Important Update and Clarification

By Brent Cowles | Posted: Monday December 17, 2018

Prior to Christmas we would like to give you an update and clarify some points regarding the Body Corporate.

Hi team,

You will have had some correspondence from the Body Corporate over the last couple of weeks.  We have some major concerns about this and would like to share these concerns with you as unit owners and also get your feedback please.

We have a strong belief that the current Body Corporate is not of legal standing. The following is from the NZ Tenancy website stating that:-

If you are involved in a new development, there are some things you need to know to get the body corporate up and running:

  • the body corporate must have its first annual general meeting as soon as possible and not more than 6 months after the date the unit plan was deposited or the first unit was sold
  • at the first annual general meeting the body corporate needs to elect a chairperson
  • at the first annual general meeting the body corporate should also decide whether they need a body corporate committee
  • when the developer has sold enough units that they no longer have control over the development, they must give the body corporate notice of that fact and call a meeting. At that meeting, the developer must provide the body corporate with a turn-over disclosure statement and disclose any interest they have in contracts made by the body corporate.

 There has been no attempt to organise a timely AGM and in the email received yesterday, it has been stated that they are not going to do this until Queens Birthday Weekend which is well outside of the required timeframe. We have requested a copy of the minutes of any meetings previously held and for details of members but nothing has been forthcoming.

Clarification

In the email dated 10 December the Body Corporate has stated "Large levy arrears from the hotel owner compromise the collective ability of the body corporate to pay for such contracts. This is being pursued legally until it is resolved."

I would like to clarify this statement as many have contacted us individually to ask about this.  Our portion of the insurance premium is close to $10,000.  We have a copy of the policy which on independent advice has a number of clauses and is not designed for a commercial premises. It does not cover the fact that we have a commercial kitchen or allow for production of food.  This policy also refers to a schedule which would indicate the sums insured, but this was omitted and our request to see the sum insured has not been forwarded.  We have the option, with the Body Corporates agreement, to opt out of the blanket insurance and seek our own.  We have asked for this so that we can get a cover that is specific to hotels, covers us for operating a commercial kitchen and production of food, and that this does not effect or have to be subsidised by other unit holders.
I am sure if you were in a position where you were being asked to pay $10,000 for a policy that does not cover you, a similar stance would be taken.  I have concern that the developer is also the Body Corporate Chairperson (although our request to have this confirmed has also fell on deaf ears), and is also the owner of the company providing the insurance policy (a fact I know, his son is the agent providing it).  A conflict of interest springs to mind.

I would also like to note in the most recent email that there are charges listed for Admin of Building Warrant of Fitness & Fire Protection, Inspection & Monitoring.  To my knowledge there is no Warrant of Fitness required for your individual units.  We as a hotel have to have one which is done at the request of the developer, independently from the Body Corporate. Also with the regard to the fire inspection and monitoring, we are the only Unit that has a full fire alarm and again we have an independent contract to have this monitored and inspected.  Your units have smoke alarms that are not monitored, they just need to be checked and have batteries replaced.
The other point to note is that it has a charge for a Phone & PABX Equipment.  This does not exist either so I am not sure what this charge is for.

I think some questions need to be asked and answered but to date no information our lawyer has requested has come back which is of concern.  I believe our best option is to call an Extraordinary General Meeting.  If more than 25% of owners request this, the body corporate chairperson must call an EGM.

I would please request that as owners you come back and give us the support to call an EGM so that we can personally speak to the Chairperson and get any questions we have answered, so that we can move forward with confidence. 

Please call me direct if you wish to discuss - 027 5255505

OCCUPANCY

Now for some great news, Occupancy is constantly growing.  For an accommodation complex that is new to the market, things have started well and I expect to see more growth. The image below shows the occupancy stats.

WIFI

This week we are installing a wifi network that will cover the entire complex.  Vouchers will be provided and will give users unlimited internet for the time of their stay.  If you wish to take advantage of this offer, there will be a monthly charge of $30 per unit. It is one of the most requested features and some of the only negative feedback we get. I am sure you will agree this type of system is far more economical than individual connections. Also the fact that there are only 10 phone lines available for the entire complex and three of them are already in use, restricts individual connections.  This will include support to guests. Please let us know if you would like us to provide this service for your unit.  We will provide an information sheet for each unit that would like it.

THANK YOU
A big thanks to all who have trusted us to take care of their units.  There have been a couple of bumps for some with some rain damage but all seems to be sorted now.  We wish you all a very Merry Christmas and the Happiest of New Years.  Please don't hesitate to call if we can assist in any way.

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