The "Hidden Costs" That Can Add $15,000 a Year to Your Apartment Ownership
You found a great apartment. The price is lower than nearby houses, the location is perfect, and the building has a pool and gym. Seems like a bargain, right?
Then you learn about body corporate levies. $4,000 per year for the operating fund. $2,000 for the long-term maintenance fund. Plus a "special levy" of $8,000 because the building needs new waterproofing.
Welcome to unit title ownership — where you don't just buy an apartment, you buy into a mini-government with mandatory fees, shared decisions, and rules that control everything from pets to parking.
Unit titles can be fantastic value in the right circumstances. But buying one without understanding the body corporate is like buying a car without checking if it runs. This guide explains everything you need to know before signing.
What is a Unit Title?
A unit title is a form of property ownership specifically designed for multi-unit developments like apartments, townhouses, and retirement villages. Under the Unit Titles Act 2010, you own:
- Your unit — the physical space within defined boundaries
- An undivided share — of the common property shared with other owners
- Membership — in the body corporate that manages the development
Unit titles are common for:
- Apartment buildings
- Townhouse complexes
- Some terraced housing developments
- Retirement villages
- Commercial complexes with multiple owners
Unit Title vs Freehold: Key Differences
| Aspect | Freehold | Unit Title |
|---|
| What you own | Land and everything on it | Your unit + share of common property |
|---|
| Independence | Full control (within council rules) | Governed by body corporate |
|---|
| Ongoing fees | Rates only | Rates + body corporate levies |
|---|
| Alterations | Generally free to modify | May need body corporate approval |
|---|
| Neighbours | No formal legal relationship | Shared ownership structure |
|---|
| Maintenance | Your responsibility | Shared for common areas |
|---|
| Insurance | Arrange your own | Usually arranged by body corporate |
|---|
For comparison with other title types, see our guides on cross lease vs freehold and how to read a Certificate of Title.
How Unit Titles Work
The Unit
Your "principal unit" is the space you exclusively own. Boundaries are defined in the unit plan and typically include:
- Internal walls and surfaces
- Internal fixtures
- Balconies (sometimes exclusive use rather than ownership)
What's usually not included:
- External walls (common property)
- Roof (common property)
- Building structure (common property)
- Shared spaces like lobbies, corridors, gardens
The Common Property
Everything outside individual units is common property, jointly owned by all unit owners according to their ownership interest. This includes:
- Building structure, roof, external walls
- Lobbies, hallways, stairwells
- Lifts and common facilities
- Gardens and landscaping
- Car parking (unless assigned as accessory units)
- Building services (plumbing, electrical, etc.)
The Body Corporate
When you buy a unit title, you automatically become a member of the body corporate — the legal entity that manages the development. The body corporate:
- Maintains common property
- Arranges building insurance
- Sets and collects levies
- Enforces body corporate rules
- Makes decisions affecting all owners
Body Corporate: What You Need to Know
Understanding body corporate obligations is crucial before buying any unit title property.
Body Corporate Levies
You'll pay regular levies (usually quarterly) to cover:
| Levy Type | Purpose |
|---|
| Operating fund | Day-to-day maintenance, insurance, management |
|---|
| Long-term maintenance fund | Future major repairs (mandatory under the Act) |
|---|
| Contingency fund | Unexpected expenses |
|---|
| Special levies | One-off costs for specific projects |
|---|
Body Corporate Rules
Every body corporate has rules governing:
- Pet ownership
- Noise levels
- Use of common areas
- Short-term rentals (e.g., Airbnb)
- Parking
- Moving and delivery procedures
- Exterior modifications
Governance and Voting
- Each unit has voting rights (based on ownership interest or utility interest)
- A committee typically handles day-to-day decisions
- Major decisions require owner votes at general meetings
- Some decisions require 75% or higher agreement
Pre-Contract Disclosure: Essential Information
When buying a unit title, the seller must provide a pre-contract disclosure statement containing:
- Current body corporate rules
- Minutes from recent AGMs
- Body corporate levies and financial statements
- Long-term maintenance plan
- Details of any weathertightness or structural issues
- Any court proceedings involving the body corporate
- Information about the body corporate manager
- Are levies increasing significantly?
- Are there large upcoming maintenance projects?
- Is the long-term maintenance fund adequate?
- Are there any disputes or legal issues?
- What do recent meeting minutes reveal?
