The study of management agreements in multi-unit housing developments is a subject of international cross-jurisdictional study. This paper builds on existing work ( Gibbons, 2013a ) applying the model of Blandy et al. (2006) to body corporate management agreements in New Zealand. This paper begins by setting out the model of Blandy et al. (2006) , and how this has been applied to New South Wales ( Sherry, 2010 ) and New Zealand ( Gibbons, 2013a ). It then sets out key terminology relating to New Zealand's Unit Titles Act 2010, including section 140, which regulates service contracts (including management agreements) and the recent application of this provision in the Sentinel Management decision ( Body Corporate 396711 v. Sentinel Management Ltd [2012] ). Applying the model of Blandy et al. (2006) , it argues that while s 140 provides a strong remedy for unit owners against inappropriate management agreements, the limited application of the provision does not go far enough in regulating management agreements. This suggests that policymakers should pay greater attention to the scope of legislative reform, to ensure that reform has appropriate reach; and to the existence of non-statutory remedies. The paper concludes with recommendations for policymakers in other jurisdictions.
1 The Blandy, Dupuis, and Dixon model and its applications
The study of multi-unit housing developments can be approached in a range of ways: Blandy et al. (2006) have set forth a model that approaches the problems of multi-unit housing from three perspectives. First, property ownership is considered a bundle of rights, and as a bundle, can take a range of forms. Second, it considers law as an instrument of power, with attention to both discourse and silence ( Foucault, 1980 ). Third, it examines critical legal events, such as the subdivision of the relevant land by the developer, the developer entering into contracts for the sale of units, and the appointment of a manager.
This model has been used to argue that clarifying the rights and responsibilities of owners, managers, and others is an important task of legislation regulating multi-unit housing ( Blandy et al., 2006 ); these authors have later drawn on these critical legal events – and the power exercised and constituted by and within them – to argue that the regulation of property managers is a priority in many jurisdictions ( Blandy et al., 2010 ). Sherry (2010) has drawn on this work to explain issues concerning management rights in New South Wales. Drawing particularly on the New South Wales decision in Arrow's Case (2007), she has argued that because of the timing of critical legal events, such as the fact that the appointment of a manager by a body corporate often occurs while the developer owns all the units, long-term management contracts constitute a form of “developer abuse”. She has also argued that the problems of power imbalance and developer abuse in management agreements have “played out […] across the globe and across time” ( Sherry, 2010, p. 159 ).
Building on these perspectives, Gibbons (2013a) has identified five phenomena relating to management rights through an analysis of recent New Zealand cases. First, a “third contract”, under which management rights are sold from Managers A to B, beyond the second contract described by Sherry (2010) , under which management rights are sold by a developer to Manager A. Second, a paradox of disempowerment, under which a body corporate must demonstrate that the terms of a contract are ultra vires or beyond its powers to have those terms struck down: the power of owners comes through their own disempowerment. Third, that management rights may be subdivided into different types of contracts, covering letting rights, secretarial services, and other matters. Fourth, how a bright line between unit property and common property creates difficulties for the inherent interdependence of unit owners. And fifth, how form triumphs over substance: arrangements documented in one way will be unenforceable, while similar arrangements documented in a different way will be upheld (reference). This analysis pointed to the limitations of sections 139 and 140 of the Unit Titles Act 2010 (“UTA 2010”), new legislative provisions expressly regulating management.
This paper in turn adds to the work of Gibbons (2013a) and Sherry (2010) , applying the model of Blandy et al. (2006) to the recent New Zealand decision in Sentinel Management (2012). Through doing so, it highlights the limitations of sections 139 and 140 of the UTA 2010, and proposes how these limitations could be avoided through appropriate legislative drafting. It therefore provides guidance for other jurisdictions regulating property managers and management rights.
2 Terminology and a diseconomy of concepts
Lawyers and legal scholars inevitably seek for precise terms to ensure that concepts are clear ( Hohfeld, 1913 ). While Smith (2012) has recently argued that property enjoys an “economy of concepts”, a range of examples suggest otherwise. Clarke (2002, p. 12) has observed that in an English context, “[c]ommonhold is a distinct name, but the concept is derivative”. Drawing on other works, such as Everton-Moore et al. (2006) and Sandberg (2003) , it could be argued that the law of multi-unit developments suffers from a “diseconomy of concepts”: as different jurisdictions have different terms for similar legal forms, the absence of common terms makes the application of common principles a difficult exercise.
Bourdieu's (1987, p. 817) work on the juridical field has emphasised the importance of specific words and terms – legal language – in establishing and determining varying power relationships and constituting lawyers and judges as arbiters of power:
Within the [juridical] field there occurs a confrontation among actors possessing a technical competence which is inevitably social and which consists essentially in the socially recognized capacity to interpret a corpus of texts sanctifying a correct or legitimized vision of the social world.
Following Foucault (1980) , power need not be seen as something exercised by one party over another in an oppositional or bipolar way; rather, the exercise of power is ubiquitous and multifarious. However, within the juridical field, technical language constitutes judges and lawyers as those with the recognised capacity and skill to interpret technical language. The difficulties of the diseconomy of concepts in the law of multi-owned units amplifies the role and importance of lawyers: the same terms that a lawyer will seek to define with Hohfeldian precision can cause murkiness for non-lawyers engaging with the legal system ( Blandy et al., 2006 ).
Sections 139-140 of the UTA 2010 illustrate this: they are replete with complex terms, referring to other parts of the legislation. Section 140, for example, reads as follows:
140 compensation for, or termination of, service contracts:(1) This section applies to a service contract: (a) to which the body corporate of a unit title development is a party; and
(b) that was entered into before the date that the control period ended in relation to the unit title development concerned.
(2) The appropriate decision-maker may, on the application of the body corporate, require a person, or, as the case may be, persons, described in subsection (3) to pay compensation to the body corporate if it appears to the appropriate decision-maker that the body corporate has suffered loss or damage because that person has, or, as the case may be, those persons have, failed to comply with section 139.
(3) The persons referred to in subsection (2) are: (a) the original owner:
(b) an associate of the original owner who was a member of the body corporate during the control period.
(4) An application under subsection (2) must be made within three years after that date that the control period ended.
(5) The appropriate decision-maker may, on an application made by the body corporate, make an order terminating the service contract if it appears to the appropriate decision-maker that the contract is harsh or unconscionable.
Within this passage there are a significant number of terms that have specific meanings defined elsewhere in the legislation, including “service contract”, “appropriate decision-maker”, “original owner”, “associate of the original owner”, and “control period”. These serve to make the provision a difficult one to read and interpret, and enhance the role and power of lawyers within the juridical field ( Bourdieu, 1987 ). Similar terminology, or jargon, is an innate part of unit ownership in New Zealand and many other jurisdictions, even though the terms used may differ, as noted above. Under the UTA 2010, an owner of a unit title property is also a member of the “body corporate”. The body corporate comprises all owners, but has a legal personality separate from them. The body corporate has certain duties, such as keeping the development insured (in most circumstances), and maintaining the exterior. Owners pay levies to fund the body corporate's operations. The body corporate must have an “operating account”, must prepare a “long-term maintenance plan”, and must do various other things prescribed by legislation. Where it steps outside certain legislative limits, its actions may be ultra vires (beyond its powers), and unable to be enforced (...
