Relief for Residential Investors In Large Scale Remedial Works

Owners may be aware the IRD has reviewed a large number of elements of the tax legislation.  Included and focussed on a policy decision to encourage growth in NZ’s housing stock is the issue of purchasers of new builds being exempt from the removal of interest deductions on borrowings on residential investment properties.


Following a comprehensive discussion  paper the first reading of the Bill passed through Parliament and moved to Select Committee stage.  BBCL and others made submissions suggesting the new-build exemption should be extended to expenditure on existing dwellings needing major repairs (essentially leaky buildings and earthquake impacted buildings).


BBCL Director, Craig Leishman, addressed the Select Committee, over the logic of increasing the exemption to include existing complexes whereby major remedial works serves to increase the life of housing stock and to improve the quality of such stock.


Craig submitted that by encouraging and supporting an exemption for significant remedial repairs this would prevent existing dwellings from falling out of the current housing stock.  If not included, housing suitable for refurbishment may be seen as a commodity and demolish and rebuild would result simply because of the tax settings.


BBCL is pleased to note its submissions were well received and it is now proposed the exemption for new-builds will be extended to include leaky buildings that have been reclad (at least 75% of the dwelling) and with a code of compliance issued on or after 27 March 2020.


The new-build exemption will also apply to many earthquake rating impacted buildings and permit interest deductions for 20 years.  The exemption over interest claims are transferrable to subsequent purchasers during the 20 year period.


At this stage it is unclear when the next reading of the Bill will occur.   It does look extremely likely investors borrowing to carry out significant repairs will enjoy interest deduction relief on residential units which undergo recladding.


Link to full reports below:


Please let us know if you would like any further advice on the details of the proposals.


BBCL thanks supporting submitters PWC and HA law who supported BBCL’s submissions.

COVID-19 – Guidance for Isolating in Apartments

This guide for residents and Body Corporate Committees outlines the prevention and control procedures for COVID-19 cases self-isolating in apartments. Dwellings with 10 or more units, that are either multi-storey or multiple titles under the one roof with one entry and exit to the building fall under the Unit Titles Act 2010 and will have a Body Corporate in place to carry out the general management of the building. Body Corporates can have a Committee who provides this management function, and Committees may appoint a Building Manager to oversee the day-to-day maintenance and running of the building.

Read the Full Guide Here


Construction Contracts Act 2002 (CCA)

Most owners will be aware an Act of Parliament governs construction contracts (commercial and residential) and imposes various obligations on both the contractor and the principal of the contract (i.e. the owner or Body Corporate).

One of the key issues governed by the CCA is the process of making payments and the format of claims.  In this regard:

  1. Since December 2015 payment claims under construction contracts must be accompanied by a Form 1 notice.  The Form 1 notice is a prescribed form in the Regulations which explains the process for the principal to respond to a payment claim.  It also sets out the consequences of not responding in time and not paying the claimed or scheduled amount.
  2. If the correct form is used, then if a payer does not respond within the requisite time set out the payment schedule, then the principal is liable to pay under s 22 the entire amount of the claim on the due date for the payment.
  3. Where Section 22 applies, the Courts and adjudicators will enforce the contractor’s right to payment and not circumvent it simply because the principal may have a counter claim or disagrees with the claimed amount.
  4. From the contractor’s perspective it is important the form is correct, as an invalid payment claim will not trigger the default obligations on the payer to pay.
  5. The case law indicates Courts will not require strict adherence to the CCA requirements and therefore a technical non-compliance will not normally invalidate a payment claim.  Importantly “the complete absence of a Form 1 notice is a substantive breach and therefore invalidates the entire payment claim”.
  6. To object to a payment claim, the principal needs to set out the reasons for the difference between the amount in the claim and the amount the principal schedules to pay.  In this respect the Court has affirmed:
    • Deductions by way of a percentage is acceptable, subject to there being sufficient reasons for the percentage figure.
    • The absence of reasons for scheduling lesser percentages for variations was, in the recent Fletcher v Spotless case found to be inadequate because of the absence of reasons.
    • Fletcher’s referencing “under assessment” was also held insufficient for the purposes of Section 21(3) as there was no indication of the purpose of the assessment.
    • Where contra charges are made, there needs to be specific detail as to how the charges arose and the basis upon which they were calculated.

Key Message for Principals and Body Corporates

  1. The Fletcher case demonstrates the payment schedule must indicate reasons for each deduction.
  2. The sufficiency or otherwise of the reason and the consequence of an insufficient reason is, to some extent, dependent on the size of the deduction and the context of the payment claim as a whole.
  3. Where a relevant deduction is significant, more detailed reasons are likely to be required and non-compliance is more likely to invalidate the entire payment schedule.

In drafting payment schedules, where deductions are made, the key is to give the contractor “full and unequivocal notice of all areas of differences or dispute” to enable it to assess future options. 

Boutique Body Corporate & Community Management – Covid-19 Update

Update: 30/03/2020 This page will be updated as the situation evolves.

