Buying an Apartment: Unit Titles Due Diligence
🏢 Buying into a shared building
Most apartments and many townhouses in New Zealand are sold as unit titles under the Unit Titles Act 2010. Buying one is not like buying a standalone house on its own section. You buy your own unit and, at the same time, an undivided share of the common property such as the roof, the exterior walls, the lifts, the hallways and the grounds, and you automatically become a member of the body corporate that owns and runs those shared parts. That shared ownership brings ongoing levies, collective decisions, and a paper trail you are entitled to inspect before you commit. The good news is that the law forces the seller to hand over a great deal of information through mandatory disclosure statements, so a careful buyer can spot a starved maintenance fund, a looming special levy, a leaky-building history or an earthquake rating well before settlement. This guide is the whole due-diligence process for a unit title, from reading the disclosure to checking the minutes and the fund, with four worked New Zealand examples.
How this guide differs from the levies guide
Our body corporate levies guide focuses on the levies themselves: the operating fund, the maintenance fund and special levies. This guide is broader. It is the full due-diligence checklist for buying a unit title: understanding what you own, working through the disclosure statements, reading the minutes and financials, and hunting for the red flags that turn a dream apartment into an expensive mistake.
What "unit title" actually means
| You own | What it is |
|---|---|
| Your principal unit | Your apartment, office or shop, defined by the unit plan |
| Any accessory units | Extras tied to your unit, such as a car park or storage cage |
| A share of the common property | An undivided share of the roof, exterior, lifts, hallways and grounds |
| Body corporate membership | Automatic membership of the body corporate, with voting rights and levy obligations |
Owning a unit title makes you a member of the body corporate for as long as you own the unit. You must pay your levies, you share in the common property, and you are bound by the body corporate's operational rules. This is a package deal, so the health of the body corporate is part of the value of the unit.
💰 The body corporate, levies and the maintenance fund
The body corporate
The body corporate is made up of all the unit owners. It manages the common property, arranges insurance for the building, sets and enforces the operational rules, and makes decisions at general meetings, usually delegating day-to-day work to a committee and often a professional body corporate manager. Decisions are made by vote, and your say and your levy share are usually tied to your unit's ownership interest.
Ownership interest and utility interest
Your ownership interest reflects your unit's value relative to the whole development, and it generally drives your share of the levies and your voting weight. A related figure, the utility interest, can be used to share particular costs differently where that is fairer. In most buildings the two are the same, but check, because a larger or more valuable unit typically carries a larger share of the costs.
The two funds
Levies are the payments owners make to run and maintain the building. They usually split into two funds.
- The operating fund: Pays the regular running costs, such as building insurance (often the biggest single cost), the manager's fees, cleaning, lifts, lighting and shared utilities.
- The long-term maintenance fund: Money set aside for big, infrequent works that are years away, such as repainting the exterior, replacing the roof or refurbishing the lifts.
The long-term maintenance plan
A body corporate must maintain a long-term maintenance plan, often shortened to LTMP, that looks ahead over at least 10 years and forecasts the major works and their likely cost. The long-term maintenance fund is built up through levies so the money is there when the work falls due. A realistic plan matched by a well-funded fund is the sign of a well-run building.
Special levies
When a cost arises that the funds do not cover, the body corporate can strike a special levy, a one-off charge on owners split by ownership interest. Special levies for strengthening, re-cladding or major repairs can run to tens of thousands of dollars per unit and can land with little warning, which is why the records are worth reading closely.
📋 Disclosure statements, records and red flags
The Unit Titles Act 2010 forces the seller to give you formal disclosure. The regime was strengthened by the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022, with the key disclosure changes taking effect on 9 May 2023.
You may read older guidance describing three disclosure statements, including an "additional disclosure statement on request". That third statement was repealed on 9 May 2023. As at July 2026 there are two mandatory disclosure statements: the pre-contract disclosure statement and the pre-settlement disclosure statement. The old additional statement is gone because most of its content was folded into a much stronger pre-contract statement, so you now get more up front, not less.
1. The pre-contract disclosure statement
The seller must give you this before you sign the sale and purchase agreement. Since 9 May 2023 it must contain far more, so it is the heart of your due diligence. It includes:
- The body corporate levies for the current financial year and how they are worked out
- Your unit's ownership interest and utility interest
- The body corporate's financial statements for the previous three years
- The minutes of general meetings and committee meetings for the previous three years
- The long-term maintenance plan and the current balance of the long-term maintenance fund
- Any maintenance or improvements proposed for the next three years
- Whether the body corporate or committee has actual knowledge of weathertightness issues, earthquake-prone issues, or other significant defects that may need remediation
- Any current or pending legal proceedings involving the body corporate
If you are not given the pre-contract disclosure statement, or it is late, incomplete or inaccurate, you may be able to cancel the agreement or delay settlement. That protection only helps if you actually read it, so go through it line by line, ideally with your solicitor.
