Eamon Gilmore (Dún Laoghaire, Labour)

I sent the information to the Minister on 11 January 2006. I wrote to him on that date about this point. In the course of his reply in November he told us the following week he would launch a draft of modern guidelines for planning authorities on development management. I interpreted that to mean there would be some response in those draft management guidelines to address the issue of management companies. There was no mention of the management companies, however, in the draft guidelines which were published by the Minister within a couple of weeks of the debate last November. That matter was the subject of a letter I sent to the Minister on 11 January 2006, in which I addressed both the absence of action on the draft management guidelines to deal with management companies and the issues raised in the manager's report from Fingal County Council.

This issue has been raised by a number of Deputies, including myself. It was the subject of a Labour Party motion last November and is now the subject of a Fine Gael Private Members' Bill, yet the Minister is seeking extra time. This is not an area where additional time can be played for because people are being fleeced and financially crippled by management charges. There are housing estates where management companies have been inappropriately established as a means of dealing with the maintenance, running and upkeep of the estates.

People currently buying houses and apartments are being subjected to a requirement to join a management company and pay management charges in a completely unregulated environment. It is bad enough that young working families who are trying to start out in life must pay a huge price for their homes and furnishings, in addition to legal and other professional fees. They are then caught, however, for an annual charge for something that, certainly in the case of housing developments, should be the remit of local authorities.

I accept the idea of management companies ordering and maintaining residential developments was previously confined to private apartment developments and some small, expensive housing developments. Until recently, normal housing estates did not have management companies or charges. These housing estates were usually designed, constructed and completed to a standard which the local authority required for taking in charge. As we know, some developers failed in their obligation to complete housing estates satisfactorily, a subject that has already been addressed by a Labour Party Bill which passed Second Stage in this House in spring 2005.

In the case of apartment developments, matters were a bit more complicated, so a solution was found whereby developers would establish a management company, generally comprised of the owners of the apartments. This management company would have responsibility for the care, maintenance and management of the common areas. The apartment owners would pay an annual charge to the management company for these services. This practice was largely confined to apartment developments and, except for a few exceptional circumstances, it did not apply in normal housing developments. The picture has changed since. We now have the problem of management companies being used in standard housing developments and the problems which arise in mixed types of developments containing houses and apartments where the distinctions are blurred. The use of a management company which would have been appropriate within the immediate curtilage of the apartment buildings is extended to include the car parking area, roads and the general open space.

Other problems which arise, especially in apartment developments, are those associated with multiple ownership. In some cases the developers of apartments retain ownership of quite a number of units. The old situation was that a block of apartments was sold to individuals who either lived in them or used them as investment properties and let them. Generally one had one apartment per one owner. We now have situations where people buy multiple units in apartment blocks or where the original developer or a company associated with him or her retains ownership of some or large numbers of the apartments, in effect controlling the management companies established.

Many devices are used to do this. One is where the original developer initially has control of the management company and will not cede that control until the last unit is sold. All the developer has to do is retain ownership of the last unit and effectively he or she retains control of the management company. It is a jungle out there for people trying to buy homes. They are trying to make ends meet and are being fleeced, not only for the price of the unit of accommodation in the first place but also for continuing charges.

It is scandalous that we return to this issue month after month and session after session and the Government has not budged. Asking the House to wait another nine months to deal with an urgent problem long past the stage when it should have been dealt with is unacceptable. I take this opportunity to again call for the introduction of measures proposed by the Labour Party last November to ban the use of management companies in normal housing estates. They should be taken in charge by local authorities. Where management companies must apply they should be regulated and the Fine Gael Bill provides a framework for such regulation. Some relief must be provided for people already stretched by payment of their mortgages from having to pay a charge for what should be a public service in the first place and for which, in any event, they pay taxes.

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