At Boutique Body Corporates Ltd (BBCL) our mission statement includes providing peace of mind for owners and investors.   Now, more than ever, we want to reach out and let you know that we are here for you.  We will be working with you and your committee to establish protocols and guidelines for community living environments that will hopefully aid in slowing the spread of Covid-19. When it comes to community living, all owners have a duty of care to make sure the property is a safe environment for everyone.

How to stay in touch:

Our office is now closed but you can continue to contact us the same way you usually do.  The BBCL team are all operating remotely and can assist if you have questions or concerns about your property or what coronavirus means for your body corporate or community.


Obviously, this is a fluid and currently rapidly escalating issue and we will continue to host general and committee meetings but, for now, our presence will be limited to a virtual environment. Use of video and teleconference technology will play a vital role in reducing the impact of COVID-19 on people and businesses.

We have various options available to conduct meetings by video and teleconference that will enable you to participate via your own controlled environment.  Participation by way of proxy or postal voting is also available for everyone as usual.

What you can do:

Let us know immediately if occupant/s in your property have a confirmed case of Covid-19 or a self-isolating due to recent overseas travel or close contact situations.  We must be able to notify service contactors attending to any emergency/urgent maintenance on infrastructure and services of the current status of all occupants to ensure issues can be attended to promptly.

Please contact your body corporate manager or email with details.

Stay informed and up to date via The Ministry of Health , World Health Organisation and The New Zealand Government

Be kind – kindness is an incredibly powerful way to show you are united against COVID-19. We can all make a huge difference by:

  • Checking in on neighbours to see if they need support.
  • Looking after anyone that needs help.
  • Dropping supplies to those who self-isolating.


We urge all of you to:  BE SAFE


The Airbnb Challenge

Whilst Airbnb has created an economic opportunity for numerous residential owners, it has brought with it a number of challenges in Body Corporate administration. The conversion of many units from long term residential to short term letting brings with it some inevitable pressures on facilities and occupants which need to be managed to deliver equitable outcomes to all.


A recent Tenancy Tribunal decision secured on behalf of a BBCL Body Corporate emphasises the Tribunal will take action where utilisaiton of a unit breaches the quiet enjoyment rights of other unit occupants.


The Body Corporate concerned was subjected to roudy behaviour by Airbnb tenants which caused continuing conflict with other occupants and disturbed them on a regular basis.  Over a period of 4 months a number of breach notices were issued against the landlord of the unit but were ignored.  With little alternative option the Body Corporate applied to the Tenancy Tribunal for relief citing rules prohibiting:

  1. Use other than residential without the Body Corporate’s prior consent.
  2. Adverse noise and conduct.


The judgment of the Tribunal issued on 3 February 2020 granted the Body Corporate an order:

Prohibiting the owner from renting or leasing the premises as short term accommodation in the nature of holiday accommodation of a period of less than 3 months.


Since receipt of the judgment the owner has sought the Body Corporate’s approval for consent and put forward a range of control options.


Whilst the judgment does not extend to approving the right of a Body Corporate to prohibit Airbnb or other short term accommodation, it clearly sets out the Tribunal can and will restrict letting when an owner simply fails to recognise the obligations of ownership and fails to abate a continuing nuisance.



  • All occupants must comply with lawful Body Corporate rules
  • The Tribunal will prohibit short term letting in the face of repeated rule breaches


A copy of the judgment can be obtained on the link below

UTA_Tribunal_Order 030220

Website/Security Cameras and Privacy

Relevant Act. The Privacy Act 1993.

The arrival of relatively low cost high-resolution cameras has led to an increase in the use of these devices in residential unit properties.  We thought it useful to outline some guidelines for our property owners and committees.

The normal objective of private security cameras is to prevent and reduce the incidence of crime and to identify criminal offenders for the police and the local community.

Any cameras installed for the above objective need to comply with the Privacy Act 1993 which outlines detailed guidance on the operation and privacy aspects of camera systems (CCTV).

The pertinent (but not exhaustive) aspects that camera operators and owners need to be aware of are as follows:

  • Owners and operators of crime prevention cameras are accountable for their actions.
  • Unless it can be justified (e.g. an offence is taking place) cameras must not track or zoom in on members of the public.
  • Location of cameras should be clearly signposted to notify the public a camera is or could be operating and contact information needs to be included on signs.
  • Anyone using crime prevention cameras is collecting and handling personal information and must do so in a way that does not breach the Privacy Act 1993.
  • Personal information must not be collected or intrude to an unreasonable extent upon the personal affairs of any individual concerned.
  • From a police perspective a complaint involving aiming cameras directly into neighbours living areas could lead to an offence such as intimidation or harassment.
  • All images stored from cameras should be stored securely and erased no later than one month after recording.

Boutique understands security is important but so is the privacy of neighbours and fellow residents.  We suggest if clarification is required you refer to the act in question which can be found at.