Law changes may affect some residents’ associations
How the law changes may affect residents’ associations that are incorporated societies.
From 6 April 2026 there is one Act that incorporated societies need to comply with in New Zealand; the Incorporated Societies Act 2022 (2022 Act).
Between 5 October 2023 and 5 April 2026 incorporated societies could reregister and change from the Incorporated Societies Act 1908 (1908 Act), to the 2022 Act. That transition period has now ended.
Up to 5 April 2026 residents’ associations that are incorporated societies could notify the Registrar of Incorporated Societies if they wished to utilise a transitional provision relating to dealing with surplus assets under the Incorporated Societies Act 2022 (2022 Act).
What happens with surplus assets under the 2022 Act
Residents’ associations are set up to manage, and sometimes own, the ‘common property’ at a residential development on behalf of the residents. ‘Common property’ in this context means things like land (such as roadways and gardens), buildings and infrastructure. It is property that the residents’ association will have separate legal title to.
To reregister, societies needed to provide a constitution that complies with the 2022 Act. That constitution must have included a clause that describes how surplus assets will be distributed when the society is wound up.
1908 Act societies could distribute surplus assets to members
Under the 1908 Act, your society was allowed to have a clause in your constitution permitting the distribution of surplus assets to your members. If your residents’ association owns common property, this means that the common property could be distributed to the residents if the association was wound up.
2022 Act does not allow surplus assets to be distributed to members
The 2022 Act does not permit the distribution of surplus assets to members when a society winds up. Instead, the society must nominate a not-for-profit entity for those assets to go to.
Transitional regulations give associations time to comply
The 2022 Act surplus assets requirement presented challenges to existing residents’ associations that own common property. On 15 January 2026 the Government introduced transitional regulations to give residents' associations more time to decide the best course of action.
Some associations may still distribute surplus assets to members
If your association owns common property, these regulations allow you to keep a clause in your association's constitution allowing you to distribute surplus assets to your members (if your association is wound up).
Which associations could use the transitional regulations
The transitional regulations only applied to associations that:
- reregistered under the 2022 Act between 15 January 2026 and 5 April 2026, and
- notified the Registrar that they intended to exercise this transitional provision.
This transitional regulation can only be used up to 5 October 2028
By 5 October 2028, your association will need to either:
- comply with the surplus assets provisions in the 2022 Act (by revising your constitution to nominate a not-for-profit entity), or
- convert to an alternative ownership structure.
Published 15 January 2026, updated 6 April 2026