New Zealand Legislation: Regulations
Regulations are laws made under Acts
The exemptions in clause 5 are subject to the conditions that—
(a) subscribers for specified securities have, before subscription, received from the developer a copy of each of the following documents:
(i) the rules and any agreement for the management of the specified entity's affairs:
(ii) a specimen of all deeds or agreements providing for the transfer of communal facilities from the developer to the specified entity or for the lease or licence of communal facilities by the specified entity:
(iii) a specimen of the sale agreement:
(iv) a specimen of all material instruments that will be executed by subscribers for specified securities, deeds, or agreements that contain provisions concerning the rights and obligations referred to in paragraph (b)(iii); and
(b) subscribers for specified securities have, before subscription, received from the developer a document that sets out—
(i) a description of the areas of land that make up the development:
(ii) a description of the communal facilities that are intended to be owned, leased, licensed, maintained, administered, or operated in whole or in part by the specified entity at the completion of the development:
(iii) a description of the rights and obligations of members or shareholders of the specified entity in relation to the communal facilities and the specified securities:
(iv) a description of the voting rights of the subscriber, as a member or shareholder of the specified entity, in respect of the specified securities (including a statement as to whether the rules provide for voting by classes of members or shareholders, or by a representative, in relation to particular matters); and
(c) in relation to a development that the developer represents or agrees will be completed in stages, subscribers for specified securities have, before subscription, received from the developer a document that sets out,—
(i) for each stage of the development, the intended communal facilities and when those facilities are intended to be transferred, leased, or licensed to, or completed or constructed by or for, or procured by, the specified entity; and
(ii) the material risks of those communal facilities not being transferred, leased, or licensed to, or completed or constructed by or for, or procured by, the specified entity at each stage; and
(iii) a statement as to what stage the development is at, or expected to be at, at the end of each calendar year within the period beginning on the date of commencement of the development and ending on the estimated date of the completion of the development; and
(d) subscribers for specified securities have, before subscription, received from the developer a statement of levies, fees, or charges that are estimated to be, or were, payable by members or shareholders of the specified entity in relation to the development and the developed properties for each calendar year in the period beginning on the date of commencement of the development and ending on the estimated date of the completion of the development that—
(i) comprises estimates, historical data, or both; and
(ii) is itemised in relation to each of the different communal facilities; and
(iii) contains a statement as to whether the levies, fees, or charges payable are fixed, variable, or based on the capital value of the developed property; and
(iv) contains, if a levy, fee, or charge is variable, a statement of the factors that influence how the levy, fee, or charge can vary; and
(v) contains, if a levy, fee, or charge is based on the capital value of a developed property, a statement of a formula by which the levy, fee, or charge can be calculated, together with a worked example; and
(vi) contains a statement of the principal assumptions on which any estimates are based; and
(vii) contains a statement as to whether the estimates have been reviewed by an independent third party acting in his or her professional capacity or consist only of the expression of an opinion of the developer; and
(e) it is a term of the offer that the rules provide that the specified securities may be subscribed for by entering into an agreement to purchase a developed property; and
(f) it is a term of the offer that the rules provide that,—
(i) in the case of a specified entity that is a society, only an owner of a developed property or an incorporation member may be a member of the specified entity; and
(ii) in the case of a specified entity that is a company, only an owner of a developed property may be a shareholder of the specified entity; and
(g) in the case of a specified entity that is a society, it is a term of the offer that the rules provide that incorporation members may continue as members of the society only for so long as is reasonably necessary to satisfy the membership requirements of the Incorporated Societies Act 1908 but, in any event, must cease to be members of the society on or before the sale of the last developed property by the developer; and
(h) it is a term of the offer that the rules provide that every owner of a developed property is entitled to be a member or shareholder of the specified entity; and
(i) deposit moneys paid by a subscriber for specified securities are held in any of the following trust accounts until the sale agreement becomes unconditional:
(i) a nominated trust account operated by a lawyer, an incorporated law firm, a conveyancing practitioner, or an incorporated conveyancing firm under the Lawyers and Conveyancers Act 2006; or
(ii) a trust account operated by a real estate agent under the Real Estate Agents Act 1976; or
(iii) a trust account operated by a trustee company under the Trustee Companies Act 1967; and
(j) no settlement of a sale agreement is completed until,—
(i) if the developer represents or agrees that certain communal facilities will be owned, leased, or licensed by the specified entity at the time of settlement of the sale agreement, those communal facilities are owned, leased, or licensed in accordance with that representation or agreement; and
