Chris Andrews (Dublin South East, Fianna Fail)

I welcome the opportunity to contribute on the Bill. The term "multi-unit development" is used to describe a building comprising multiple residential properties that share certain physical areas, such as car parks, halls and gardens, and certain services, including security and waste disposal. Notwithstanding Deputy Sargent's comments, the Bill will give home owners who live in multi-unit developments like apartment blocks or small housing estates much greater and long awaited legal protection when enacted. I am pleased to note that the legislation will cover not only new developments, but those that have already been completed.

As a public representative for Dublin South-East, I am all too familiar with the considerable problems people have experienced with developers who have been reluctant to hand over developments' common areas after their completion. I regularly receive correspondence from constituents who have experienced difficulties with the property management companies assigned to manage a particular set of apartment blocks. The most common problem seems to be a lack of transparency as to who is responsible for what and little is seen in return for the money being paid.

The Minister for Justice and Law Reform has touched on how current legislation does not meet the needs of people living in these new types of development, which only became popular in the early 1990s. There has been a significant growth in apartment living in recent years, with areas such as the docklands being developed into prime residential locations. However, many people were anxious to purchase and did not inspect to any great level of detail the ownership arrangements into which they were entering, namely, their responsibilities and those of the developers, the fees and other rules. Adjusting to apartment living takes people a while.

The first and most welcome aspect of the legislation is that ownership of the common areas will be transferred to the property management company before any apartment is sold. This will ensure that the practice of developers holding onto a few apartments or units in order to retain control of the management company will be stopped. It will also ensure that developers cannot return and make changes at will. In cases where the common areas have not already been transferred to the property management company, the Bill provides that they must be transferred within six months of its enactment. This is an important provision.

Another important feature in the legislation is the new court-based dispute resolution mechanism, which will apply to new and existing multi-unit developments with a strong emphasis on mediation, which is the desired route. If mediation fails, the court may make an order where it is satisfied that a right has been infringed upon or an obligation has not been discharged.

This is critical in ensuring that people have somewhere to turn if a developer or management company is not discharging their duties correctly. Another new requirement will be a minimum contribution of €200 per unit for a sinking fund to meet any large and non-regular costs. The sinking fund makes the financial aspects of maintaining an estate smoother and easier. We are all familiarwith stories of half finished hallways, gardens and recreational areas that are not maintained despite people paying in some cases exorbitant maintenance fees.

This leads me on to how management fees are arrived at and justified. Apportionment refers to the method in which the percentage of the overall service charge for the development is attributed to individual owners. The calculation may be based on a number of factors, for example the size or type of unit, the services availed of or the total number of units in the development. In the future an owners' management company must establish and maintain a scheme of annual service charges and this must be approved by a general meeting of the company's members.

The annual charge must be calculated on a transparent basis and be fairly apportioned between apartment owners. The service charge may not be used to defray expenses on matters which are the responsibility of the developer or builder. Service charges in respect of any unsold units must be paid by the developer, and will not be fobbed off to those people already in situ in a particular development. That is an important aspect to the Bill and very welcome.

The Director of Corporate Enforcement has, in the past, made reference to the growth of management companies being struck off the Companies Register for failure to file annual returns. The consequences of this for property owners is often more serious than they realise. For example, it may be difficult to get an insurer to cover the structureof the building, mortgage lenders may invalidate the mortgage on an uninsured property and no one can issue share certificates, so it will be difficult to sell the property, in the event. Under this new legislation struck off property management may be restored to the Companies Register within a six-year period provided all outstanding annual returns are submitted. The Department and the Minister have engaged very actively with the public on this piece of legislation, which is most welcome and has been positively received.

One aspect of it that has been brought to my attention recently concerns an individual being allocated an apartment from the social housing list, where the landlord is a member of a voluntary housing group, perhaps. There is a sense among people allocated such social housing apartments that they are not being consulted as regards the management of the particular apartment block, and voluntary housing management should be engaging with social housing tenants within the various apartment blocks. If this were to be done, it would make a positive difference. Obviously the service charge is at a reduced rate for people allocated social housing units, but there is still a strong case for their being involved in management decisions that affect the whole apartment block. Some 20% of the apartments in the Dublin docklands have been let as social housing, and this has been very positive. However, that in itself brings difficulties because the individuals living in these units believe they are being excluded in a way that affordable or private tenants are not, and this is something the legislation could examine in more detail.

During the property boom people were often so anxious to purchase, critical details may have been overlooked in their desire to secure a home. Eventually, people realised they were liable for unexpected fees and had few or no rights, only after they had made a purchase. This legislation, when enacted, will ensure that the entire process is clarified and that people will have a much greater say in how their development is run. That is why I welcome the Bill and look forward to its speedy enactment.

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