Olivia Mitchell (Dublin South, Fine Gael)

I support the motion tabled by my colleagues. I will confine myself to one problem which is relevant to my constituency and which I imagine is also increasingly relevant in other urban constituencies, namely, the ownership and management of property by companies, whether for gated communities, apartments, small housing developments or duplexes. This is an area of uncharted waters in Ireland. Problems are emerging already from the number of contacts I have had on this issue in my constituency. It is a matter that should be dealt with now before it reaches crisis proportions.

It is mainly about ensuring that management charges are paid and kept for the purpose for which they were intended. A major change has occurred in the scale of apartment ownership. It is not an entirely new phenomenon. We have had apartments in the past, but they were owned primarily by landlords who had an income against which to offset management charges. The situation is now quite different in that a much broader spectrum of the population, including many first-time buyers and young families, are moving into these apartment blocks. There is a need for standardisation of leases so they can know what they are getting into. Something similar to the residential tenancy board contracts that are produced for landlords and tenants should be available for apartment block owners. They should have some idea not alone of their own but of their joint responsibilities. That is where the concept falls down and there is an enormous information deficit.

Maintenance charges now resemble the old rates bills and are regarded with the same dread, taking a large chunk of a homeowner's money. The lack of understanding of what they are for only adds to the tension associated with them. Maintenance charges for starter apartments can be as high as €2,000 a year, placing enormous pressures on young home owners. House buyers are being duped by elaborate designs, such as fountains and wooden cladding, that look lovely and sell the apartments quickly but are high maintenance features. It is never properly explained to the owners that they are responsible for maintaining them. A property's value can rapidly fall as the owners cannot meet the maintenance costs associated with these features.

When owners cannot pay the maintenance charges, the exterior of the building falls into disrepair, making them unpleasant places in which to live and difficult to sell. However, there are other pitfalls such as those associated with insurance responsibilities held for common areas. Many owners do not realise that if their building is not properly insured, the mortgage holders can foreclose on the mortgage. If uninsured premises go on fire, those who withheld their management charges are responsible not only for their own building but the apartments of others and can be sued by other owners. There is also the added problem of public liability. Those who cannot meet their management costs increase the burden on others. The sinking fund, a precautionary fund primarily for dealing with major structural repairs, is dipped into as the burden becomes too great. If that is frittered away on day-to-day maintenance there will be endless problems for those affected apartment blocks in the future.

Problems associated with property management companies are beginning to arise. Many disputes are due to misunderstandings as to what property management companies are about. They are working on behalf of those who own the apartments. Matters can be simplified for apartment owners. I accept the potential exists for homeowners to be the managers of their buildings. However, the exigencies of company law make this difficult for small complexes and can put unnecessary responsibilities on them.

New legislation is required to ensure the sinking funds for long-term structural repairs are protected. The Minister for the Environment, Heritage and Local Government must promote standard leases and give the maximum protection and certainty to buyers. Almost all homes being built in south Dublin are apartments; 1,600 received planning permission last year alone. Nationwide, apartments make up one fifth of all house units built. Apartment blocks can provide a pleasant living environment with a good social mix, but only if the standard of the property is maintained. This can only be ensured if there is regulatory and legislative change and before crises emerge.

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