Court puts body corporate repair obligations under the microscope

01 July 2015

Commentary , Body Corporate

The High Court recently considered a dispute between owners in a 22 apartment unit title development in Paihia concerning remedial work to the development.  In its decision the Court examined the obligations of bodies corporate to undertake repairs under section 138 of the Unit Titles Act 2010 in the leading case on this statutory provision to date (Wheeldon & Ors v Body Corporate 342525 [2015] NZHC 884).

On the basis of expert advice commissioned by the body corporate a majority of the owners in the development were in favour of the body corporate undertaking extensive repairs to decks and window joinery.  A minority of owners advocated more limited repairs and argued that the repairs should be the responsibility of individual unit owners rather than the body corporate.

In his decision Justice Muir considered the body corporate's obligations under section 138(1)(d) of the Act, in particular the duty to repair and maintain any building elements and infrastructure that relate to or serve more than 1 unit.  He reviewed the relationship of this section with section 80(1)(g) of Act under which owners are required to repair and maintain their unit and ensure that no damage is caused to the common property, any building elements or other units in the building.

Justice Muir took into account the objectives of the Act including protecting the integrity of the development as a whole and the desirability of the body corporate ensuring that remedial works to unit title developments are carried out to a uniform standard and with uniform aesthetic outcomes.  He concluded that under section 138(1)(d) where a particular building element or infrastructure serves more than one unit the body corporate is obliged to repair that building element or infrastructure.  The owner's obligations under section 80(1)(g) only arise where section 138(1)(d) does not apply.   Justice Muir held that to be consistent with section 80(1)(a(ii) of the Act the body corporate's repair obligations under section 138(1)(d) should also be read to include building elements or infrastructure that serve common property.

Justice Muir held the body corporate in this case was entitled to proceed with the repair works without giving individual unit owners the opportunity to effect their own repairs first.  He stated the decision as to which repair proposal was the most appropriate was best left for the body corporate to decide.  The body corporate in this case had acted on expert advice and the expert was suitably qualified so the Court would not interfere with the body corporate's decision to proceed with the more comprehensive repair option.

This judgment supports the approach that repair work to more than one unit in a unit title development should generally be the collective responsibility of the body corporate.  It reflects the intent of the new Act that bodies corporate have increased responsibility for repairs of this nature so that the repairs are undertaken in a co-ordinated and consistent fashion.  These increased responsibilities do result in some loss of autonomy to individual unit owners.  However, the loss of individual autonomy has always been a feature of group ownership structures and there are significant benefits to the owners as a whole in the body corporate arranging such repairs.

Contact Gareth Lewis on 375-2376 for advice on any body corporate matters.