(ii) if any interest in land is included in the communal facilities to be owned or leased by the specified entity at the time of settlement of the sale agreement, that interest is registered on the computer register for that land at that time; and
(iii) if the developer represents or agrees that certain communal facilities will be completed or constructed by or for, or procured by, the specified entity at the time of settlement of the sale agreement, those communal facilities have been completed, constructed, or procured in accordance with that representation or agreement; and
(k) in respect of any communal facility that the developer represents or agrees will be owned, leased, or licensed by the specified entity at the completion of a certain stage of the development or at the completion of the development, it is a term of the offer that—
(i) a deed of transfer, lease, or licence for that communal facility has been executed in favour of the specified entity; and
(ii) in respect of a communal facility that is an interest or estate in land, the transfer or lease is registered immediately after the subdivision of the land and the issue or creation of a separate computer register for an estate in fee simple or leasehold in respect of the land on which the communal facilities are to be situated; and
(iii) the deed of transfer, lease, or licence has been provided to the specified entity; and
(l) if the development is advertised on the basis that the specified entity will own, lease, license, maintain, administer, or operate certain communal facilities in whole or in part at the completion of certain stages of the development or at the completion of the development, it is a term of the offer that the specified entity owns, leases, licenses, maintains, administers, or operates those communal facilities in whole or in part at the completion of those stages or at the completion of the development (as the case may be); and
(m) it is a term of the offer that if a representation or agreement is made by the developer to the effect that the developer or an associated person of the developer will make a contribution or payment to the specified entity for the purposes of the specified entity's activities,—
(i) a deed has been executed to this effect in favour of the specified entity; and
(ii) the deed has been provided to the specified entity; and
(n) if communal facilities that are estates or interests in land are leased, or to be leased, by the specified entity,—
(i) the fee simple estates in those communal facilities are, or will be, owned by all of the members or shareholders of the specified entity; or
(ii) the members or shareholders of the specified entity hold, or will hold, a leasehold interest in the developed properties, and the term of the lease for the communal facilities to the specified entity (as specified in the deed of lease or lease agreement) must not end earlier than the term of any leasehold interest in the developed properties that is offered by the developer to the subscribers for specified securities; and
(o) it is a term of the offer that the rules provide that the specified entity is only permitted to carry on 1 or more of the following activities:
(i) owning, leasing, licensing, maintaining, administering, or operating the communal facilities:
(ii) issuing licences to members or shareholders of the specified entity that confer rights on those members or shareholders to use the communal facilities, and administering and enforcing those licences in accordance with the rules:
(iii) owning, leasing, licensing, maintaining, administering, or operating land outside of the development if the specified entity is required to own, lease, license, maintain, administer, or operate that land in accordance with a resource consent for the development:
(iv) managing and administering the specified entity and administering and enforcing the rules:
(v) administering and enforcing a scheme for the regulation and control of matters relating to the use, repair, decoration, and landscaping of, and provision of services to, developed properties:
(vi) providing and maintaining services, utilities, facilities, and benefits to developed properties or for the development:
(vii) any incidental activities that the specified entity considers are beneficial for members or shareholders of the specified entity; and
(p) it is a term of the offer that the rules provide that—
(i) all moneys paid to the specified entity by its members or shareholders are applied only for 1 or more of the activities referred to in paragraph (o); and
(ii) members or shareholders of the specified entity have the right to use the communal facilities in accordance with the rules; and
(iii) members or shareholders of the specified entity have the right to vote at meetings of members or shareholders of the specified entity; and
(iv) on a liquidation of the specified entity, each member or shareholder of the specified entity has the right to share pro rata with all other members or shareholders of the specified entity in a distribution of any surplus assets of the specified entity; and
(v) levies, fees, or charges payable to the specified entity by its members or shareholders are determined only by a resolution of the members or shareholders, or of a committee of the members or shareholders, passed in accordance with the rules; and
(vi) the specified entity provides to a prospective purchaser of developed property, within 5 working days after receiving a request, a copy of the most recent financial statements of the specified entity; and
(vii) financial statements of the specified entity complying with the Financial Reporting Act 1993 are audited annually and are distributed to members or shareholders of the specified entity as soon as is reasonably practicable after each audit is completed and, in any event, no later than 5 months after the balance date of the specified entity; and
(q) in the case of a specified entity that is a society, the society does not have as objects—
(i) the carrying on of trading activities; or
(ii) the carrying on of business for profit; and
(r) in the case of a specified entity that is a company, the company's constitution prohibits—
(i) the carrying on of trading activities; or
(ii) the carrying on of business for profit.