2. The pre-settlement disclosure statement
After the agreement is signed and before settlement, the seller must give you the pre-settlement disclosure statement at least five working days before the settlement date. Working days exclude weekends, public holidays and the period from 25 December to 2 January. Crucially, the body corporate certifies that the information is correct. It includes:
- The current levies and their payment terms
- Any unpaid levies or money owed on the unit
- Any interest owing on unpaid amounts
- Any unpaid metered charges
- Any changes to the body corporate rules
- Any legal proceedings involving the body corporate
If the seller does not provide it at least five working days before settlement, you may be able to delay settlement until you have had it for the required time.
Reading the minutes and financials
The three years of minutes and financial statements in the pre-contract disclosure are gold. The minutes reveal disputes, defects, proposed works and any special levy that has been discussed or approved. The financial statements show whether the funds are healthy and whether owners are in arrears. Read them for what is coming, not just what has been.
The red flags to hunt for
- A thin long-term maintenance fund: Big works ahead with little money set aside points to a future special levy.
- A looming special levy: A resolution in the minutes for strengthening, re-cladding or major repair that you would inherit.
- Weathertightness or leaky-building history: A disclosed claim or repair, common in certain 1990s and 2000s buildings, can mean huge remediation costs.
- An earthquake rating below 34% NBS: An earthquake-prone building carries a notice, a deadline and a strengthening bill. See our earthquake-prone buildings guide.
- Levy arrears across many owners: Widespread arrears can starve the funds and signal a troubled building.
- Incomplete disclosure: Missing years of financials or minutes is itself a warning, and a possible ground to delay or cancel.
A cheap levy can mean the maintenance fund is being starved, setting up a big special levy later. A slightly higher levy that keeps the fund healthy is often the safer buy. Judge the building on its records and its fund, not on the headline levy alone.
🔢 Worked New Zealand Examples
These four examples use illustrative figures to show how to read a unit title's records. Your own building's numbers will differ, so treat them as a method rather than a quote.
Situation: Mereana is looking at a unit in a 30-unit building. The long-term maintenance plan in the disclosure forecasts $900,000 of works over the next 10 years. The long-term maintenance fund currently holds $120,000, and the building collects $60,000 a year in long-term maintenance levies.
Is the fund on track?
Situation: Daniel reads the three years of general meeting minutes in the pre-contract disclosure. A resolution passed last year approves re-cladding the building at an illustrative $2,400,000, funded by a special levy. The unit he wants has an ownership interest of 3.5%.
His share of the approved levy:
The seller may not raise the levy in conversation, but it is right there in the disclosed minutes. Because the levy was approved before Daniel buys, he could inherit the $84,000. He should negotiate the price down to reflect it, agree in writing who pays, or walk away.
Situation: Sione is deciding between two similar apartments. Apartment A charges $6,500 a year in levies. Apartment B charges $3,800. B looks like the bargain, so he checks how each levy is split.
Breaking down the levies:
Situation: Ana works through the pre-contract disclosure for a 40-unit building and finds four warning signs at once.
The red flags:
Sizing the weathertightness risk:
The missing two years of financials is not a minor slip, it is a possible ground to delay or cancel, and a sign the seller may be hiding something. Combined with a weathertightness claim, an earthquake-prone rating and arrears, Ana is looking at a building with serious, expensive problems. Her solicitor should review everything before she goes near settlement.
Related tools and guides
- Mortgage calculator
- Borrowing capacity calculator
- Deposit gap calculator
- Home insurance calculator
- Body corporate levies guide
- Earthquake-prone buildings guide
- First home legal guide
- Property title types guide
- Buying a Home With Family, a related guide in the same area.
- Buying Off the Plans, a related guide in the same area.
- Buying Your First Car Guide, a related guide in the same area.
- Buying a Car: Cash vs Finance - New Zealand, a related guide in the same area.
- Renting vs Buying in New Zealand, a related guide in the same area.
Verified July 2026 against: the Unit Titles Act 2010 and the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 (key disclosure changes in force 9 May 2023) on legislation.govt.nz; the Ministry of Business, Innovation and Employment unit titles guidance (unittitles.govt.nz) for the pre-contract and pre-settlement disclosure statement contents and timing, the body corporate, ownership and utility interest, and the long-term maintenance plan and fund; the Real Estate Authority (rea.govt.nz) unit title guidance confirming that the additional disclosure statement on request was repealed; and settled.govt.nz on buying and selling a unit title property. Figures are illustrative. This is general information, not legal advice, so have a solicitor review the disclosure and title before you buy.
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Situations like yours. The 4 situations worked through above sit alongside 40 more about buying a first home, each with the sums shown.