What is a Unit Title or Stratum Estate?

16 April, 2019 | Jennifer Edwards

A unit title is also referred to as a “strata title” or “stratum estate”.  It can either be in fee simple (freehold) or leasehold.  This type of  property title is generally in a building where there are multiple owners or shared walls or public space – such as apartments, terrace housing & units. When you own a unit title property you own your apartment/unit/house & any other areas recorded on the title such as garages, courtyards & storage areas.

You also own an undivided share of the common property – for example driveways, lobbies, garden resident areas.

Body Corporates

Unit title properties are governed by the Unit Titles Act 2010 and are administered by a body corporate.

The body corporate will control the management of, and expenditure for, the units within the development and this is usually administered by an appointed body corporate secretary. Owners of units in the development also form a body corporate committee.

Body Corporate Rules

There are body corporate rules which set out the rights and obligations of the body corporate and the unit owners.  Body corporate rules often contain prohibitions on things like pets, alterations to units, noise, litter, tidiness (among other things).

Body Corporate Levies

There are annual costs involved with body corporates, generally referred to as body corporate levies.  These annual levies go towards the insurance premium, maintenance and repairs, lighting, common area gardens and a long term maintenance fund for the development as a whole.

Disclosure requirements

Compared to selling other types of residential property, there are very stringent legal requirements regarding what the seller or vendor of a unit title property must disclose to a potential purchaser when selling their property. As a seller it is important to understand the requirements regarding what you must provide to potential purchasers.

As a purchaser of unit title property it is vital you fully review all the compulsory disclosure, request the non-compulsory disclosure & talk through the implications with a property law professional who is skilled in dealing with unit title properties.

Read Disclosure Requirements Under The Unit Titles Act 2010 to learn more about these requirements.

Example of a unit title

An example of a legal description to a unit title property would be: (a stratum estate in Fee Simple or Leasehold in Unit A and Accessory Unit 1 (garage, parking area, storage area) Deposited Plan 12345).

If you have any questions regarding the above, or wish to seek advice regarding buying residential property, please contact property law expert, Jennifer Edwards by phone on 09 837 6889 or email jennifer.edwards@smithpartners.co.nz