Fergus O'Dowd (Louth, Fine Gael)

I remind the Deputy that Fine Gael is about to produce a Bill on this matter. It has been preparing the legislation for some time.

There have been great changes in Irish society in recent years. New building methods have been introduced and people have started to live in alternative types of buildings. It is clear that apartment blocks are a significant feature of modern life, particularly in urban areas. I have concerns about the quality of construction of some new buildings, for example in my constituency. Some new buildings are excellent, but some of them are not. I am concerned that some of the supposedly fine and shiny apartments will become the slums of the future. I do not have a problem with high-density development, as long as the quality of construction is high and environmental considerations are taken into account. The problems in this area need to be addressed.

Demographic changes are putting pressure on the existing housing stock. High-density apartment blocks, which offer cheaper housing that should be of a high quality, allow many young people to get on the property ladder. The 2002 census showed that over 110,000 households, or almost 9% of the total, are based in apartments. The 210,000 people who live in this type of housing are often single people and couples without children. There is evidence to suggest that this trend is continuing. Over 42,500 flats and apartments were completed between 2002 and 2004. Such forms of housing comprised one fifth of all housing completions in that period. Anecdotal evidence suggests that many residents feel powerless to address the serious problems with apartment complexes throughout the country.

Such problems relate primarily to the failure of builders and managing agents to maintain common areas, even though they charge high management fees. They often make little or no provision for the sinking fund that is necessary to cover the high costs which occur every few years when major refurbishment is needed. Non-payment of management fees is not an option because it would lead to a debt being placed on the property. Such a debt would have to be cleared before the property can be sold. There is no State agency to which residents can complain. Given that there is an increasing number of non-residential investors in the apartment sector, it can be difficult to spur the residents into action.

Urban Deputies and public representatives have no shortage of horror stories about apartment blocks. It is becoming common to encounter gardens which are not landscaped, walls which are not painted, broken lifts, crumbling brickwork, sporadic refuse collection and broken fixtures and fittings. Such problems are becoming the order of the day in a significant minority of apartment complexes. The Government has failed to act in this regard, despite many promises that it would. The programme for Government in 2002 stated that the Government would "consider the introduction of legislation to regulate the establishment and operation of apartment complex management companies". In May 2003, the then Minister for the Environment, Heritage and Local Government responded to a Dáil question by stating that the regulation of apartment complex management companies was "still under consideration" and that he had "no immediate plans to set guidelines on fees". In December 2004, the current Minister responded to a question by saying that "a Law Reform Commission working group is examining the law" in this regard. He hoped that the working group would respond "early next year".

Fine Gael, which has been working on this issue for some time, intends to publish in the next few days a Private Members' Bill to legislate for apartment complex management companies. Such legislation is necessary because no State regulation is in place, even though the Government made a commitment to put such a regulation in place. The Fine Gael Bill will seek to amend the Residential Tenancies Act 2004 by widening the role of the Private Residential Tenancies Board. We propose to make the board the regulator in this area, for example by imposing a pro-consumer code of practice on managing agents. The code of practice would protect residents in a number of ways. Developers would be obliged to set the same management fee for the first three years of a new complex at a level which ensures that managing agents can meet the established minimum standards for that period. Such a measure will ensure there is no sudden rise in management fees one or two years after an apartment is purchased.

Fine Gael proposes that provision should be made for an adequate sinking fund from the outset. Many management agents set the annual fee without making provision for the large-scale refurbishments which need to be carried out every few years. This leaves residents with a shortfall and a choice of paying several thousand euro at once or living within a decaying physical environment. Neither scenario is tolerable.

Other areas in the apartment sector need urgent attention. A management fee should not be fully payable until managing agents are in place and the various services can be provided. Many builders demand payment of the first year's management fee before the keys are handed to the new owners, even though the owners may be moving into what is essentially a building site and few of the services for which the fee is paid, such as cleaning, are provided. Owners should be allowed to withhold a portion of the fee until all services are available. Given the complex legal nature of management company arrangements, it is vital that consumers get the necessary protection they deserve. They can rest more easily if the Private Residential Tenancies Board acts as their champion. More needs to be done, however.

Fine Gael has received reports that residents who try to change managing agents have been put at a disadvantage because new agents insist that binding contracts are signed without any probationary period during which the level of service can be assessed. Residents should have the right to insist on a one-year probationary period before deciding to commit to a managing agent for a longer period. Managing agents who adhere strictly to the proposed code of practice will be awarded a special "kite mark" that will alert residents to the managing companies which truly act in their interests.

Given that more people are living in apartments, it is vital that the social welfare code is updated to ensure it provides necessary protection to the most vulnerable people. Two key changes are needed. The rent supplement scheme should be widened to include vouched fees which its recipients must pay for the upkeep of communal areas, including management fees. A mechanism should be put in place to ensure that those living in flats and apartments are not at a disadvantage when refuse charges are waived in respect of those living in a house in their local authority area. It is vital that action is taken on this agenda immediately.

People who live in gated apartments and developments face a special problem when they want their communal areas to be taken over. While the gates are in place to prevent public access, such people are responsible for the maintenance and upkeep of everything inside the gates, such as the lights, the footpaths and the road. If such people are not aware of that responsibility, they may be placed at a significant disadvantage at a later stage.

See this speech in context