Shared interests
Body corporates vs residents’ associations: what’s the difference? Rachael Cone of Total Realty sheds some light.
Townhouses and apartments are becoming increasingly popular across New Zealand, and at Total Realty we’re being asked more and more about the difference between unit titles with a body corporate and fee-simple properties with a residents’ association.
The key difference really comes down to what you own and who is responsible for maintaining the shared areas.
With a unit title, you generally own your individual unit, while the body corporate looks after the common property, such as shared driveways, exteriors, roofs and other communal areas. Body corporates operate under the Unit Titles Act 2010, with owners paying levies towards maintenance, insurance and other shared costs.
We find that unit titles are generally well understood by buyers. Residents’ associations, however, can be a little less familiar.
With a fee-simple townhouse, you generally own the entire property, including the land beneath your home. However, many townhouse developments have a residents’ association. If there is one, you may automatically become a member and be required to follow its rules.
A residents’ association usually manages shared areas and facilities, while individual owners are still responsible for maintaining their own property, including the exterior.
There are also differences in the information and protections available to buyers, so it’s important to understand exactly what you’re buying and what obligations come with it.
Buying a townhouse? Don’t just look at the price and floor plan. Your real estate agent will provide you with the body corporate or residents’ association documents, rules, insurance, maintenance responsibilities and levies. Make sure you read them and have them checked by your solicitor.
A little homework now can save you some surprises down the track!
Thinking of buying or selling? Talk to Total Realty. We’re here to help make the process simple and give you confidence in your next move.
