Jargon buster

There's a lot of technical terms to learn when you’re first getting your head around the world of body corporate management. We’ve put together this handy guide to simplify some of the more common terminology.

Absentee owners

Someone who owns the property, but does not live in it. They may, for example, own the property as a rental investment. If an owner is absent from their leased or licensed property for more than three consecutive weeks, they must appoint a person in New Zealand to act as their agent. Find out more about this clause in the Residential Tenancies Act 1986.

Accessory unit

A unit that is attached to one or more of the principal units. The accessory unit is intended to be used for a different purpose (but to complement) the principal or main unit. For instance, this could be a carpark, storage locker or swimming pool.

Annual General Meeting (AGM)

The Annual General Meeting or AGM is a gathering of all of the members of the body corporate to discuss and make decisions about matters that affect the unit title development. A body corporate is legally required to hold and document an AGM at least once during a calendar year within 15 months of the last AGM. Find out more about what happens during body corporate meetings.

Annual levy (also called body corporate levy or body corporate fees)

The money that each unit owner is required to pay every year. The fees enables the body corporate to fulfil its commitments to the unit title development. For example, the levy might cover maintenance, insurance and utility charges for common services or common areas.

Body corporate

A body corporate is a collective entity made up of all the unit owners in a unit title development. If you are the owner of a unit, you’ll be a member of your body corporate, as will your fellow unit owners.

Body corporate levy

See annual levy.

Body corporate meetings

The meetings held by the body corporate to discuss and make decisions about matters affecting the unit title development. Topics can include but are not limited to maintenance, insurance, levies and financial affairs. There are two types of meetings - an Annual General Meeting (AGM) and Extraordinary General Meetings (EGM).

Body corporate rules

These are the rules that all unit owners are required to follow. The rules are created to prevent disputes between the people who live and work in the development. Read more about the body corporate operational rules.

Committee

The committee is made up of owners who are elected at a general meeting. As part of their role they govern the body corporate according to the set body corporate rules. The committee has the power to make most decisions on behalf of the body corporate via general meetings. The committee also liaises with the Body Corporate Manager.

Common property

The parts of the unit title development that are owned collectively by all of the unit owners.  Examples include shared driveways, lifts, shared barbeque areas or a swimming pool. Every unit owner is responsible for the care and maintenance of common property.

Disclosure statements

Disclosure statements contain information about the unit title which is designed to help potential buyers make an informed purchasing decision. Sellers are required to provide this information with total transparency under The Unit Titles Act 2010. There are three types of disclosure:

Pre-Contract Disclosure Statement -  The seller provides this before entering into an agreement for sale and purchase.

Pre-Settlement Disclosure Statement - The seller provides this after entering the agreement for sale and purchase but before settlement of the sale.

Additional Disclosure - which the seller provides on request of the buyer. If you would like to know more about disclosure statements, talk to one of our body corporate managers.

If you would like to know more about disclosure statements, talk to one of our body corporate managers.

Extraordinary General Meeting (EGM)

An EGM is a meeting that can be called by the Chairperson or the Body Corporate Committee (if there is one) at any time. At least 25% of the unit owners must request a meeting for it to commence and be actioned by the chairperson. Find out more about body corporate meetings.

Long-Term Maintenance Fund

Money that is set aside in a fund by the body corporate to pay for future planned maintenance of the unit title development. Find out more about long term maintenance plans in a unit title development.

Mediation

The process of trying to resolve a dispute between two parties using the services of an independent mediator. The mediator does not make decisions, but does encourage discussion between the two parties and tries to help them reach an agreement. Find out more about dispute resolution.

Operational Rules

Rules set up to help the body corporate govern the unit title development. You can read all about body corporate operational rules on the Ministry of Business, Innovation and Employment website.

Ownership interest (previously known as unit entitlement under the Unit Titles Act 1972)

This is the percentage used to calculate and raise funds for items such as the capital improvement fund. The interest amount is set when the property is developed. It is determined based upon the value of individual units, proportional to the other units in the same development.

Private Property

In the context of a unit titled development, this means property which belongs to an individual and/or their unit.  It is not shown or indicated as part of common/community property on the unit plan. Private property is the responsibility of the owner of the designated unit.  

Professional manager (also known as body corporate manager)

This person is also known as a body corporate manager.  Body corporate managers are hired to help the body corporate manage their day-to-day affairs. This can include things like organising meetings, preparing financial statements, collecting levies, coordinating repairs and more.  A service package is typically customised according to the property’s unique needs. Find out how Barfoot & Thompson Body Corporate can help your body corporate.

Proxy

A proxy is a designated person who stands in to represent an eligible voter at a meeting, when that person cannot attend.

Quorum

In the case of a body corporate meeting, the quorum are the people who can vote on behalf of the principal units. The quorum must total at least 25% of the units to be valid. Read more about body corporate meetings and quorums.

Special levy

Money raised by the body corporate for a special purpose, which is separate to the annual levy fund. For example, to cover a remediation project.

Special resolution

When the body corporate makes a decision which could have significant consequences for the unit owners (such as selling part of the common property), a special resolution is needed. For a special resolution to pass, 75% of those present who are entitled to vote, must vote in favour of the motion.

Trust Account

An account which holds money from the body corporate members, and is separate from all other money.

Unit entitlement

This is the formal plan showing the lot, unit entitlements, principal units, accessory units, common property. It is placed on file with Land Information New Zealand. The unit plan determines and makes clear what is common property and what is private property. The unit entitlement is critical in showing who is responsible for which obligations.

Unit plan

The unit plan is held on file by Land Information New Zealand. The unit plan shows the lot, principal units, accessory units, common property and unit entitlements. The unit plan also shows areas that are designated as ‘common property’ and ‘private property’.

Unit property

The area of the unit title development that belongs exclusively to an individual unit and is not shown as common property on the unit plan. Unlike common property, unit property is the sole responsibility of the owner of relevant unit.

Unit title (also known as strata title)

When a property is divided into 2 or more units that are owned separately, but which share a common area with other unit owners. As the owner, you have sole use of your private property, as well as a share of the common land.

Unit title development

An area of land and buildings that has been subdivided into two or more units, such as apartments, and often includes common property shared by the unit owners.

Unit Titles Act 2010

The current legislation that governs body corporates. It came into force on 20 June 2011. Read the Unit Titles Act 2010.

Unit Titles Regulations 2011

The regulations that support the Unit Titles Act 2010. Read the Unit Titles Regulations 2011.

Utility interest

Utility interest is usually the same as the ownership interest. It may differ if the body corporate agrees that costs should be shared differently.  Utility interest decides how much you will pay to the body corporate as your levy. This is your share of the overall costs for the whole complex. The levy amount will be included in your pre-contract disclosure statement. It can be changed by a special resolution voted upon at a general meeting.  Should the utility interest be changed, there can be no further review for another 36 months following the implementation. Read more about utility interest and ownership interest.

Get in touch

Find out how our team can make life simpler for your body corporate members