Buying an Apartment in NZ: What to Check Before You Sign | Shire Property Blog

Why Apartment Due Diligence Is Different

Buying a standalone house is relatively straightforward — you own the land, you own the building, you make the decisions. Buying an apartment or townhouse under a unit title is a fundamentally different proposition. You're not just buying a home — you're buying into a shared ownership structure with its own rules, finances, and politics.

With concerns about build quality and rising body corporate insurance costs putting off some buyers in early 2026, it's more important than ever to know exactly what you're getting into before signing a sale and purchase agreement.

This guide covers the key areas of due diligence specific to unit title properties in New Zealand — the things that catch apartment buyers off guard.

Understanding Unit Titles in New Zealand

A unit title is a form of property ownership governed by the Unit Titles Act 2010. It applies to apartments, townhouses, and any development where individual units share common property like driveways, stairwells, lifts, or gardens. If you're weighing up ownership types, our unit title vs freehold comparison breaks down the key differences.

When you buy a unit title property, you own your individual unit and a share of the common property. A body corporate — made up of all unit owners — manages the shared areas and makes collective decisions about maintenance, insurance, and rules.

As Settled.govt.nz explains, body corporate fees typically cover insurance, management expenses, contributions to a long-term maintenance fund, and shared services like rubbish collection and cleaning.

The Disclosure Statements You Should Actually Read

Under the Unit Titles Act, sellers are legally required to provide you with two disclosure statements. Many buyers glance at these and move on. That's a mistake.

Pre-Contract Disclosure Statement (PCDS)

The seller must provide this before you enter into an agreement. According to Unit Titles Services, the PCDS includes information about:

Current body corporate levies and what they cover
The long-term maintenance plan and fund balance
Any pending or planned special levies
Body corporate rules and any recent changes
Known disputes, court proceedings, or weathertightness claims
Insurance details for the building

What to look for: Pay close attention to the long-term maintenance fund (LTMF) balance. A healthy fund suggests the body corporate is well-managed. A low or empty fund could mean deferred maintenance — and future special levies landing on your doorstep.

Pre-Settlement Disclosure Statement

This comes closer to settlement and flags any changes since the PCDS. It may reveal new levies, rule changes, or issues that have emerged during the sale process.

The Real Estate Authority provides guidance on what agents and sellers must disclose. If anything looks different from the PCDS, you may want to investigate further with your lawyer.

Body Corporate Finances: Where the Surprises Hide

The financial health of a body corporate can make or break your apartment investment. Here's what to scrutinise.

Regular Levies

These are your ongoing body corporate fees — typically paid monthly or quarterly. They cover day-to-day expenses like insurance, management, cleaning, and contributions to the maintenance fund.

Opes Partners reports that older buildings can have body corporate costs of $6,500 or more per year. Newer buildings with lifts, pools, or gyms can be even higher. These costs sit on top of your mortgage, rates, and personal insurance — so factor them into your affordability calculations.

Special Levies

These are one-off charges for unexpected or major expenses — a new roof, earthquake strengthening, recladding, or replacing a lift. Special levies can run into tens of thousands of dollars per unit, and as an owner, you're obligated to pay your share.

Key question to ask: Has the body corporate raised any special levies in the past five years? Are any being considered? Your lawyer can help you dig into the body corporate minutes for this information.

The Long-Term Maintenance Plan (LTMP)

Every body corporate is required to have a long-term maintenance plan. This document outlines anticipated maintenance and repair work over the next 10+ years and the estimated costs.

A well-funded LTMP with realistic costings is a green flag. A plan that hasn't been updated, or one with a fund balance that's well below projected needs, is a warning sign worth investigating further.

Insurance: The Issue Buyers Overlook

Body corporate insurance has become a significant concern for apartment owners across New Zealand. Premiums have risen sharply in recent years, particularly for buildings in areas exposed to natural hazards like earthquakes and flooding.

As Cotality noted in their 2026 market outlook, body corporate insurance costs are actively putting off some would-be apartment buyers — and for good reason.

What you should check:

What does the body corporate insurance actually cover? Material damage, natural disaster, public liability?
What's the excess? Some earthquake excesses can be extremely high
Has the premium increased significantly in recent years? Ask for the last three years of insurance summaries
Is the building fully insurable? Some older or earthquake-prone buildings struggle to obtain full cover
Are there any exclusions? Weathertightness-related claims are sometimes excluded

You may also want to consider whether you need your own contents and personal liability insurance on top of the body corporate policy. The body corporate covers the building — not your belongings or internal fit-out.

