Mary Upton (Dublin South Central, Labour)

I thank my colleague, Deputy Gilmore, for raising this issue in Private Members' time. A number of aspects in the motion are of particular concern in my constituency and I want to address a couple of them specifically. They relate to the management of multi-unit dwellings or apartment blocks. This category of development differs from those mainly made up of houses in that it would not usually be envisaged that a local authority would take in charge the common areas of an apartment block or the private or public open space which surrounds it.

Nevertheless, the motion calls for the introduction of new legislation to give consumer protection to home-buyers, including the regulation of management charges. The motion also calls for new legislation to regulate the operation of management companies. Accordingly, I want to address these two specific issues which are of particular interest in my constituency where there is a large number of apartment blocks. Hardly a week goes by without one of my constituents, either a short-term tenant or a long-term leaseholder-owner of an apartment, contacting me about problems they must endure regarding the upkeep of the common part of their building. Again, rarely a week goes by without a constituent contacting me about the increasing cost and diminishing return in paying a management agent to manage the common parts of buildings containing apartments and the land which surrounds them.

For example, some of my constituents contacted me the other week to complain that the management agent of their block is seeking a 50% increase in the management fee that they demanded last year. My constituents are reluctant to pay this fee hike because the management company and the management agent have not maintained the building as they should. In the past year, plants have been left to die, the grass areas are completely overgrown, they have become infested with weeds, no window cleaning has been done and the bin housing has not been cleaned adequately, the consequence of which is that vermin is proliferating all over the place. They promised a 24-hour a day management service, which is a complete myth. This only came to light when the fire alarm went off twice so far this year, in the middle of the night and no one responded to the calls to turn it off. The gutters are blocked, the water overflows on to the residents' balconies, which is the source of the stagnant water and the awful smell in the lift. It took the management company a year to unveil the problem but it still has not been addressed.

Recently I was in touch with another group of residents of an apartment block in my constituency who are suffering from a similar array of problems. The residents of these two developments have managed to use existing legislation to confront most of the difficulties they faced, and they managed to solve them. The question is what is wrong with the system if the problems can be solved using existing legislation. What is wrong is the expense and complexity of the solutions to these problems, which the residents of these two apartment blocks had been compelled to seek.

I will describe the lengths to which they had to go. First, they had to get a lot of expensive legal advice. Thereafter, the residents, having used existing company law to have the current directors removed from the management company, compelled the management company to provide access to the accounts. In one of the cases that was brought to my attention the management company in question had not even bothered to draft accounts. In this instance, the residents were compelled to contact the Office of the Director of Corporate Enforcement. They reported the management company's failure to hold annual general meetings and its failure to draft accounts.

In another case, the residents had to contact the Office of the Director of Corporate Enforcement to report that the management company, which was controlled by the developer, had failed to consult the shareholders of the management company, in reality, the residents, on the draft accounts. In addition, and again after much work, residents of one of the apartment complexes have managed to appoint their own representatives, again using provisions within the Companies Act, as directors on the board of directors of the management company. Having done all this, the residents succeeded in firing the managing agent, who was awful, and they have appointed a managing agent who is considerably better.

However, what none of the residents who have been in contact with me succeeded in doing, using current legislation, is to force the developers to hand over ownership of the common parts to the residents. Even when resident-controlled management companies are maintaining the common parts of their apartment blocks, these companies are not always the legal owners of the areas they are maintaining and paying to maintain. The reality is that discovering and executing the solutions I have just described to the problems faced by the residents of apartment blocks in my constituency has required an enormous amount of work, a huge amount of money, a lot of patience and a vast degree of co-operation between the apartment owners.

We have an obligation as legislators, who are ultimately responsible for the legislation which provides the framework within which apartment developments are allowed, and their continued upkeep regulated, to provide a much easier means of resolving the problems the residents of apartment blocks constantly face. I would like, therefore, to outline some of the legislative solutions to the problems that apartment dwellers face. Deputy Penrose referred to some of these. First, planning permission should not be granted for an apartment building unless there is a condition attached to such a permission which compels developers of apartment blocks to form management companies and to grant shares in the company to all those who purchase units within it. Section 34(1) of the Planning and Development Act 2000 must be strengthened to include this specific stipulation.

Second, there must be a planning condition imposed on developers that they complete satisfactorily within a specified period an apartment complex, regardless of whether the development includes two or more houses. I recommend that section 34(f) of the Planning and Development Act should be amended accordingly. These are suggestions that would help from a legislative point of view.

Third, as soon as an apartment development is completed satisfactorily, ownership of the common parts must be handed over immediately to a management company. Too often my constituents tell me that developers are refusing ostensibly for one reason or another to hand over ownership of the common parts of an apartment complex. Suddenly, the developer applies for planning permission to add an extra storey to a block, and we then know the reason the developer was so reluctant in the first place to hand over ownership of the common parts.

The amending of section 180 of the Planning and Development Act 2000 would offer a mechanism for doing this. It would enable management companies, upon application to the court by a simple majority of individual property owners, that is, such an amendment must be drafted in such a way as to prevent a developer thwarting the desires of residents to take control of the common parts of their apartment complex, simply by retaining ownership of the apartments within that complex, to gain ownership of the common parts of the apartment complex.

Fourth, developers must not be allowed to take control of apartment complex management companies. In Britain, which has a much longer history of dealing with multi-unit apartment blocks, the solution which has emerged is the Commonhold and Leasehold Reform Act 2002. In that Act, a right to manage was established which is vested in residents of multi-unit apartment blocks. To exercise that right, residents of buildings within two or more units do not even have to apply to the court. They simply have to serve notice to manage on the developer or the owner of the common parts of an apartment complex. The notice to manage provides that the residents concerned wish to manage the property instead of the freeholder or developer and they have the right to set up a right to manage company for the purpose of doing so.

To exercise this new right to manage, residents do not even have to say that the developer is mismanaging the property. However, if the property is being mismanaged, which is clearly the case in the examples I have given, the residents can apply to the court to have the developer's interest in the property vested in the residents. In practice, the mere existence of this legislation on the Statute Book in the UK has led to a significant improvement in the conduct of managing agents, management companies and developers. Not for the first time has a parliament managed to change the behaviour of those subjected to its laws merely by providing an easy and cheap method of recourse to those wronged.

Together, these four legislative solutions could be provided by this House without much delay and they would have a profound impact on the lives of apartment dwellers throughout the country. I ask the House to support the motion.

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