in relation to Maori land including lands upon which Treaty settlements are currently in negotiation. 
As I said earlier the importance we place on land as tangata whenua is all-encompassing. Our land provides us with a tangible link to our tupuna. It is the site of our genealogical connection to all of our bloodline so we take seriously the role of guardianship our kaitiakitanga responsibilities on behalf of those who have come before us and those who descend from us. But it would be stretching the rainbow to say that the management of the multiple ownership of land is easy. Indeed the ongoing fragmentation of multiple ownership is a direct result of the individualisation of title and of a failure to recognise the principles of collective use and occupation. Maori communities on multiple-owned land will also often not face the standard market conditions that other landowners face. They may have limited access to markets capital is often scarce information is frequently incomplete and the requirements for the decision making of the collective are highly complex. 
There are currently serious problems with the subdivision of Maori land and particularly with the fact that the Maori Land Court will not agree to the partition of Maori land. Getting an application for an individual partition of land through is difficult because of the thresholds of agreement needed. We need to find another way in which to protect lands from misuse and/or sale while also allowing whanau and hapu to develop papakainga housing projects if there is a reasonable level of consent. One way might be to identify land suitable for a Maori housing scheme and to lower the thresholds for the partitioning of those lands while also placing restrictions on the sale of the partitioned land. 
At present under the law there is also no capacity to enable the owners of Maori customary and freehold land in a particular area or papakainga to join with another one and collectively manage their lands—to do things like restrict the sale of land in order to maintain the integrity of the papakainga. The question that needs to be put to the select committee is whether the bill can be modified to take into account special Maori needs to protect their papakainga. This is a potential opportunity offered by the bill and we will be interested to see how submitters address it. 
Another approach we as a party have considered is to introduce proposals to enable leasehold titles to be commercially bankable. We are interested in the possibilities of third-party financial institutions that may be interested in investing in multiple-owned land so we are interested in the management proposals around bodies corporate that would bring together all unit owners in a development to cooperate and manage unit title developments. Suffice it to say we have as many proposals and solutions as there are issues inherent in the development of land and resources to better enable whanau hapu and iwi to advance on a socially and economically sustainable basis. So we are extremely interested in the evolution of the modern framework that the Minister suggests is needed to achieve the joint ownership and management of land buildings and facilities. 
Of course we are always going to be wary of the actions of the State as they pertain to the upholding of the rangatiratanga of our land. We have to think back only to the sale of prime Coromandel land at Whenuakite the controversy regarding Rangiputa Station on the Karikari Peninsula or the proposed sale of the Taurewa land blocks to know how deeply our people feel about the mismanagement of land and land disposal processes. We will be interested to see whether Hauraki Tuwharetoa Ngati Kahu the Tainui Waka Alliance the Maori Council and other iwi who have been so closely involved with these activities will take up the opportunity to scrutinise this bill and to share their views about whether it creates opportunities or whether in fact it does threaten Maori rights. 
Finally I will leave with the oft-quoted words “Whatungarongaro he tangata toitu he whenua.”—“Each generation passes in its turn but the land remains.” We are absolutely dedicated in our pursuit of protecting the integrity of our land but we are also absolutely dedicated towards the possibilities of development and opportunities for advancing the social economic and cultural progress of tangata whenua. We are not satisfied that this bill adequately facilitates Maori housing development and we will also be keenly listening to the Minister in subsequent stages to hear how those aspirations will be meet. We will support this bill in order to enable the korero to be heard. 
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. 
NICKY WAGNER (National) 
: 
 I rise to support the Unit Titles Bill and it is good to see that it has been so positively received in the House today. It is well and truly time to update and streamline the Unit Titles Act which was originally passed in 1972. 
Over the last 36 years living trends have changed dramatically. We have just heard from Maurice Williamson about what Auckland looked like in 1972. We can see the vast change in the way people live. More New Zealanders are living in cities; many more are living in higher-density suburbs and in inner-city apartments. Multi-unit and high-rise apartment developments have become common and very popular. It is a modern trend both locally and internationally and it is forecast to continue. Many more New Zealanders are expected to move into apartments townhouses and high-rise buildings over the next few years. 
The original 1972 Act was designed to manage developments in the time when they were mostly pretty simple and small. Back in the 1970s even the language was different. Unit titles were most commonly used when one was building a couple of ownership flats—that is a term from the 1970s—and for that purpose the Unit Titles Act worked well. But as bigger and more complex multi-unit developments became common changes needed to be made. 