Building Condition: Look Beyond the Paint

A fresh coat of paint can hide a multitude of problems. For apartments, the condition of the common areas and building envelope matters just as much as your individual unit.

What to investigate

Building inspection report: Consider commissioning one that covers both your unit and the common areas. Homeowners Body Corporate Help (HOBANZ) recommends a building condition survey as part of your due diligence
Weathertightness: Is the building a monolithic-clad design from the 1990s–2000s? These are the highest-risk buildings for moisture ingress. Check if any weathertightness claims have been made or settled
Earthquake-prone status: Your LIM report will indicate if the building has been identified as earthquake-prone. Buildings below 34% of New Building Standard (NBS) face restrictions and may affect your ability to get insurance or finance
Consent history: Were all alterations to the building properly consented? Unconsented work in common areas can become everyone's problem

The LIM Report

A Land Information Memorandum (LIM) from the local council is essential for any property purchase, but especially for apartments. Not sure whether you need a LIM or a building report? Our LIM vs building report comparison can help you decide. It reveals natural hazard information, building consents, compliance issues, and any council notices on the property.

For unit title properties, you may want to request the LIM for both your specific unit and the parent property to get the full picture.

Body Corporate Governance: Who's Running the Show?

The body corporate is essentially a small democracy. The quality of its governance directly affects your quality of life and the value of your investment.

What to review

Body corporate minutes: Read the minutes from the last two to three years of annual general meetings (AGMs) and any extraordinary general meetings. These reveal ongoing disputes, maintenance concerns, financial decisions, and the general tone of the ownership group
Management: Is the body corporate professionally managed, or run by volunteer owners? Professional management generally means better record-keeping and compliance, though it adds to the levies
Rules: Every body corporate has operational rules. These may cover pets, noise, renovations, short-term rentals (like Airbnb), and parking. Make sure you can live with them
Disputes: Are there any current disputes between owners, or between the body corporate and third parties? Ongoing litigation can be expensive and divisive

Your Apartment Due Diligence Checklist

Before committing to a unit title purchase, consider working through this checklist with your lawyer:

[ ] Obtain and review the pre-contract disclosure statement
[ ] Check the body corporate levy amount and what it covers
[ ] Review the long-term maintenance plan and fund balance
[ ] Ask about any past or planned special levies
[ ] Review body corporate insurance — coverage, excess, premium trends
[ ] Check for weathertightness claims or issues
[ ] Order a LIM report for the unit and parent property
[ ] Commission a building inspection covering common areas
[ ] Read the last 2–3 years of body corporate meeting minutes
[ ] Review the body corporate rules (pets, renovations, Airbnb, parking)
[ ] Check the building's earthquake-prone status and NBS rating
[ ] Confirm all building work has proper consents and code compliance
[ ] Verify your financing — some banks are cautious about certain apartment types
[ ] Get legal advice from a lawyer experienced in unit title transactions

How Shire Can Help

Apartment due diligence involves reviewing a stack of documents — LIM reports, disclosure statements, body corporate minutes, insurance summaries, building reports, and more. It's a lot to process, and critical details can hide in dense paperwork.

Shire lets you upload all your property documents and ask questions across them in one place. Whether you want to understand what a specific clause in the body corporate rules means, or check if the long-term maintenance fund is adequate, you can get AI-powered analysis to help you make sense of it all.

It's not a substitute for professional legal advice — but it can help you know which questions to ask.

The Bottom Line

Buying an apartment in New Zealand can be a smart move — but only if you go in with your eyes open. The body corporate structure adds layers of complexity that standalone house purchases simply don't have. Rising insurance costs, deferred maintenance, and governance issues can turn a dream apartment into a financial headache.

Take the time to do thorough due diligence. Read the disclosure statements. Scrutinise the finances. Understand the insurance. And always work with a lawyer who knows unit title law.

The market may be giving buyers more time to make considered decisions in 2026 — as RNZ recently reported. Use that time wisely.

This article is for general information only and does not constitute legal, financial, or professional advice. Always consult qualified professionals before making property decisions.