Terence Flanagan (Dublin North East, Fine Gael)

I welcome the opportunity to continue my contribution on this important legislation. I would like to mention other difficulties faced by apartment owners with regard to the Bill. For example, on the issue of satisfactory completion of a development, there is no legal means of ensuring that a development is satisfactorily completed. The meaning attached to "satisfactory completion" is open to interpretation and is quite vague. The Minister needs to look at this. The key issue is to ensure the developer completes the individual phases of the development properly and within the terms and conditions set down under the planning permission he was granted. I am interested in the Minister of State's view on that issue.

Both the Law Reform Commission and the Royal Institute of the Architects of Ireland have recommended in regard to the completion of common areas that 5% of the purchase price should be retained and ring-fenced for the completion of unfinished developments. Fine Gael will table an amendment on Committee Stage to include this provision in the Bill.

The Bill points to the courts as arbiters in disputes between owners and management companies. This is the wrong approach to take. The National Property Services Regulatory Authority was set up in 2005, more than five years ago, and has thus far been nothing more than a toothless quango. More than €3 million has been spent by that office to date, but it has not had any statutory work to complete. That authority should be the first port of call in terms of providing mediation services in cases of dispute or where owners have concerns in regard to the calculation of management fees. Recourse to the courts is inconsistent with Government policy in this area and contrary to best practice, and we propose to bring forward an amendment to address this issue. Moreover, consideration should be given to merging the National Property Services Regulatory Authority and the Private Residential Tenancies Board to ensure greater economies of scale.

In regard to management companies' records, there should be random audits by the Regulator to ensure proper records are being kept and that companies are complying with the legislation. Such inspections should be variously announced and unannounced. There is evidence that a number of management companies currently in operation are not keeping proper records.

In regard to voting rights, the Bill indicates that there will be one vote per unit owner, but this will apply only to new developments. What about residents of existing apartment complexes where there are major difficulties, with owners suffering because the developer has dominated the running of the management company? Those people are trapped and the legislation will be of little help to them. Will the Minister of State comment on that?

We must address the issue of management companies that are too large and become insolvent. In Clongriffin, in my own constituency, there are mixed management companies dealing with both apartment complexes and houses. These companies have grown too large and massive arrears have built up. Law abiding citizens who pay their fees are suffering because more than 60% of management fees is outstanding. It should have been the case that one management company was set up for each block of apartments rather than one large entity that is not in a position to deal effectively with the affairs of so many owners.

We welcome the introduction of monetary sinking funds. However, the €200 charge seems very low when one considers the situation in existing complexes where there are problems with elevators and deterioration of exteriors. Significant sums will have to be collected to fix buildings that are in disrepair.

Property management agents are currently unregulated and unlicensed, leaving many owners exposed and vulnerable. The Minister must bring the Property Services (Regulation) Bill 2009, which was recently passed by the Seanad, before the Dáil as soon as possible. The regulation of property agents must go hand in hand with the regulation of property management companies.

Fine Gael supports much of what is proposed in the Bill, including the name change from management companies to owners' management companies. This change emphasises that the unit owners are the real owners and that it is they, rather than developers and others, who should be in full control of management companies. As I said, the establishment of sinking funds is welcome, as is the setting and collection of service charges and the provision that there will be one vote per householder. We also support the obligation on developers to hand over the ownership of common areas of completed developments to the owners' management company within six months. In regard to the calling of the annual general meeting, the provision that 21 days' notice must be given to all owners and that owners' management companies will be in a position to make house rules is welcome.

The Bill fails, however, to address an issue that has been highlighted in correspondence from Fine Gael and other organisations, namely, the position in regard to single-owner management companies where there are both houses and apartments which require differing levels of maintenance and services. Owners of houses in such developments currently feel they are getting a raw deal in having to contribute to costs that are not relevant to them since they do not share common areas to the same extent as do apartment complex dwellers. They are aggrieved at having to pay the same management fees as apartment owners when all they generally require in the way of communal maintenance is grass cutting and landscaping. This issue must be reviewed. They should be made fully responsible for ensuring there are fire extinguishers on all floors and that they are working. Local authorities should grant fire certificates only if equipment is present and fully operational. The practice of issuing fire certificates without inspecting buildings must no longer continue. This is another example of light touch or absence of regulation in this country. Developers could produce the most perfect of drawings and be granted fire certificates without a fire officer from a local authority stepping foot in a given apartment complex to ensure everything is up to the proper standards and that owners could have full confidence that there is no threat to their safety while living in apartment complexes.

I refer to service fees. Certain apartment dwellers pay a service fee on a yearly basis. The legislation should state that the companies must use the fees collected for fire safety equipment and to ensure it is present on all floors and in apartments. This should be tied into the legislation as well.

I welcome the introduction of the legislation, although there are many holes in it. It has been watered down a good deal since its initial introduction in the Seanad. In this regard, a new explanatory memorandum should be produced because the Government has effectively produced a new Bill. Apartment owners are not pleased that the legislation is a good deal looser than when it was initially introduced. The Minister should provide the House with a proper explanation of why it has taken so long, almost a decade, since the regulation of management companies was first mooted. Why has the Minister taken so long to get it to this stage? Meanwhile, apartment owners are being fleeced as a result of continuous rises in annual service fees. Many are aggrieved that they have not been receiving a proper service and that there has been no one to turn to for dispute resolution or for any grievances they hold with regard to the maintenance of their complex.

Some 500,000 people, including many young people, who live in apartment complexes suffer on a continuous or daily basis. This legislation is unlikely to make much difference to these people in the short term, but hopefully it will do so in the longer term. Many home owners have paid exorbitant money to purchase apartments in complexes and, at a minimum, tight legislation should be in place to protect them, to secure their rights and such that there is someone who can help them with any relevant difficulties.

We know there are many insolvent management companies at present and that fees have not been collected consistently by management agents because certain companies are not functioning correctly. Will the Minister advise on what will happen in cases of extreme difficulty or dire financial situations which arise in an apartment complexes? Who will put things right? Will the State intervene or what will happen ultimately? Hundreds of unfinished housing estates throughout the country are made up of mixed developments and contain unfinished apartment blocks. What will happen to these and what is the future of these unfinished apartment blocks. We envisage this legislation as a first step. However, Fine Gael will table many amendments on Committee Stage.

See this speech in context