Willis Nicola; Rurawhe AdrianUNIT TITLES (STRENGTHENING BODY CORPORATE GOVERNANCE AND OTHER MATTERS) AMENDMENT BILLFirst ReadingNICOLA WILLIS (National): 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 And in practice because the current law is archaic and outdated it is creating headaches for owners and prospective buyers.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.DEPUTY SPEAKER: 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.