An owner in a Wellington apartment building had suspected for months that their body corporate manager was awarding contracts to a company connected to someone at the management firm. When she asked directly, the manager said there was no conflict. When she asked for the contract documentation, it was slow to arrive. When it did, it named a company that turned out to share a director with the management firm. She took it to the committee, armed with the code of conduct that now sits in the Unit Titles Regulations. Within six weeks the contract had been unwound and the management agreement was under formal review.
The body corporate manager code of conduct came into force in May 2024, as part of the final phase of the Unit Titles Act changes. It isn't aspirational — it is a set of legal obligations, and every management contract entered into since then must require the manager to comply with it.
So what does the code actually require? Start with competence: managers must exercise due care, skill and diligence, and understand the Unit Titles Act and Regulations well enough to do the job properly. A manager whose knowledge of the law stopped being current five years ago isn't meeting that standard.
Then honesty and good faith. Managers must act honestly and fairly in their dealings with the body corporate and owners, provide accurate information, and keep the body corporate informed about significant issues affecting it. This is where the Wellington manager fell short — asserting there was no conflict of interest when there was one.
The code also requires managers to act in the body corporate's best interests — not their own firm's. That includes taking reasonable steps to make sure the body corporate is getting competitive prices for goods and services, which is aimed squarely at the cosy contractor arrangements that have given parts of the industry a bad name.
Confidentiality matters too. Managers deal with personal information about owners and sensitive financial information about buildings. They are required to handle that information appropriately and not disclose it to parties who have no legitimate reason to have it.
And finally — arguably the most practically significant — conflicts of interest. A manager who has a financial interest in a contractor they recommend has a conflict. A manager whose firm has a commercial relationship with a supplier they are steering the body corporate toward has a conflict. Conflicts aren't automatically prohibited — but they must be disclosed proactively and transparently, not discovered by an owner doing their own research.
What happens when a manager falls short? The code is baked into the management contract, so the body corporate can act on a breach directly — up to and including termination on the grounds the contract must now spell out. Disputes can go to the Tenancy Tribunal. And since May 2024, MBIE has monitoring and enforcement powers of its own: it can require managers to produce documents, issue improvement notices, and apply to the Tribunal for pecuniary penalties. These are real consequences, not just procedural exercises.
For committees evaluating their manager: the code provides a useful framework. Is your manager keeping you accurately informed? Are contracts awarded through a clear, conflict-free process? Are owner communications handled fairly and consistently? If the answer to any of these is uncertain, asking directly — and documenting the response — is a reasonable thing to do.
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