New Zealand Legislation: Regulations

7 Further conditions that apply if there is controlling entity

• (1) This clause applies if there is, or will be, a controlling entity.

  (2) The exemptions in clause 5 are subject to the further conditions that—

  • (a) subscribers for specified securities have, before subscription, received from the developer a statement that—

    • (i) describes the rights, powers, and duties of the developer and the controlling entity in relation to the specified entity and the communal facilities; and

    • (ii) specifies where and how potential investors and members or shareholders of the specified entity may obtain further information concerning those rights, powers, and duties; and

    • (iii) states that potential investors should seek professional advice before purchasing a developed property; and

  • (b) it is a term of the offer that the rules provide that an independent mediator must be appointed to act in a dispute between any member or shareholder of the specified entity and the developer or controlling entity concerning the developer's or controlling entity's compliance with the rules when exercising its rights and powers, or performing its duties, as the controlling entity or in its capacity as the developer, if at least 25% of all members or shareholders of the specified entity (excluding the developer and the controlling entity) vote to appoint a mediator; and

  • (c) it is a term of the offer that the rules provide that, until the completion of the development, an updated statement of the matters set out in clause 6(c) and (d) is provided each year to the members or shareholders of the specified entity with the financial statements that are distributed under clause 6(p)(vii); and

  • (d) it is a term of the offer that the rules provide that the provisions in the rules conferring rights and powers on the controlling entity in its capacity as controlling entity will expire or terminate no later than the completion of the development.