Brian Lenihan Jnr (Dublin West, Fianna Fail)

The Government is well aware of this extremely serious problem, which affects many individuals who live in multi-unit developments or the more traditional mixed developments to which Deputy Varadkar referred. The Government is very concerned about this matter.

I welcome the tabling of this motion by Fine Gael because this debate has placed a focus on an issue that was of great concern to me during my time at the Department of Justice, Equality and Law Reform. The original motion outlines various specific issues, all of which are dealt with in the consultation paper published by the Law Reform Commission. It was envisaged at the time of the publication of this paper that a final report, in which detailed proposals for the Government in respect of this matter would be contained, would be prepared by the Law Reform Commission. I am sorry that this report has not yet been received. I understand that it will be forthcoming in a number of weeks.

The Government decided to establish a high level Cabinet sub-committee, the membership of which comprises the relevant Ministers with responsibility in this area, to commence work on this subject prior to the publication of the Law Reform Commission's final report. The Law Society put forward an extremely detailed submission to the Law Reform Commission in recent weeks and the latter has delayed its final consideration of this matter pending its examination of the views of the former.

Anyone who examines this area will discover that it is an extremely difficult one in respect of which to legislate. The core difficulty is that the purchasers of these units, regardless of whether they are located in multi-unit, single or mixed developments, entered into binding contractual commitments in respect of the management of their estates. These people are, therefore, locked into arrangements as a matter of private law. It is always difficult to legislate in such circumstances.

Many of the abuses in this area have been outlined by previous speakers. I do not intend to add to the record save to say that I have witnessed and have experience of many of those abuses.

One of the major difficulties in this area is that when a purchaser is put in possession of property, he or she is not placed in an immediate position to exercise his or her rights in respect of their management company. The effective control of these properties rests with the developers long after it should be passed on to the purchasers. The Law Reform Commission intends to bring forward proposals in respect of this matter.

One of the reasons an interministerial committee is required to investigate this matter is that the changes relate not just to property law, but also to company law. In such circumstances, interlocking legislation will be required to deal with the company and property law implications attaching to these developments.

In the context of company law, a specific type of company will be required in respect of the developments to which we are referring. We cannot continue to operate the traditional bells-and-whistles company law model with regard to this type of arrangement. A specific type of company will, therefore, have to be devised.

I look forward to the publication of the final report of the Law Reform Commission because it will provide a template upon which the Government can take urgent action in respect of this matter. There is no doubt that such action is required. We will, however, encounter difficulties regarding those purchasers who have locked themselves into binding legal arrangements. We are not merely discussing a practice that can be varied; we are referring to legal rights and entitlements that have been arrived at by the vendors and purchasers of properties.

As Deputy Varadkar quite fairly acknowledged, there are instances where management is desirable and not just in the context of multi-unit developments. There are some purchasers who want gated developments and who are themselves happy to provide services. If they are so minded, I have no objection to their doing so and the State should facilitate their wishes. There are, however, many people who have experienced difficulties with management companies. In that context, we must consider the issue of corporate compliance and the level of such compliance to date.

The legislation relating to property management agents, which is with the Parliamentary Counsel, is overdue. I decided to proceed in any event with the establishment of the interim board. I accept the fact that it does not have legal powers but it is better that it is commencing its work now rather than being obliged to wait until after the establishment of the authority. The classic model is that the House establishes an authority and then implements it a few years later. At least the regulatory authority for property services is starting to operate in Navan. In time, legislative provision will be made that will allow it to make more effective decisions.

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