This bill is the result of an in-depth review of the Act undertaken in 2004 but it has taken another 5 years and a change of Government to bring action. It was interesting to hear Maryan Street talking about Shane Jones’ contribution to this bill. It is just a pity that something that could streamline and cut bureaucracy was not brought to the House. 
The aim of this bill is to streamline and to simplify and it is part of National’s push to simplify all regulations and to cut through inefficient bureaucracy. The aim is to provide increased flexibility and to produce simple and effective legislation for the setting up and management of unit titles and multi-unit living now and into the future. The main problems identified with the Act when it is applied to larger and more complex development revolve around joint decision-making building maintenance—and of course we see that continuing with the rotting homes story—financial management and also consumer protection and dispute resolution. 
Members of the House need only watch one of the many television programmes that focus on the neighbours from hell to understand the tensions and the problems that can arise with greater numbers of people moving to small living spaces. With increased density of dwellings neighbours are required to work together more closely in order to organise their living arrangements and to share facilities. This new bill provides clear processes for doing this. 
The bill will modernise the governance framework. It is designed to make joint decision-making by the bodies corporate simpler because right now there are developments where any action by the body corporate is stalled. That is because the body corporate is unable to get a unanimous resolution and a contrary neighbour can control and enrage dozens of unit holders. It is happening every day. As has been said the new bill will lower that voting threshold to 75 percent in favour so that one person can no longer hold the rest of the body corporate to ransom. 
The bill will clarify the position of unit holders the body corporate managers and developers in relation to their duties and powers. The clarification in itself will immediately reduce disputes about the rights and responsibilities of neighbours. 
The bill will also establish a resolution service for anything to do with unit title matters. The service will be required to provide information and education on how unit titles work and if necessary to mediate or adjudicate. It will also introduce new ownership structures that are designed to be flexible and that can manage large complex developments particularly those—as has been mentioned—that may have a mixed use such as living and working restaurant use and other uses and also those that have a multi-stage development period. One of the problems with the current legislation is that it is difficult to do a part of a development without getting oneself tied up with bureaucracy. 
Finally the bill will introduce a mandatory disclosure regime for buyers sellers and developers. This is really to make consumers better informed so that they can make better choices in a more transparent and accountable way. 
Interestingly enough the most common area for dispute in multi-owned developments is the management of maintenance or really the management of finance for maintenance. This bill will require mandatory long-term maintenance plans and long-term maintenance finance organisation. That will be based on good sound property management practices but it will be flexible enough to be tailored to the development’s needs. 
This bill has been long-awaited and the industry supports it. There has been a wide consultation process and feedback has been generally positive. I am delighted that National is addressing the problem of an outdated Act. 
Hon Trevor Mallard 
: National is addressing it? 
NICKY WAGNER 
: National is addressing it. We promised to simplify and streamline regulation and this is another example of us taking action very early in our term. I am sure that many multi-unit developments will be better organised and will become better places to live now that we can get rid of the old Unit Titles Act and the way that it empowers neighbours from hell. 
NIKKI KAYE (National—Auckland Central) 
: 
 I rise to support the Unit Titles Bill. This is very important legislation for the people of Auckland Central. There are over 21000 people living in the central business district of Auckland and there are about 9000 unit titles in the city so it will have a big impact in my electorate. I am very happy that the Minister of Housing has made this bill a priority because it is my understanding that the review began in 2003. It was a long time coming—5 years in the process—but we are here today and I acknowledge that there is widespread support for this bill both across the House and in the industry. 
My colleague Maurice Williamson noted what Auckland Central looked like back in the 1970s. Unfortunately I was not born back then but I can tell members what it looks like now. One of the most staggering points that has been made is that in the next 50 years over half a million people will be living in either those types of developments or multi-use properties. So is very important legislation. I am glad that the Minister has made it a priority and I cannot wait until it is passed. I was at a meeting with a residents’ advisory group in the central business district in the last week and this issue is a major priority for that particular group because of the impact on all the people in the central business district. 
