Ruth Coppinger (Dublin West, Solidarity) | Oireachtas source

I thank the witnesses for their presentation. I live in a multi-unit development and it is great that we are having this discussion. We need more of it as this is a serious problem. I suggest to the Chairman and members that we need to bring in house owners also as there are two parts to this jigsaw. There are house owners who would be delighted to be allowed to testify here about their problems. That is not in any way to divide the two; I make the point that they are interlinked.

What happened here is that around 15 years ago, these units were built during a boom. There was no sufficient forethought on the part of local authorities, planners or the political establishment. In some cases, house owners were lumped into management companies which has led to a resentment among them. That is part of the reason there are huge arrears in management companies overall. House owners are withholding on principle because they feel it was an injustice they were foisted with these in the first place. In 2006, when Bertie Ahern was Taoiseach, this was raised in the Dáil by the then-Deputy Joe Higgins, my colleague. A circular was issued to local authorities to say that houses could not be put in thereafter where they had a front entrance and a back garden. However, there is a legacy issue in Fingal and Dublin west where the Taoiseach and I share a constituency. It is the capital of multi-unit developments where problems with management companies are rampant.

The witnesses raised the issues of insolvency and uncollected fees standing at 70%. There are a number of reasons for that. I agree on building defects. We have pyrite in my own estate which is another reason people feel they will not pay. As well as the management company issue, we have the pyrite issue also. I refer to company law. The witnesses referred to a lot of issues, including inadequate accounts and a failure to log accounts. I have examples of invoices which have been sent to people which are not added up properly. These are errors involving thousands of euro. I have an invoice I can pass around the committee later where €3,000 and €3,000 has been added up as €10,000. When the person tried to challenge it, the matter got nowhere. This is in Tyrrelstown where the residents do not mind me raising this. In fact, they want it raised and have gone public about the problems there over the years. In another case, the interest levied has multiplied. It is an incentive to push people to pay but it adds to the desperation. We all know that, in particular in the recession, many people could not afford this luxury anymore.

There are two issues here, namely apartment owners and house owners. I contend that it is in the interest of apartment owners for houses to be released from management companies. It has been a democratic decision in our estate of 700 homes by both apartment and house owners. It is necessary to get agreement at an extraordinary general meeting. The local authority co-operated with this process. Unfortunately, while we found a legal mechanism to release the house owners, we have not been able to implement it due to absentee landlords. One of the reasons for arrears is that there are many absentee apartment owners who have rented out their apartments and are nowhere to be found. They do not care about the maintenance of the estate and could not give a toss that the grass is not being cut or that walls are not being painted. One of the issues with the MUD Act is that where people democratically get together and decide to release the houses, we need to have in place a way to let them do it cleanly and legally. Management companies are meant to be small. There are not meant to be hundreds of people in them. That is the way on the Continent.

Another problem with management companies is that 20% to 25% of the fees charged are to cover administration. Of itself, the existence of the management company means there are high charges. The other problem is legal fees. If a resident challenges an invoice or service charge which it is felt is wrong because services have not been delivered, the cost is lumped back on the residents through the management company even if that person wins. The residents are called shareholders but they are just homeowners.

The other issue is that insurance fees are massive. People are often being charged huge rates of insurance for a car parking space. This is certainly the case in Tyrrelstown.

I turn to aspects of taking in charge. In the case of Tyrrelstown, where eight management companies run 2,000 units, it has been identified through a letter from the council that the council has no formal written compliance documents relating to the areas of Tyrrelstown that the residents have asked about. This is a breach of condition No. 16 of the planning permission. This would bring into question the whole legal existence of the management company, if they have not been properly conveyed. Both directors of the management company and council officials have participated in transferring these areas but there are no clear maps or conveyance documents to back it up. The way that this has happened is unacceptable. When apartment owners and homeowners challenge these unfair charges in court there is a block because once they have entered a contract, they have legally signed and there is nothing a judge can do. Some judges might be sympathetic to the plight of the owner of the apartment or house but they have to agree with the management company in this regard.

It is a serious problem and it is also a political problem. A person has no legal way to sort it out. Laws must be brought in at State level by the Dáil that will assist homeowners and apartment owners to sort out these issues. I agree with the suggestion of an ombudsperson or regulator. This, at least, would be somewhere for people to go to sort out the issues. We also need much clearer legislation to allow people to get released from the contracts. This would assist apartment owners.

In the case of the estate I live in - Castlecurragh - the apartments have not been painted for 15 years. One of the reasons given is that huge amounts have been spent fixing the roofs after storms and severe weather events are happening all the time now. This should have been addressed at the planning stages and checked at building control stages, but it was not. Now the apartment owners are lumped with the charges. It is sucking all of the money from their management fees, which prevents them from having a sinking fund.

Much more discussion is needed on this. I have raised the matter in the Dáil, but the problem is that because it concerns management companies, it is deemed a business issue and it gets passed over. It is, however, a housing and planning matter. We need to agree to have more discussion around this and about what is needed to resolve it. The representatives have introduced the topic very well.