Body corporate manager code of conduct

There are new provisions relating to body corporate managers in the Amendment Act. Body corporate managers were not previously recognised in the Unit Titles Act.

The Amendment Act includes a new code of conduct, requiring body corporate managers to meet prescribed ethical and professional standards.

Read the new code of conduct for body corporate managers(external link) — New Zealand Legislation

Employment or engagement of body corporate managers

Bodies corporate of large unit title developments, where there are 10 or more principal units, must engage 1 or more body corporate managers. A body corporate can opt out of this requirement by special resolution.

The Unit Titles Act allows the Regulator to request relevant information from bodies corporate or body corporate managers if it is reasonably required for its functions and powers under the Unit Titles Act. These functions include monitoring compliance with the Act and investigating complaints. This information retained by the body corporate now includes the following:

• written agreement of body corporate managers’ terms of employment/engagement

Defining a body corporate manager and contract terms

The Amendment Act defines the role and function of a body corporate manager, and the terms that must be included in a body corporate manager’s contract.

A body corporate manager is a person who is employed by a body corporate to provide 1 or more of the following services:

• record keeping and other administrative services
• financial services, including the handling of money belonging to the body corporate or its members
• regulatory compliance services on behalf of the body corporate.

Body corporate managers must perform the functions and duties that:

• the body corporate may lawfully authorise the manager to perform
• that are specified in a written agreement that sets out the manager’s terms of engagement.

Terms that must be included in the contract or agreement with a body corporate manager

The agreement setting out the terms of engagement must include the following terms:

• the manager’s reporting requirements to the body corporate on the performance of the manager’s functions
• the requirement to comply with the code of conduct set out in the Regulations
• requirement for reviews of the manager’s performance at specified intervals, including performance targets
• the grounds for termination and the process for doing so, if met
• the role, if any, of the manager at general meetings of the body corporate
• records, funds, or other things relating to the body corporate that must be returned by the manager to the body corporate when the agreement ends or is terminated
• the date by which things must be returned.

Conflicts of interest

Body corporate managers will need to disclose any conflict of interest to the body corporate committee or chairperson. The body corporate will then need to decide if, and on what terms, the manager can continue to act in respect of the matter concerned.

For deciding what is a conflict of interest, the provisions relating to body corporate committee members apply.

The body corporate committee or chairperson will be required to keep an interests register to record any disclosures made by body corporate managers.

The Unit Titles Act allows the Regulator to request relevant information from bodies corporate or body corporate managers if it is reasonably required for its functions and powers under the Unit Titles Act. These functions include monitoring compliance with the Act and investigating complaints. This includes the following

• Conflict of interest register for the body corporate manager.

If the body corporate manager has a potential or actual conflict

The body corporate must decide if, and on what terms, the body corporate manager can continue to act in respect of the matter concerned.

Acting independently

If a person is engaged as a body corporate manager by more than one body corporate, the manager must act independently for each body corporate in all matters in relation to each body corporate and must not intermix the funds or records of multiple bodies corporate.