Mr. David Rouse:

The Act does not contain measures to make it easy and cheap for the collective community to recover service charge debt from so-called “free-riders”, in other words owners who can but will not pay their service charges. Breaches of the Act are not being policed by anyone, and remedies under the Act require expensive Circuit Court actions, which are not viable or practical for home owners in developments. In the case of disputes within the OMC, for example where directors act improperly in relation to the company’s affairs, company law remedies are too onerous and too expensive for most OMC members to access, and the Multi-Unit Developments Act 2011 does not contain provisions to regulate the effective stewardship of OMCs by volunteer directors.

Having identified some of the problems, we feel we have a responsibility to come up with solutions. There should be a regulator of OMCs. The Condominium Authority of Ontario is a very good example for such a regime. Our dialogue with the Property Services Regulator indicates that many of the complaints to her office from apartment owners, ostensibly about property management agents, in fact arise from the conduct of owners’ management company, OMC, directors.

The OMC directors have unique responsibilities for common areas of apartment developments, affecting so many homes in the country, in our view there is a public interest in having a national register of owners’ management companies. Registration with the Companies Registration Office alone is not enough to allow for robust regulation of the sector, and we have suggestions for reform in this area. We would like to see ministerial regulations under the Multi-Unit Developments Act 2011, or amendment of the Act, to ensure sinking fund provision is professionally determined, and that it is adequate to cover future building maintenance. We submit that changes to the law are needed to allow efficient and timely recovery of service charge debts. This is because the current courts route is both disproportionate and cost prohibitive to management companies. We propose that training and support for volunteer directors is a missing component of the current regime.

The Multi-Unit Developments Act 2011 was initiated through the work of the Law Reform Commission, and many of the Act’s provisions refer to matters of property title, the Act falls under the remit of the Department of Justice and Equality. In our opinion the growth of the apartment sector as a form of housing, and the policy changes required, point towards transferring responsibility for the Act from the Department of Justice and Equality to the Department of Housing, Planning and Local Government.

Many of these matters were considered in the Law Reform Commission consultation and report of 2008 that preceded the Multi-Unit Developments Act 2011, however they did not make their way into the final legislation. Other reforms we have already put forward through various public consultations include law reform to permit formal representation of long-term tenants in OMC affairs. We also suggest reforms that would encourage landlords and Approved Housing Bodies with multiple properties in an estate to appoint directors to the board - it should not be left to a few civic-minded owner occupiers to run the affairs of the entire estate. In our opinion there needs to be a review of the taking in charge process for parts of multi-unit estates transferred from developers to local authorities. The process needs to be faster, and OMCs need to be involved and informed about their rights and responsibilities.

We are aware of this committee’s work and report last year on short-term lettings. Apartment owners and owners’ management companies need to be aware of the obligations and risks under leases, house rules, insurance policies, and planning law that arise from short-term lettings in their blocks. Finance providers need to develop structures and products for owners’ management companies - to allow them to borrow for capital purposes, which already happens in Australia. We also need provision to allow OMCs to earn a return on sinking fund deposits.

We would like to see changes to tax law to put apartment developments on the same footing as traditional housing, for example to allow apartment owners to get the benefit of the home renovation incentive scheme for the cost of works to apartment common areas.

Most of the policies we propose are already common practice in the mature apartment sectors of countries such as Canada, New Zealand, and Australia, as we have already mentioned. We suggest that Ireland has an opportunity to select the best of these policies and approaches, and to adapt them to suit our own needs. We have made progress in raising some of these issues with the Department of Housing, Planning and Local Government and with the Housing Agency. Our efforts have borne fruit most recently in the updated apartment planning guidelines. A planning application for an apartment development must now include a building lifecycle report. In addition, planning authorities are advised to attach conditions requiring the establishment of an appropriate sinking fund, and requiring compliance with the provisions of the Multi-Unit Developments Act 2011, such as they are.

As members may know, the Housing Agency has commissioned studies of the apartment sector. One study with Clúid Housing is to assess the qualitative aspects of apartment and multi-unit development living. The other is quantifying the exact number of OMCs in the country, and assessing the financial health of a representative sample of companies. We wish to acknowledge the value of the Housing Agency’s engagement with us to date. We respectfully submit that the committee might wish to consider holding wider hearings on the regulation and governance of the apartment and multi-unit development sector, to receive input from other stakeholders such as the Society of Chartered Surveyors Ireland, the legal profession, and construction industry bodies.

We very much look forward to hearing members' comments, and to answering their questions this morning.

Go raibh maith agaibh.