Queenstown apartment owners should understand the latest legislation affecting them, one management association says.
The Unit Titles Act came into force on June 20 this year.
Richard Hutchens, of Queenstown Management, said most owners were not yet aware of the new law's effect on apartment management.
Under the new Act, by December 20 a chairperson must be elected for each group of apartment owners.
There must be annual meetings for each group, the first to be held by that date.
Maintenance plans and levies must be outlined.
The new Act was to improve New Zealand's apartment management structure, Mr Hutchens said.
The previous Act dated back to 1972.
The new legislation was to fit with the new apartment market, which Mr Hutchens said had "grown hugely in the last few years".
Each elected chairperson would have certain responsibilities, including delegating members, meeting finance and auditing requirements and establishing a long-term maintenance fund.
This meant members of the group would have to contribute to the joint levy.
"If you are an apartment owner and you hear the word body corporate levy, it can leave the blood boiling," Mr Hutchens said.
For this reason, it was important owners were educated on the new law.
"It [the legislation] will be flying over a lot of people's heads," Mr Hutchens said.
Owners needed to start setting money aside for the long-term finance plans, he said.
The law had been drafted with bigger apartments in mind and apartments in Queenstown fit that criteria, he said.
When an owner looked to sell under the new legislation, he or she would have to give full disclosure, and needed to know that sooner rather than later or "these people are going to get tripped up".
If groups of owners were not organised when buyers came along, it would have a negative influence on price.
People needed to embrace the new law or it could "bite" them, Mr Hutchens said.
"People need to be educated and take action."
The second deadline for the new legislation was October 1, 2012.
This date would bring in the new operational rules decided by various apartment owner body corporate groups and the law.
Many of the existing rights or obligations could be lost if no new rules were adopted at the annual meetings.
The default provisions would then kick in, Mr Hutchens said.
"Any rules prior to the new Act will be swept away unless put in writing," he said.
For apartment owners, Mr Hutchens recommended a review of existing rules as soon as possible before the next AGM or at the very latest, before September.
What the Act means:
• New rules: Many of the existing rights or benefits rights and obligations might be lost if no new rules are adopted at the annual meeting and default provisions kick in.
• Owner responsibility: Several duties and obligations of owners are now specified in the Act; matters such as unit alterations and how they can be carried out are now stipulated within the legislation.
• Long-term maintenance plan: Every body corporate is now required by law to have a 10-year term maintenance plan.
• Levies: The manner in which levies are calculated has been changed with the introduction of an ownership interest and a utility interest. This recognises that while in some circumstances it is appropriate to share costs based on ownership, in others costs are better based on use.
• Disclosure requirements: A seller is now required to supply at least three types of disclosure statements to buyers.
• Absent owners: There are new rules for absent owners. An owner must appoint an agent if the unit is leased and the owner is absent from New Zealand for longer than three weeks.
