Mr. Bryan Maher:

On the non-payment of fees, if arrears build up, we need to take cases to court. In many cases, especially where a case is defended, the actual cost of taking it to court outweighs the money that might be recovered. What we believe is required is an arbitrary body that would arbitrate on both sides of the case and come to a ruling, rather than there being a requirement for us to go to court on each occasion. For it to be worth their while to go to court, many management companies will allow the service charge to build up over five or six years. Only at that point, when there is a risk that the action will become statute-barred, it is worthwhile risking the cost of going to court. By that point, when nothing has been done for five or six years, the cashflow of the management company has really been put at risk. It is badly needed for services by the owners' management company. It also has a detrimental effect on the relationship between the directors of the management company and the owners who are paying. They can see that some owners are not paying and the unfairness of it in walls not being painted, lifts being unserviced, etc. We need a far speedier resolution process to address the matter.

We are also seeking some reform of the tax system. When landlords receive an invoice for a service charge, they can use it to offset it against their tax bill, regardless of whether they pay the charge. Some reform is required in that regard. There should be some evidence of payment before invoices can be offset against their tax bill. Unfortunately, we see a major problem in the balance between owner-occupiers and landlords. Landlords are almost gaming the system in the non-payment of fees.

The committee asked what experience we had with local authorities partnering owners' management companies. I have to say we have very little. There is a need for a far more transparent process between the interested parties, including the developer, the owners' management company, community representatives and the local authority. A transparent process needs to be put in place, one in which we can see it working. I can give the committee my estate as an example. It is 15 years old. There are several undeveloped plots. As they are in temporary use as school accommodation, it is quite likely that the overall plan will not actually take shape for another 15 or 210 years. The local authority has advised that if that is the case, it is unwilling to take over responsibility for the common areas or roads in the estate until the full plan has been completed. That leaves us in limbo, in a situation where we will have to go to a private developer to ask it to repaint lines, sort out road safety issues, etc. Again, there is a need for a transparent process to allow all parties to have their say. At least then we would see at what stage the handover was at.

On building defects, we agree that there must be an industry levy. Another possibility might be a requirement for defect insurance. That would allow the insurers to come on board to regulate how buildings were built and governed. We have very serious cases and receive emails from a number of directors on an almost weekly basis about the building defects issue. The vast majority involve instances where the developer has gone bust and there is no recourse to anybody. People do not know where to turn and are facing huge bills. It is a very serious issue. We agree that it is at the top of the list in terms of its seriousness, given the possibility of the evacuation of buildings because of fire regulations.

On how many developments have sufficient sinking funds, I think Mr. Rouse has some statistics from recent academic studies.