Helen McEntee (Meath East, Fine Gael)
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The Multi-Unit Developments Act 2011 (MUDs Act), reformed the law relating to the ownership and management of common areas of multi-unit developments, and aims to facilitate the fair, efficient and effective management of Owner Management Companies (OMCs).

The MUDs Act includes provisions relating to:

• the setting of the annual service charge payable by apartment owners in a MUD;
• the establishment of a sinking fund, to fund any non-recurring expenditure; and
• the development of house rules for the operation and maintenance of their multi-unit development.

Under Section 18 of the MUDs Act, the OMC must establish and maintain a scheme for annual service charges to fund ‘ongoing expenditure reasonably incurred’ on the maintenance, insurance and repair of common areas within its control and for the provision of common services (security, legal, accounting etc.) to unit owners. The owner of each unit in a multi-unit development is obliged to pay all service charges so levied. However any such charge must first be approved by a general meeting of the members of the OMC.

The proposed annual service charge amount can be amended by a vote of 60 per cent of those present and voting at the meeting. Where the estimated service charge for the coming year is disapproved by at least 75% of those present and voting, the proposed service charge will not be levied, and the previous year’s charge will continue to apply until a new service charge for the coming year is approved. Furthermore, subsection (13) of section 18 of the MUDs Act provides that the annual service charge must be calculated on a transparent and fair basis.

Under section 19 of the MUDs Act, the OMC must establish a sinking fund for the purpose of ‘discharging expenditure reasonably incurred’ on refurbishment, improvement, or maintenance of a non-recurring nature, of the multi-unit development. Each member of the OMC is obliged to pay a contribution amount of €200 per annum to the sinking fund, or such other amount as may be agreed by the members of the OMC.

In addition, it should be noted that Section 23 of the MUDs Act provides that an OMC may make House Rules for the effective operation and maintenance of the multi-unit development. These Rules must be consistent with covenants under the title documentation for the development and be made with the objective of advancing the quiet enjoyment of the property by unit owners and ensuring that the rights and obligations of unit owners and occupiers are balanced in a fair and equitable manner. In that regard, the Rules could concern matters such as arrangements for payment of charges and management of parking spaces. However, the rules must first be agreed by a meeting of members of the OMC.

Finally, the MUDs Act acknowledges the risk of disputes arising in the enforcement of rights and the performance of obligations imposed by its provisions and makes provision for the resolution of such disputes. For example, section 24 provides that a person, including any member of an OMC, may apply to the Circuit Court for an Order to enforce any rights conferred or obligations imposed by the Act. Section 24(2) allows the Court to take into account whether the parties have tried to resolve their differences by mediation or other alternative dispute resolution. While section 27 provides for court-directed mediation if the court considers that a ‘mediation conference’ between the parties would assist in reaching a settlement of the matter.