Body Corporate terminology made easy
Owners often have queries about what the following terms mean. We thought we’d cover off many of the more common terms found in the Unit Titles Act 1972 (The Act):
(Similar terms under the Unit Titles Act 2010 will be covered once that Act is implemented)
Body Corporate:
The collective entity made up of all the owners in a unit titled development. You and your fellow owners are the body corporate.
Proprietors:
The registered owner(s) of a unit. Or as The Act puts it: the “…persons or persons for the time being registered as proprietor of the stratum estate in the unit…”
Committee:
Owners elected at a general meeting to govern the body corporate in accordance with The Act and rules. The committee has the power of the body corporate between General Meetings and directs the Body Corporate Manager.
Body Corporate Manager | Secretary:
The role performed by your Account Manager. Duties are listed in The Act, but focus on assisting owners to manage their body corporate. The Body Corporate Manager is often called on to provide guidance and recommendations, however ultimately the owners who have the financial interest in the property make decisions. In practice, the Body Corporate Manager most frequently liaises with the committee members on day-to-day issues.
Common Property:
Areas owned by all the owners as tenants in common and shown on the unit plan as such. Common property is the responsibility of the body corporate (which is of course, all the owners of units within the development), while private property is the responsibility of the owner of the relevant unit.
Principal Unit:
The privately owned primary units, “…designed for use…as a place of residence or business, and that is shown on the unit plan”. These units are private property.
Accessory Unit:
The Act defines an accessory unit as a unit “…designed of use with any principal unit (whether as a garden, garage, car parking space, storage space, swimming pool, laundry, stairway, passage, or other like purpose) and that is shown on the unit plan…”
Accessory units attach to principal units, meaning one has to own in a body corporate in order to own an accessory unit in the same complex.
Unit Plan:
The plan showing the lot, principal units, accessory units, common property, and unit entitlements that is filed at Land Information New Zealand. The unit plan determines what is common property (and therefore the body corporate’s responsibility) and what is private property (and therefore the unit owner’s responsibility).
Rules:
These are the Schedules 2 and 3 of the Unit Titles Act 1972, or often these are changed and the amended rules would have been filed with Land Information New Zealand. These govern the specific things that can or cannot be done in and by a body corporate, and can vary widely. It’s important to read and understand the rules of your own body corporate, preferably before you buy into the complex.
Budget:
An estimate of the costs that the body corporate will incur in the coming financial year, which is considered and approved by owners at a General Meeting. Once a budget is approved, it becomes the basis of the levies that you pay. The total payable in respect of each unit is calculated by applying the unit’s entitlement to the total of each item in the budget.
Annual Levy:
Also called ‘body corporate levy’ or ‘body corporate fees’, this is the annual contribution which each unit owner is required to pay in respect of their unit (based on an approved budget and their unit’s unit entitlement) to enable the body corporate to meet its commitments. A body corporate might also raise a ‘special levy’ for a special project.
Annual General Meeting:
A ‘general meeting’ is a meeting of all of the members of the body corporate, called in accordance with the requirements of the Unit Titles Act. A body corporate must have at least one meeting every year, which will be referred to as the Annual General Meeting. Other general meetings are called Extraordinary General Meetings (EGM).
Extraordinary General Meeting:
Any general meeting of the body corporate other than the annual general meeting. The rules of the body corporate determine who can call an EGM; usually the committee, and owners representing a defined proportion of the unit entitlement who give written notice to the body corporate of their desire to call an EGM.
Proxy:
Written authority given to someone else to allow them to attend and vote on behalf of the registered proprietors at a general meeting.
Trust Account:
An account which holds each body corporate’s funds entirely separate from all other money and the Body Corporate is paid any interest earned on the funds held in their trust account, and all other accounts.
