Kieran O'Donnell (Limerick East, Fine Gael)

I support this Private Members' motion brought before the House by Deputies Phil Hogan and Terence Flanagan. This issue is nothing new and has been going on for the past ten or 15 years. My colleagues have dealt with the position on the ground. I recommend that a few practical measures be put in place. The type of structured company which needs to be put in place is a company limited by guarantee without having a share capital. Many management companies are being established as companies with share capital. A simple structure would be a company limited by guarantee without share capital, which would ensure an equal vote.

It is absolutely critical for legislation to be brought before the House to put in place structures that would ensure a smooth transition to owners of the apartment blocks within a short period after the development is completed. The current process will probably be a feature in future whereby some developments take a long time to complete and it could be a number of years before responsibility is handed over to the owners of the apartments.

There must be a clear undertaking from developers that they will explain to people who own apartments their duties when they take over management of the company. A few practical measures should also be put in place. For example, the annual general meeting should be set for a specific date and management meetings should be held at regular intervals so people within developments are aware of the funding involved and how much it costs. In addition, service charges should be explained so people know exactly what they are getting into.

Sinking funds are nothing new but they have never been enforced. The purpose of a sinking fund is to ensure provision is made for the upkeep of communal areas. In many cases, the option was not taken up and the areas run into disrepair. This must be explained.

The key element is proper legislation, which should be brought forward. I heard the Minister, Deputy Dermot Ahern, speaking earlier about changing the rules in terms of filing returns with the Companies Office. This should be considered carefully as currently lay people are taking over the running of management companies. They spend their time chasing down the developer to take over the running of the company. The requirements with regard to the Companies Office are not explained, and when they find themselves as directors, they are not able to meet their deadlines. I welcome the measure outlined by the Minister but the system must operate practically.

We need legislation as a matter of urgency and it must be debated. A key element is for people to be made aware by developers of exactly the type of apartment being bought and their duties. A series of practical measures should be introduced to let owners know what they are paying for. If people were aware of the work being done based on the contribution to management companies, the majority would agree with it. Currently, nobody is being held accountable.

See this speech in context