New Law to Govern Property Management Companies
The Government has introduced legislation in Dail Eireann which will be of particular interest to apartment owners and to people with homes in ‘mixed developments.’ The new legislation, the Multi-Unit Development Bill 2009, will regulate new and existing management companies.
The legislation, implements recommendations made by the Law Reform Commission on the regulation and management of apartment blocks and other multi-unit developments in June 2008
The legislation provides a legal framework that will govern the establishment and operation of management companies. It also provides for the transfer of ownership of common areas within apartment block or other multi-unit developments.
The Bill introduces statutory regulation in this area for the first time. It addresses issues relating to the obligations of developers, the operation of management companies and protects the owners of new and existing units in apartment blocks and other forms of multi-unit developments.
Critically the Bill provides for the transfer of common areas to owner management companies prior to the sale of any units in an apartment block. This will overcome the difficulty faced by many buyers of apartments where developers continued to effectively hold control of common areas, a feature that some developers sought to exploit through the operation of management companies which they continued to control.
The Bill also makes provision for voting rights and sets out regulations for the establishment and maintenance of schemes for service charges. It makes mandatory the provision of sinking funds necessary for the long term care and maintenance of apartment blocks. The legislation also sets out mediation and a court based resolution system for resolving disputes.
The legislation together with the recently published Property Services (Regulation) Bill 2009, will, when in operation bring a very important new form of regulation into Irish property management. It will transform the regulatory environment for management companies, impose new obligations on developers and give new powers to apartment owners.
The National Consumer Agency has welcomed the publication of the bill as representing a “good day for consumers”. The agency has specifically welcomed the obligations to transfer common areas to owner management companies and the extinguishment of the beneficial interests of the developer on completion of a development. It welcomed the transparency in relation to service charges and the statutory requirements to create a sinking fund.
The Apartment Owners Network which supports campaigns for Irish apartment owners has also welcomed the publication of the bill.
