Trevor Sargent (Dublin North, Green Party)

Ba mhaith liom mo bhuíochas a ghabhaíl leis an Cheann Comhairle as cead a thabhairt dom an cheist thábhachtach seo a ardú. I welcome the Minister of State, although I was hoping the Minister for the Environment, Heritage and Local Government, Deputy Roche, might attend. The issue I wish to raise, relating to management fees, will grow and will need serious consideration by the senior Minister.

The front page of The Irish Times today states that child care costs are rising at five times the rate of inflation according to the Central Statistics Office. The Minister of State can imagine how difficult this is in itself. On top of that, many first-time buyers are being landed with management fees. People have contacted me on this issue from practically all of the towns in Dublin North. I have no doubt this is a countrywide problem, as other Deputies to whom I have spoken will indicate.

One resident in a house states:

I am a resident at Barons Hall, Flemington, Balbriggan. I am writing to appeal to you to take action on a national level for the plight of residents like myself who are being forced to pay fees to cowboy companies. I, like all other residents who live in this area, am disgusted at the idea of paying out management fees for basic services that are not done and which should be done by the council anyway. I, like others, never found out about management fees until signing for my house. By that stage it was either sign or lose the house.

Smith Property Management, on behalf of the builders, Pat Neville Developments, are trying to extract €250 a year from householders for the most basic of services, such as cutting grass and cleaning the area, which they do not even bother doing. Other estates in Balbriggan do not pay management fees and have these basic services provided by the council. This is tantamount to discrimination.

Management companies are completely unregulated and it seems they can charge what they want and provide any type of service they think they can get away with. I am asking you to take up this case with the Department of the Environment and Fingal County Council. This is a problem which will not go away without political intervention. I am a law-abiding, tax-paying citizen and I have always paid my bills on time, but I feel so strongly about this situation I have refused to pay.

I have written to the management company and their reply was lame. The bottom line is that they should be outlawed and properly regulated for apartment owners.

That householder may well come to find that if the house is sold, he will be landed with an enormous accumulated fee. That is where the Government is favouring a type of extortion by not regulating such companies and allowing the sector to grow and get worse.

I mentioned a charge of €250, but they can vary. At a recent public meeting in Balbriggan I heard of charges of between €200 and €1,500 per year per home or apartment. This would be hiked up every year. One management company published accounts stating that €133,000 in fees were collected, of which €23,000 was spent on administration and only €6,000 on maintenance. This brazen profiteering is only happening because the Government is starving local authorities of staff and finance while failing to legislate what is in many ways corruption and extortion out of existence.

I ask the Minister of State not just to take on board legislation. That could be done quickly and we have found that out this week. It is firstly a matter of awareness. I urge the Minister of State to ensure that awareness is raised in the public mind of the possibility of management companies coming in at the point of sale of a house like wolves in sheep's clothing. In England there is a right to manage other types of documentation based on the Commonhold and Leaseholder Reform Act 2002. We do not have the type of documentation or awareness in this country because we do not have as much a tradition of living in apartments as other countries.

People are therefore being ambushed. The Government is standing idly by and I question how irresponsible that is. For example, Fingal County Council does not put too fine a tooth on the matter when it states with regard to management companies:

The current model, unregulated by a lack of any controlling primary governing legislation, is open to abuse. The most common is where a developer holds a controlling interest either by some clause in the management company structure or by controlling a significant number of properties by retaining ownership (renting, not selling them).

Under section 180 of the Planning and Development Act 2000, as long as the management company is in situ, people cannot hold a plebiscite. As long as the developer holds one of the properties, the estate is allowed to continue on with a management company. Money is being demanded from people, and this is in many ways extortion. A number of recommendations have been made by Fingal County Council on primary legislation. One such recommendation states that matters that can be controlled by legislation are a prohibition on developers withholding the handing over of control for a prolonged period, and the introduction of a formula to calculate reasonable contributions to prevent the imposition of excessive management charges at the outset.

The necessary regulations are not in place and the Minister of State is standing idly by while extortion takes place. I urge him to regulate this activity and to promote awareness of the situation so that people are not ambushed into paying those charges. He should act on this without waiting for the Law Reform Commission. He should act on receipt of its report but, in the meantime, people are being drained of resources they scarcely have. If the Minister of State had to pay the charges he would do something about it.

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