Submission on MBIE s proposed amendments to the Unit Titles Act 2010

Transcription

1 This document has been proactively released. Any redactions made to the document have been made consistent with the provisions of the Official Information Act 1982 Submission on MBIE s proposed amendments to the Unit Titles Act 2010 December 2016 Name of submitter: s 9(2)(a) Organisation: Martelli McKegg Contact address: s 9(2)(a) Contact phone number: s 9(2)(a) Contact address: s 9(2)(a) MBIE officials can contact me if they have a question about the content of my submission Making a submission To make a submission, please fill out the submission form below, and send to UTAreview2016@mbie.govt.nz. Both Word documents and PDFs will be accepted. Alternately, you can download the submission form and post it to: Unit Titles Act Review Construction and Housing Markets, BRM Ministry of Business, Innovation & Employment PO Box 1473 Wellington 6140 New Zealand Consultation on the Unit Titles Act finishes on Friday 3 March 2017 at 5pm. Thank you for your submission. KTK-P-18-V1

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9 2.3. It has also been questioned whether body corporates should be free to have their own dispute resolution regimes rather than have their rules overridden by the UTA In Singapore and the majority of the Australian States, body corporate rules include dispute resolution provisions Role of the Default Body Corporate Rules 3.1. I am unaware of any academic commentary on the role that the new default operational rules under the Regulations (Default Rules) 8 have played in the lack of disputes in relation to enforcement of rules The Default Rules (in their entirety) provide: 1 An owner or occupier of a unit must not (a) damage or deface the common property: (b) leave rubbish or recycling material on the common property: (c) create noise likely to interfere with the use or enjoyment of the unit title development by other owners or occupiers: (d) park on the common property unless the body corporate has designated it for car parking, or the body corporate consents: (e) interfere with the reasonable use or enjoyment of the common property by other owners or occupiers. 2 An owner or occupier of a unit must dispose of rubbish hygienically and tidily. 3.3 The Default Rules are very basic compared to those used in Singapore and the various Australian States 9 (which, as noted above, usually contain dispute resolution provisions 10 ) and those under the UTA John Greenwood, editorial in The Property Lawyer (NZLS, May 2010) volume 10, issue 5 at 2. 7 Department of Attorney-General and Justice, Northern Territory Government, Enforcement of Articles and By-laws Under the Unit Titles Act and the Unit Titles Schemes Act and Other Issues, Discussion paper, February Unit Title Regulations 2011, Schedule 1. 9 A link to the various Australian State Model Rules is available at KTK-P-18-V1

10 3.4 Most unit title developments had extensive rules under the UTA Unless the body corporate passed new rules on or before 30 September , the Default Rules superseded the existing body corporate rules. 13 Therefore the majority of rules passed under the UTA 1972 are void and of no effect. 3.5 The simplicity of the Default Rules is also in direct conflict with the need expressed in the ARC Report for more sophisticated rules Because of section 174 of the UTA, the Default Rules do not, and cannot, contain provisions for dispute resolution. 3.7 More extensive model operational rules for residential, commercial/industrial and mixed use developments are available through the Auckland District Law Society but are drafted in a conservative manner so as to comply with the UTA As the Default Rules do not include basic rules governing the use and occupation of the unit 16 and use of the common property (such as whether pets can be kept, parking, children s access to common facilities, hours of use of common facilities, exterior colours and other operational matters), there is little scope for dispute regarding their enforcement. More extensive drafting would clarify the respective rights and obligations of unit owners. 3.9 It was initially suggested that as any changes to the Default Rules are noted on the supplementary record sheet (which forms part of the title to a unit), then any dispute in relation to their interpretation and application is an issue of title and therefore outside jurisdiction of the Tribunal. 17 The Fee Model contemplated that disputes in relation to rules would be considered by the Tribunal. The UTA was amended in 2013 to clarify that the Tribunal does have jurisdiction in relation to breaches of the rules (including issuing an 10 Department of Attorney-General and Justice, Northern Territory Government, Enforcement of Articles and By-laws Under the Unit Titles Act and the Unit Titles Schemes Act and Other Issues, Discussion paper, February UTA 1972, Schedules 2 and S 220 of the UTA gave a window of 15 months from first day of the month following the date of commencement of the Act (which was 20 June 2011(UTA Commencement Order 2011)). 13 This is subject to technical arguments in relation to enforcement of superseded rules, based on legitimate expectation and the like. 14 Auckland Regional Council, Unit Titles Act 1927: The Case for Review, August 2003 at And are limited in the ability to do so by s 106 of the UTA. 17 Thomas Gibbons, the Tenancy Tribunal: Tensions of Jurisdiction, Coherence and Economics (2012)12 Otago LR 703 at 720. KTK-P-18-V1

11 injunction to prevent their breach). 18 However, for the sake of clarity, if the Default Rules were broadened then sections 106 and 107 of the UTA would need to be expanded and the jurisdiction of the Tribunal confirmed. 18 UTA, s 171(3A). KTK-P-18-V1