This bill does four or five key things that are very positive. The bill not only deals with the disputes resolution process—making sure that such cases are not dealt with in the courts but via mediation and the disputes tribunal—but also seeks to prevent some of those cases from coming about. It does so by trying to clarify and simplify some of the rights and responsibilities of unit owners and the obligations of bodies corporate. I think that is pretty important. At a time when New Zealanders and New Zealand businesses are really suffering under the recession it is really important that we are not clogging up the courts with some of these cases. Given that New Zealand now has such a large number of properties that fall under these rules and we have issues like rotting and leaky homes I think it is really important that we are bringing in some legislation that seeks to clarify and simplify the rights and responsibilities of unit owners and the obligations of bodies corporate. 
I pick up on Sue Bradford’s point that by changing the disputes process to mean that a number of these disputes would go through the tribunal we are actually improving access to justice for a lot of people. I think that is a really important point as well. Another key thing this bill does is that it enables decisions to be made on the agreement of 75 percent of those who vote at a body corporate meeting which I think is a really important point. I have lived in an apartment. It is very difficult to get 100 percent agreement and it often leads to gridlock. So we have got rid of a cumbersome requirement and that is really important. 
The other key point the bill addresses is around sound property management practices which I think is important particularly for young buyers. I know that in Auckland Central there are an increasing number of younger families in the central city because apartments tend to be cheaper and that is a key way to access cheaper housing. They tend to go into apartments in the central city. It is key that we are introducing something that will enable bodies corporate to develop long-term maintenance plans to protect the capital value of some of those apartments and developments. It can be pretty heartbreaking for some of those young buyers if they end up in a situation—as some of them have—whereby they are effectively left with big-ticket items for maintenance. So it is quite important that we promote sound property management practices. 
This is very important legislation for the Auckland central business district. It will affect a large percentage of the 21000 people living in Auckland Central. In my view the legislation cannot be passed quickly enough. It is an updating of the law but—as we have seen from the figures that half a million New Zealanders in the future will be living in these types of multi-unit dwellings—the issue will not go away and it is important that we address it as soon as possible. I commend the Minister for making this a priority particularly for the people of Auckland Central. I commend the Minister in particular for the provisions around dispute resolution because I think it will lead to better access to justice for many people and it will prevent some of the heartbreak for some of those young families who end up in situations like that. 
The last point I want to address is a technical change that is dealt with in the bill around large-staged or mixed-use unit title developments. It enables them to be layered where two or more bodies corporate are managed under an umbrella body corporate. This basically means that an apartment block a shopping centre and a car-park in a multi-use development could each have its own subsidiary body corporate to manage the interests of each group of owners. That is really important because there are a number of those within Auckland Central as I said before and it is quite clear that this legislation will enable each subsidiary body corporate to be a member of a head body corporate that is responsible for the overall management of the development. 
I again commend the Minister on making this bill a priority and I look forward to the passing of this legislation because over the last 3 years we have seen a tremendous change in the landscape of New Zealand—particularly in Auckland Central. 
HEKIA PARATA (National) 
: 
 Tena koe Mr Assistant Speaker Barker. I am delighted to rise and support the Unit Titles Bill because it resonates with many of the values that characterise this very fresh new National-led Government. 
First of all the bill is characterised by action. This bill has been 5 years in development and has languished since August on the Order Paper but this National-led Government has gripped its responsibilities. It has charged into the commitments that we made to clarify people’s rights to introduce simplicity and to streamline regulations so that New Zealanders are able to get on and live their lives without undue interference by overweening Government. Action is one of the first hallmarks of this new National-led Government. The bill is the result of nearly 5 years of review and consultation processes and it overhauls legislation from 1972. As my younger colleague Nikki Kaye mentioned she was not born in 1972; I only just made it myself. But I am able to stand and talk about how times have changed since the time when one or two units were built to the time now when we experience multilevel ones. 
Another hallmark of this fresh new National-led Government is our interest in clarity: people understanding clearly what their rights are and the processes by which they may exercise those rights and having the opportunity to protect those rights. We are interested in streamlining and simplifying regulations. This bill recognises that. It has widespread support from both the Opposition and the industry because all parties recognise that the opportunity to clarify regulations so that each participant in this process can conduct his or her particular level of business without undue ambiguity is a great plus of the bill. 
The bill clarifies property rights: where they lie—with whom they lie—and which level of protection relates to each of those property rights. That is yet another hallmark of this fresh new National-led Government. 
Hon Trevor Mallard 
: Introduced in May 2008. 
