Unit title (also called stratum title or strata title) is the form of ownership used for apartments, townhouses, and other multi-unit developments in New Zealand. Understanding how unit titles work — and what the body corporate obligations entail — is essential before buying any apartment or attached dwelling.
Unit title gives you full ownership of your unit plus a share of the common property. Every unit title development has a body corporate that manages shared areas and building insurance. Owners pay annual levies and must comply with body corporate rules. A pre-contract disclosure statement is legally required from vendors before any agreement becomes binding.
What Is a Unit Title?
A unit title is a separate freehold interest in an individual unit (apartment, townhouse, office) within a multi-unit development. It gives you:
- Exclusive ownership of your unit — the airspace within your apartment or unit boundaries (as defined in the unit plan)
- A share in the common property — lifts, lobbies, gym, pool, hallways, roof, external walls
- Membership in the body corporate — the legal entity that manages the common property
Unit title is created under the Unit Titles Act 2010 (which replaced the 1972 Act and significantly modernised NZ strata law).
How Body Corporates Work
The body corporate is a legal entity automatically created when the unit title development is established. All unit owners are automatically members.
Body corporate responsibilities
- Maintaining common property (lifts, hallways, grounds, pool, gym)
- Arranging building insurance (replacement value for the whole building)
- Setting and collecting levies from owners
- Enforcing the body corporate rules
- Preparing and updating the long-term maintenance plan (LTMP)
- Holding annual general meetings and keeping minutes
Body corporate levies
Every owner pays annual levies, which fund:
- Operating levy: Day-to-day maintenance, management fees, insurance
- Long-term maintenance fund (LTMF) contribution: Capital savings for future major expenditure
Levies vary widely with the building’s size, age, facilities and condition. Typical ranges, what levies pay for and how to judge them are in our body corporate fees guide.
Pre-Contract Disclosure Statement: Your Legal Protection
Under the Unit Titles Act 2010, vendors of unit title property must provide a pre-contract disclosure statement to the buyer before any agreement becomes binding. This document discloses:
- The amount of annual body corporate levies
- Any overdue levies on the unit
- The body corporate’s insurance information
- The current long-term maintenance plan and fund balance
- Any significant disputes, litigation, or pending special levies
- Procedural and governance information
Important: Do not sign a sale and purchase agreement on a unit title property until you have received and reviewed this disclosure statement with your solicitor. If it is not provided, the agreement is voidable.
Long-Term Maintenance Plan and Special Levies
Every body corporate must have a long-term maintenance plan. Since 9 May 2024 the plan must cover at least 10 years, or at least 30 years for developments of 10 or more units, which must also review it every 3 years. A long-term maintenance fund is required too unless the body corporate opts out by special resolution. The plan sets out the major work coming up (roof, lifts, cladding) and how it will be paid for. When the fund falls short of a large cost, owners can face a special levy, a one-off charge that can run to tens of thousands of dollars per unit. Our body corporate fees guide covers how to read the plan, the fund balance and the minutes for signs of one.
Body Corporate Rules
Each body corporate has its own set of rules governing:
- Short-term letting (Airbnb): Many body corporates now restrict or prohibit short-term accommodation
- Pets: Some complexes prohibit pets or restrict them by size
- Renovation and alterations: Usually require body corporate consent
- Noise and conduct: Quiet hours, use of shared facilities
- Parking: Allocation and use of car parks
Review the rules carefully before buying — they are legally binding and can significantly affect how you use the property.
Insurance and the Unit Title
The body corporate insures the whole building (structure, common areas, fixtures). You are responsible for insuring your unit’s contents and any improvements you have made beyond the base specification.
What to check:
- Is the building insured for full replacement value? (Not just rateable value — current building costs are much higher)
- Has the insurance cover been reviewed recently (every 1–3 years recommended)?
- What is the excess per claim? (Some body corporates have very high excesses, e.g., $50,000)
- Is the policy through a reputable insurer?
Unit Title vs Cross Lease vs Freehold
| Feature | Unit title | Cross lease | Freehold |
|---|---|---|---|
| Land ownership | Share of common property | Share of freehold | Sole owner |
| Body corporate | Required | No | No |
| Annual levies | Yes | Informal | No |
| Alteration consent | Body corporate | Other leaseholders | Self (council only) |
| Building insurance | Body corporate arranges | Each owner separately | Self |
| Mortgage access | Standard (size restrictions) | Standard | Standard |
Frequently Asked Questions
What is a unit title in NZ?
A unit title gives you freehold ownership of your individual unit (apartment or townhouse) and a share of the common property. All unit title owners are members of the body corporate that manages shared areas.
How much are body corporate fees in NZ?
They vary widely with the building’s size, age, facilities and condition; our body corporate fees guide has typical ranges. The annual levy is disclosed in the pre-contract disclosure statement.
What is a pre-contract disclosure statement for unit title NZ?
A legal document the vendor must provide before any agreement becomes binding, disclosing levies, insurance, LTMF balance, rules, and any disputes or pending special levies. Do not sign an agreement without reviewing it.
Can I Airbnb a unit title apartment in NZ?
It depends on the body corporate rules. Many NZ body corporates have introduced rules restricting or prohibiting short-term accommodation (Airbnb, Bookabach). Check the rules before purchasing if short-term letting is your intention.
What is the LTMF in NZ body corporate?
The long-term maintenance fund (LTMF) is a savings pool maintained by the body corporate to fund future major capital expenditure. An adequately funded LTMF reduces the risk of large special levies. Body corporates can opt out of having one by special resolution, so check whether the building has one.