More multi-unit developments are being built as a Residents’ Association (RA) or Residents’ Society (RS) rather than Bodies Corporate (BC) as there are no common areas within the buildings.

It’s hard not to notice the amount of development occurring around Auckland suburban streets. I live out West, and in our street alone, which has 157 addresses, at least half a dozen sites are under development. The smallest site has five two story townhouses squeezed onto a quarter acre site (1012m2) that previously had a standalone dwelling with garden areas. The largest development has 14 townhouses being built on a 1275m2 site but has three levels rather than two. 

Sizings for these types of developments vary. We currently manage one that has only three units and our largest has over 500. The average size is typically around 25 units.

There are some major differences between a RA or RS and a Body Corporate.

Common Areas

RA or RS developments are likely to have only exterior areas common to all owners like the driveway, underground infrastructure, maybe a shared letter box, gardens and exterior fences. Body Corporates have shared/common property within the building such as a lift, foyer, hallways etc.

There can however can be a Body Corporate building located within the wider governance of a RS/RA.

Legal Obligations

Unlike a Body Corporate, a RA or RS does not have a legal obligation to obtain insurance or a Long Term Maintenance Plan. As with a cross lease property, it makes sense for a RA or RS to hold a master insurance policy. This policy is on behalf of all owners rather than assuming all owners will get the appropriate cover individually. A master policy can also cover the common areas.

Ownership

You legally own the land under your townhouse in a RA or RS. This differs from a Body Corporate where the Body Corporate owns the land on behalf of all the owners.

Rules

The “rules” for managing a RA or RS are set out in their Constitution and Incorporated under the Incorporated Societies Act of 1908. Like the Operational Rules of a Body Corporate under the Unit Titles Act, the Constitution is binding on all owners within the RA or RS. When an owner sells they must provide a Certificate of Indebtedness to the purchaser who in turn must complete a Deed of Covenant back to the RA or RS. An owner selling in a Body Corporate must produce a Disclosure Statement, and the new purchaser must complete a Section 85, which is a legal contact details registration form in accordance with the Unit Titles Act 2010.

Housing intensification however, like a multi-unit development on one site, doesn’t always come with an associated infrastructure upgrade. My neighboring developments aren’t building any new roads or parks to service the resulting influx of people to the community. Parking problems will be inevitable as each townhouse generally has three or four bedrooms but just one car park space. Some will have a one-car garage that they may or may not use as a space for a car. The solution for people is usually street parking because the driveway needs to be kept clear at all times. A RA or RS has no say on what happens on the street – that’s for the Council.

On the positive side, owners/renters in a multi-unit development are likely to all get to know one another because of the close proximity of their neighbours. There is generally only one way in and one way out in newer developments built on quarter acre sections. This structure should create an open and productive forum for owners to work closely with their managers (such as apm) and make the administration of the common areas straight forward.

RA or RS developments are the future of Auckland after the passing of the Housing Enabling Bill in December 2021. Explore your street as more and more of these types of developments will emerge this decade.

Kind regards

Steven Garland

[email protected]

General Manager – Body Corporate
apm

Contact our Body Corporate Management team via the online form below.