HEKIA PARATA 
: I say to Mr Mallard that it protects value so that people who have invested in this kind of property understand what kind of value accrues to the investment they have made and that over time that value will be protected. In this bill there are of course provisions for long-term future-focused plans to ensure that owners developers bodies corporate and managers of bodies corporate are very clear about what their responsibilities are over time. The provisions also ensure that the capital value is protected over time and does not disappear because there has been insufficient provision for the future. The legislation is inclusive: it involves all participants in the process and it has included people who have an interest over time. Everyone who needed to be involved has been involved and has had the opportunity to contribute to this new legislation. 
The bill reflects realism which is yet another hallmark of this fresh new National-led Government. We understand that it is almost impossible—as anyone living in a family of more than one will know—to achieve 100 percent agreement all of the time on all issues. So this bill provides a 75 percent threshold which in itself is still a relatively high threshold as those of us who have ever had the experience of using Te Ture Whenua Maori Act will know. The 75 percent threshold is still a very high threshold but it is much more realistic in terms of what kind of consensus might be achieved in collective living arrangements. It is realistic also because this is an increasing trend of living: housing in the future particularly in intensely urban areas is likely to involve more and more multi-unit habitation. 
That leads me to yet a further characteristic in the litany of characteristics of this fresh new National-led Government and that is— 
Hon Trevor Mallard 
: Nearly! Nearly! 
HEKIA PARATA 
: The member is hopeful. The characteristic is future focus. This bill introduces mandatory long-term maintenance plans and long-term maintenance funds—scaleable and appropriate to the size and complexity of the development—in order to support sound property development. It also recognises—as I said earlier and as my colleague the new member of Parliament for Auckland Central Nikki Kaye indicated—that changes are occurring in this regard most particularly in Auckland and it is important for us to recognise research that estimates that over half a million people will be living in apartments townhouses and high-rise buildings within the next 50 years. The list goes on. 
Hon Members 
: And on and on and on. 
HEKIA PARATA 
: I know. It is riveting is it not? Members have the opportunity to comment on the orchestral delight of the resonant values of this fresh new National-led Government. 
We are doing things differently with the emphasis on the verb “doing”. We are getting things done and we are only fresh into this new term of our Government. Our approach is to get on and do what needs to be done rather than talking about it. In the process we continue to reflect in operational practice the values that I have just rehearsed to members which are hallmarks of this fresh new National-led Government. 
I commend this bill to the House. It has taken 5 years; it has had multipartisan support which in itself is to be commended. Those people who have worked on it in the past are to be recognised respected and thanked for their contribution. We look forward to it enjoying continued support as it progresses through the House and passes into law so that people who choose to be involved in and live in this kind of investment and to enjoy a quality of life under a fresh new National-led Government will quickly and expeditiously be able to do so. Kia ora tatou. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I supported Lianne Dalziel when she did the work on the Unit Titles Bill I supported it when the Labour Government introduced it and I still support it. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to take a call on the Unit Titles Bill. I will probably take a slightly different angle from the one the speakers before me this evening have taken in regard to this bill. Before I take this angle I acknowledge the member on the other side of the House Shane Jones—as Labour members have wanted us to do all night—and the work he put into this bill before it came to the House. 
Hon Trevor Mallard 
: Lianne Dalziel actually did the work. 
CHRIS TREMAIN 
: I understand that Mr Jones as the previous Minister of Building and Construction put some work into it after Lianne Dalziel. It probably does not come as a surprise that he was unable to bring it to the House at the time. He got tied up in some issues around showers and water flow that prevented him from bringing this bill to the House at the time. It is along that line of showers water flow and the new green agenda that I really want to take this debate tonight. We see tonight the National Government following the new green agenda in bringing this Unit Titles Bill into the House. 
Hon Members 
: Ha ha! 
CHRIS TREMAIN 
: Opposition members laugh but let me explain it clearly. Today in the Chamber Jeanette Fitzsimons stood up and asked the Minister of Finance how National is supporting this Green agenda and where National is taking the whole green agenda. Here is a concrete example of the new green agenda: the Unit Titles Bill. We are talking about legislation that modernises unit titles. Unit titles are about building high-rise housing comprehensively and closely together within cities. It stops the encroachment out into the rural boundaries and pushing them out which is something I know the Green Party has been very conscious of—the pushing out of the city limits. We have legislation that is very important in that regard. It modernises the unit titles legislation and encourages the construction of quality high-rise developments and the concentration of public services within more comprehensive cities. In that regard I think this is important legislation. 
