Understanding Body Corporate Rules: A Comparative Perspective

By James Chong | Published on 29 January 2026

Multi-unit housing in New Zealand, from apartments to townhouses, has grown rapidly over the last two decades. While unit title living offers convenience and shared amenities, it also introduces complex legal and financial responsibilities for owners. Many disputes, particularly around building defects, leaks, and repairs, arise from unclear boundaries, insufficient planning, and gaps in governance.

This article provides a professional, yet accessible guide to how New Zealand’s Unit Titles framework works, recent reforms, practical challenges, and how it compares with Hong Kong’s approach.

Contemporary residential apartment complex featuring large balconies and a rooftop garden

1. Unit vs Common Property: Why Boundaries Matter

Under the Unit Titles Act 2010, ownership is defined by the unit plan registered on the property title:

• Your unit: The space inside the boundaries shown on the plan.

• Common property: Everything else shared by all owners, such as roofs, exterior walls, structural slabs, and shared pipes.

Defining the boundary

Typically, NZ unit boundaries are at the midpoint of walls, floors, and ceilings unless otherwise stated. This creates practical complications:

• Do you or the body corporate maintain a balcony membrane?

• If water leaks from your bathroom to the unit below, who pays for repairs?

• Pipes, membranes, and structural elements often cross boundaries, blurring responsibility.

Example: A leaking shower in an upper unit may cause damage to the unit below. Determining whether the leak originated from a privately owned fixture or common property can take months of investigation, delaying repairs and increasing costs.

2. Inter-Unit Leaks: Responsibility and Risk

New Zealand approach

Responsibility is determined based on cause and ownership:

Leak source	Likely responsible party
Private bathroom or kitchen fixtures	Upper unit owner
Common pipes or membranes	Body corporate
Structural slabs	Body corporate

If the source is unclear, disputes often require legal or technical assessment. Repairs may be delayed, and insurance claims can be complicated.

Uninsured owners: If an owner lacks insurance, they remain personally liable for damage caused by their unit. Costs may need to be covered out-of-pocket or through legal action.

Hong Kong approach

Hong Kong prioritizes rapid damage control:

• The owner in control of the source unit is generally responsible, even if insurance is lacking.

• The owners’ corporation can immediately authorize repairs to prevent further damage, recovering costs later as a statutory debt.

  
  

Hong Kong’s focus is on stopping damage first and resolving costs second, reducing prolonged disputes and secondary damage.

Construction workers on a multi-story scaffold for a building facade maintenance project

3. Building Repairs and Contractor Selection

Decision-making in New Zealand

• The body corporate committee or manager evaluates quotes and recommends contractors.

• Minor works can be authorized directly within budget limits.

• Major works (e.g., leaky building remediation) usually require owner approval via a general meeting, often a special resolution.

  
  

Example: A body corporate votes to repair a leaking roof at NZD 200,000. Three owners refuse to pay their share. The committee can apply to the Tenancy Tribunal and place a charge on the units to recover unpaid levies.

Hong Kong comparison

• The owners’ corporation can authorize emergency repairs immediately, even if some owners have not paid.

• Cost recovery is enforced later through statutory mechanisms.

  
  

Key difference: NZ sometimes delays repairs if owners refuse to pay; Hong Kong ensures repairs proceed immediately to prevent building deterioration.

4. Insurance Considerations

• Body corporate insurance (common property) is compulsory in NZ.

• Individual unit insurance is optional, but strongly recommended.

• Without insurance, owners remain liable for damages they cause, potentially resulting in legal action, unpaid repair costs, and liens.

  
  

Hong Kong’s approach: Lack of insurance does not prevent liability; owners are expected to act immediately to prevent damage, with cost recovery enforced later.

5. Original Deficiencies in the Unit Titles Act

Before the 2022 Amendment, the Unit Titles Act faced criticism for:

1. Inadequate disclosure to buyers: Pre-contract statements often lacked insurance details, maintenance plans, and defect histories.

2. Weak governance: Limited standards for body corporate managers and committees.

3. Insufficient long-term planning: Ten-year maintenance plans were optional, with no requirement for a fund to cover large repairs.

4. Limited enforcement: MBIE had few powers, and penalties for breaches were minimal.

5. Inflexible meeting procedures: Remote attendance and electronic voting were not well supported.

6. The 2022 Amendment Act: Strengthening Governance

The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 addresses these issues, with all provisions fully in force by 9 May 2024:

• Improved disclosure: Buyers now receive detailed financials, meeting minutes, weathertightness, and earthquake risk information.

• Stronger governance: Ethical and professional standards for managers and committees, plus conflict-of-interest rules.

• Enhanced long-term maintenance: Large developments must have a 30-year plan, reviewed every three years.

• Enforcement and penalties: MBIE can proactively investigate compliance; the Tenancy Tribunal can now award up to $100,000 and impose penalties.

• Modernized procedures: Electronic voting and remote meeting attendance are explicitly supported.

  
  

Remaining challenges: Smaller bodies corporate may still struggle with governance, insurance affordability, and disputes over unit vs common property boundaries.

7. Hong Kong's Approach

Hong Kong demonstrates:

1. Clear, title-registered covenants (DMCs) reduce ambiguity over responsibilities.

2. Mandatory inspections catch defects early and enforce repairs.

3. Emergency powers allow urgent repairs even if some owners resist payment.

4. Cost recovery mechanisms ensure that owners cannot indefinitely avoid their responsibilities.

   
   

Implication for NZ: Adopting elements of Hong Kong’s approach, clearer obligations, mandatory inspection for high-risk buildings, and emergency powers, could reduce disputes, prevent damage, and protect owner investments.

A contrasting view of a new apartment complex in NZ and an aging apartment in HK

8. Practical Advice for Owners

1. Review your unit plan and body corporate rules to understand boundaries.

2. Ensure you have contents and liability insurance.

3. Attend body corporate meetings and engage in long-term planning discussions.

4. Understand your rights and obligations if repairs are needed, especially for inter-unit leaks.

5. Keep documentation of repairs, quotes, and committee decisions.

9. Conclusion

New Zealand’s Unit Titles framework has evolved significantly since 2010, with the 2022 Amendment addressing many historic gaps. Yet challenges remain, particularly around boundary definitions, inter-unit damage, insurance gaps, and emergency repairs. Hong Kong’s system offers practical lessons: clear responsibilities, mandatory inspections, and emergency enforcement reduce disputes and protect buildings from escalating damage.

As multi-unit housing continues to grow in NZ, combining the flexibility of New Zealand’s system with the enforcement-first approach of Hong Kong could ensure safer, more sustainable, and less contentious living environments for all owners.

Disclaimer: The views expressed in this post are my own and do not represent the opinions of any organization or employer. The content is for general information only and should not be taken as professional advice.