Cosgrove Clayton: Unit Titles Bill — Second Reading 
Cosgrove Clayton: Unit Titles Bill — Second Reading 
[Volume:660;Page:8942] 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 Rather than get into the sort of “who did what to whom” exchange that we have had for most of the night I think members on both sides of the House would probably agree that the Unit Titles Bill is good and necessary legislation that will provide a high degree of consumer protection. It is akin I suppose to the old Real Estate Agents Act which was an Act that was way out of date and needed modernisation. The House generally came to the party to bring it into the 21st century. I will make just one comment if I may that is slightly off the bill but pertains to the dissertation of Katrina Shanks the previous speaker and it is this. It was Ms Shanks who said that this Government keeps its word. I would just say to her that that may be so on some things but not with GST. 
Moving back to the bill if we look at this legislation—when I was building and construction Minister I had a hand in this bill as did Mr Jones and latterly Mr Heatley has seen it through—I recall that a major problem was the requirement for bodies corporate to agree in unanimity to basically get anything major or even minor done. This bill corrects that as there now needs to be only a 75 percent majority. I recall that the objective for that part of the legislation was to stop some of the examples of what are known colloquially as hold-outs where in many cases maintenance had to be done on a unit title of it could be 10 units or 50 units and one person would not agree. This was very prevalent in leaky buildings. 
I recall one case where the whole series of unit titles had agreed apart from one gentleman who resided in Spain I think. He rented his unit so the story went and decided that he would not pay or participate in anything or put up any money as a contribution to remedy the situation. That block of flats or apartments in Auckland I think was stymied. The residents could not do anything. Every unit title owner apart from one had agreed and it was self-evident. Nobody disagreed. Maintenance and construction work needed to be done to remedy a leaky building situation and I think the residents were then going to proceed to court but they wanted to get that fixed. One particular unit title owner a Kiwi who resided overseas just said he was not interested that he would not cough up and that he would not vote in favour because that would have been a binding resolution; he would have been forced to make a—from memory I think relatively small—contribution to the overall maintenance fund. Certainly some years ago which is when I recall the case occurring those people were effectively left languishing and could not effect a repair or advance the protection of that block of flats. The so-called leaky building syndrome was not anticipated in respect of the Act of 1972 because we did not have it then. 
Leading on from that one of the impressive things about the protection the legislation will provide is the need for the establishment of long-term maintenance plans to protect the long-term value of the development. That on the surface may again seem self-evident and we may ask why we would we not want to do that but again there were cases of hold-outs where unanimity was required. In many cases in smaller unit titles there was a lack in the skills base of owners or there was a lack of resource because of the body corporate fees to be able to gain the advice and skills necessary to advise on maintenance plans so things just slipped. The problem with the roof that may have needed some maintenance slipped to the point where each of the owners was required to dole out a large lump of money to remedy a major problem. 
This was difficult for those who were purchasing because there was no requirement for disclosure. One of the other pieces of excellent work in this legislation is the requirement for disclosure both in financial terms and in terms of things like the body corporate minutes so that a potential buyer can go in and examine those documents. A body corporate’s minutes can be very revealing in terms of the history of the building and its value and in terms of whether there have been any structural or maintenance problems with it. They can be very revealing to a potential buyer. Before this legislation is passed if the body corporate wishes to it can block access to those documents. Currently one has to get the body corporate’s permission to inspect those documents. 
This bill reminds me as I said of the real estate agents legislation. It is good solid consumer protection legislation. There is an argument that everybody should be responsible for himself or herself and that is predicated on the myth that we all have the skills to analyse these situations and to know which questions to ask to gain the information we need. The truth is and I include myself in this that many many Kiwis do not have a monopoly on knowledge. They do not have the skills they do not know the right questions to ask. They are good-natured people of good faith but they get sucked in by sharks. Of course they are ultimately responsible for their decisions but we need legislation simple rules to provide those consumer protections and to force the disclosure of vital information. 
In the ordinary course of business I would argue that most bodies corporate—good-natured as they are appropriate as they are—would avail a prospective buyer of that information anyway. However the sad thing about the legislative process in this House is that we tend not to pass legislation for the 99 percent of people who will obey the law whether or not it exists. Sadly we have to deal with the lowest common denominator and have to protect people from the 1 percent or 0.1 percent of folks who are hell-bent on ripping off good folk. 
So there are disclosure provisions in this bill as I have said. Equally there is the ability in this legislation for disputes to be dealt with through mediation and adjudication in the Tenancy Tribunal in the first instance rather than disputes being solely rushed off to the courts. Therefore I would argue that this makes resolution faster and cheaper. Again if we focus on the leaky building scene courts are often an option for very very large bodies corporate with a large budget because so many members contribute to it. Often the larger ones as they are today of course will proceed directly to our court system to gain a judgment. They have the resources to do that and they have those resources because of their numbers and their body corporate fees to be able to gain the experts they need. However if it is a body corporate of say 10 members or even 20 it will not have that ballast that financial capital and that capacity to wander off into a court and get justice in perhaps a swift fashion but one that will cost a bucket load of money. 
Often disputes begin as minor disputes and fester. I am sure that constituent MPs on both sides of the House have dealt with many many such cases. They can fester into large legal disputes and arguments if not dealt with. The legislation will provide for mediation and adjudication a modern form of dispute resolution in this day and age and an alternative to the courts. It is not to usurp the courts but is an alternative. I think it will provide for smaller bodies corporate especially to be able to resolve disputes cheaply efficiently and swiftly. That is a major problem that we have. So I support this legislation. 
My colleague Shane Jones noted with some pride that the legislation will also bring the infrastructure into the 21st century. Of course with this legislation we will now have computer registers. Where land is subdivided to create the unit title development there will be the creation of a computer register where the principal unit is subdivided to create a subsidiary unit title development. Again it is an attempt to cut down red tape and to use technology to have swifter and more efficient outcomes. 
In summary despite the “who did what to whom and where and who takes the credit for what” we on this side think that tonight is one of those times when people will look at this Chamber and perhaps agree that a bit of bipartisanship is always appropriate especially when it comes to consumer protection. At the end of the day one’s unit title just like one’s freehold property or stand-alone house is probably the biggest asset that Kiwis will have in their lives. It is one where especially with a unit title where there is common property the risks are different and are often greater than those associated with a stand-alone house. I think this bill will provide protection and I endorse it. 
Bill read a second time.