I will move away from that topic and back to the city of Napier and to your own province of Hawke’s Bay Mr Assistant Speaker. We have seen significant changes in the real estate landscape over the last 5 to 10 years all around New Zealand but particularly in my own province and my home town of Napier. The Ahuriri environment was once a place for fishing boats—and it still has fishing boats—but we are now seeing the development of places like the Ahuriri Quadrant and West Quay apartments. They are significant-sized apartment complexes that have been built with real quality of design. They have allowed people to live in much closer proximity. We are again following the green agenda that we have been talking about which is something the National Government is following significantly by supporting this legislation. 
The developments are helping to provide green-collar jobs in the building and sustainable development of those townhouses. There has been fantastic development of the Ahuriri landscape. There are now literally hundreds of apartments there that have changed the whole landscape. In fact my own mother has purchased one of those properties which she will benefit from living in. 
New Zealanders have struggled over time with moving off the quarter acre section away from their gardens and into a high-rise complex building. I know that my mother has struggled with that. But there are significant benefits to moving in terms of increased security and a lack of having to focus on the garden. A whole raft of things have really helped her in her retirement years. I think we will see those benefits be significantly enhanced with this sort of bill. The bill will improve the legislation around unit titles and in that regard I think it will be excellent. 
Not only will the green economy benefit from this but so will Napier and other such provincial centres which will develop their real estate infrastructure through this bill. I think we may even see Hastings in the Tukituki electorate benefit from this type of legislation. 
Nikki Kaye 
: Auckland Central. 
CHRIS TREMAIN 
: Yes Auckland Central. There is a fine example of the green economy in action. The wonderful member from Auckland Central Nikki Kaye is driving the new green agenda for that part of New Zealand. It is great to be up here in the Chamber supporting her in that regard. 
This is wonderful legislation. It is excellent to see Phil Heatley doing an excellent job as the new housing Minister. He stepped up to the plate and delivered an outstanding speech today on the new Unit Titles Bill. He has been absolutely outstanding. 
Hon Dr Richard Worth 
: A much-loved Minister. 
CHRIS TREMAIN 
: He is a much-loved Minister. 
I will talk a little about some of the details of this bill. It makes changes to some of the current legislation and I just put it on the record that it will clarify the duties and powers of unit owners. It will also provide clarification for the bodies corporate and body corporate management developers in order to reduce disputes about rights and responsibilities which are a real issue. 
A significant issue arose with one of my constituents in respect of the development of the old Inland Revenue Department building in Napier when the development was changed from the Inland Revenue Department building into a unit title block of apartments. There was an issue with the lift shafts in the building whereby one of my constituents lived on the third floor and there was a whole drama about whether one of the— 
Hon Trevor Mallard 
: What are you saying was going on in the lift then? 
CHRIS TREMAIN 
: The lifts would not go Mr Mallard. My constituent was an older woman who had to walk up and down the stairs. It became a significant issue for the body corporate and for the manager of the body corporate. 
I hope this bill will lay the groundwork so that the disputes resolution process between tenants and the body corporate can make a significant difference which will ensure that constituents like mine in Napier benefit from this legislation. We are benefiting from the new green agenda that National is pushing through Parliament today with concrete examples of that agenda—no pun intended—to ensure that we look after the environment that we concentrate development in cities and that we do not encroach into our rural landscapes. This is very important so that our farmers can continue to farm their land. 
I ask members to remember that as the Greens tell us the population is exploding. Members may not know this but New Zealand currently feeds some 55 million people. We do not want to drive down that figure by continuing that rush to develop the cities out into those green spaces so this bill helps us to concentrate growth in the cities. If we are to grow in the cities the quality of design for these sorts of apartments is important. We do not want people to congregate in high-rise towers that are without an element of design and greenery; we want to ensure that we have a fine landscape and environment for our residents to live in. I think this bill will help to ensure that we do that. 
I have no hesitation in standing here tonight in support of the Unit Titles Bill. I have no hesitation in recommending it for the excellent bill that it is and for the excellent work that the Minister Phil Heatley has done in pushing the new green agenda through the House tonight. I think it is absolutely fantastic. Thank you Mr Assistant Speaker. 
Bill read a first time.  
Bill referred to the Social Services Committee.