Buying a Unit Title: Due Diligence
1. Order a Title Search
Your Certificate of Title shows:
- Your unit's legal description
- Your ownership interest
- Any registered interests (mortgages, easements, etc.)
- Reference to the unit plan
2. Review the Unit Plan
The unit plan shows:
- Boundaries of your unit
- Common property areas
- Accessory units (parking, storage)
- Ownership interest for each unit
3. Examine Financial Records
Request and review:
- Current financial statements
- Long-term maintenance fund balance
- Budget and projected levies
- Any outstanding debts
4. Read Body Corporate Minutes
Recent meeting minutes reveal:
- Current issues and disputes
- Planned maintenance works
- Committee dynamics
- Owner concerns
5. Check the Long-Term Maintenance Plan
The plan should identify:
- Future maintenance needs
- Estimated costs and timing
- How the fund will cover these costs
6. Get a Building Inspection
Especially important for older buildings:
- Weathertightness assessment
- Building condition report
- Identify issues not visible in documentation
7. Consult Professionals
- Have your lawyer review all documentation
- Consider a specialist body corporate advisor for complex buildings
- For complex situations, use our Expert Advice service
Need a Unit Title Search?
Get your official Record of Title delivered in 2 hours. Understand exactly what you're buying.
Order Now — $42.90 NZDLeaky Building Warning
New Zealand's leaky building crisis particularly affected unit title buildings constructed between 1994 and 2004. If buying a unit title from this era:
- Thoroughly investigate weathertightness
- Check if repairs have been completed
- Review any remediation history
- Consider the building's construction type (particularly at-risk: monolithic cladding, no eaves)
Even if repairs have been done, there may be ongoing implications for:
- Insurance availability and cost
- Future maintenance requirements
- Resale value
Advantages of Unit Title Ownership
1. Affordability
Often cheaper than equivalent freehold properties, especially in desirable locations.
2. Lower Maintenance
You're not responsible for building exterior, roof, or grounds maintenance.
3. Shared Costs
Major repairs are shared among all owners rather than falling on you alone.
4. Security
Many developments have security features like intercoms and restricted access.
5. Amenities
May include pools, gyms, or other facilities you couldn't afford individually.
6. Location
Apartments and townhouses are often in locations where freehold houses are unaffordable.
Disadvantages of Unit Title Ownership
1. Ongoing Levies
Body corporate fees add to your ownership costs forever.
2. Less Control
Major decisions require body corporate approval or votes.
3. Rules and Restrictions
Must comply with body corporate rules on pets, noise, modifications, etc.
4. Neighbour Issues
Shared walls and spaces mean closer proximity to neighbours.
5. Special Levies
Unexpected major repairs can result in significant one-off costs.
6. Complexity
More complex ownership structure with additional documentation and governance.
Frequently Asked Questions
Can I rent out my unit on Airbnb?
Check body corporate rules — many now restrict or prohibit short-term rentals due to noise, security, and amenity concerns. Rules vary widely between developments, so always review the specific rules before assuming short-term letting is allowed.
What happens if I don't pay body corporate levies?
The body corporate can register a charge on your title and ultimately force a sale of your unit to recover unpaid levies. This is serious — body corporate debts take priority over mortgages in some circumstances.
Can I renovate my unit?
Internal changes within your unit boundaries are generally allowed, but check the rules first. Changes affecting common property, building services, or the exterior need body corporate approval. You'll also need building consent for significant alterations.
How much should the long-term maintenance fund hold?
There's no fixed rule, but it should be adequate to cover the 10-year long-term maintenance plan. Underfunded buildings may face special levies for major repairs. Review the plan and fund balance carefully before purchasing.
Are car parks always included in unit titles?
No — check carefully. Parking may be included as an "accessory unit" on your title, or it may be common property allocated by the body corporate, or it may be separately owned. The Certificate of Title will show what's legally included in your unit.
Get Your Unit Title Search Today
Buying a unit title requires extra due diligence compared to freehold. Start with a comprehensive title search to understand what you're buying.
Certificate of Title NZ provides:
- Unit title searches — your unit's complete title information
- Unit plan copies — showing boundaries and ownership interests
- Fast delivery — within 2 hours
- Expert service — we understand unit title complexities
Need a Title Search?
Get your official Record of Title delivered in 2 hours. Council-accepted format, expert-reviewed.
Order Now — $42.90 NZDConsidering a unit title purchase? Contact our team for expert title search assistance — $129.00 NZD.
