Joanna Tuffy (Dublin Mid West, Labour)

I welcome the Bill. If we could do one job before the end of this term and pass this Bill, it would be progressive and make a big difference to people who live in apartment units and multi-unit developments. The part of the Bill dealing with this area in the one in which I have taken the most interest because the issues that have arisen between apartment owners and managing agents have been a major part of the matters about which politicians have been contacted in recent years. This Bill will provide practical help to people in those circumstances.

In recent years there has been huge growth in the number of people who live in apartment units. An increasing number of apartments were built in areas throughout the country. That occurred partly because of the guidelines covering higher residential density issued by the Department of the Environment, Heritage and Local Government. Thus, it transpired that applications for more apartments were given planning permission and were built. A related factor is that the very high price of housing in recent years has meant that for some people apartment living was a more affordable option. Many affordable units people have acquired in recent years have also been apartments. Deputies in every constituency, certainly it is the case in my own constituency, are dealing with many more constituents who live in apartments or units in areas which have management company structures and are managed by managing agents. Matters relating to apartment living are a much bigger issue in terms of the work of politicians. It is also a much bigger issue in the communities we represent.

A problem in this area identified in various reports is that many people who have bought apartments do not understand the difference between management companies and managing agents, nor do they understand their role in the whole scheme of things. People have often said to me that they will let the management company bring them to court and I have pointed out to them that they are a member of the management company. Many people do not understand that. They treat the management company as if it is some kind of separate institution such as a county council. There is great confusion over the role of the managing agent and that of the management company. Such confusion is very prevalent. There is a major information deficit among people who are responsible in this area. If one is a apartment owner, one is likely to be a member of a management company and, therefore, one should play a role in how the management company operates and who it employs to management the property.

Matters have been exacerbated lately because of the crisis in the property market. I know of areas where the structure of the management company and the managing agent almost seems to be falling apart. This has arisen where a developer has not finished the property properly, the building is not insured, there are no proper fire safety certificates, many people in the development are not paying their management fees and this means that money is not available to provide the services required. Matters will get worse in the next few years. More problems will arise, many of which will be related to the downturn in the property market. Some developers will not complete their work or will find it difficult to do so. We are moving into unknown territory in this area and such problems have already been raised with me, as I am sure they have been with other Deputies.

With all the problems faced in some apartment developments, it will be difficult to get some apartment owners to take on the responsibility of being directors of the management company because in doing so they will face huge potential exposure that is not within their control. If the management company and its directors have a problem with the managing agent and the developer, insufficient money is being collected from apartment owners towards the management fees and large arrears of payments are owed for insurance and maintenance costs, the directors of the management companies will face major exposure. We want responsible people to take on that role. In the case of a problematic development which has not been finished and where issues have arisen on foot of that, it will be difficult to get people who are willing to take on the role of directors of management companies to solve the various problems that arise because of the potential exposure they face in putting themselves forward. This matter is not directly related to this Bill but it is related in the sense that the Bill, by giving a statutory basis to the functions of the National Property Services Regulatory Authority, will provide a mediation mechanism between apartment owners and managing agents. That will be helpful as opposed to a confrontational approach of going to the courts to get people to pay their management fees. When a mediation mechanism exists, there will be discussions and people will probably become more aware of their responsibilities and the need to work with their management company and managing agents to solve whatever problems exist.

The most important feature of this Bill is the fact that it gives a statutory basis to the National Property Services Regulatory Authority in its functions related to managing agents. Management agents are currently unregulated. The experience of people in terms of managing agents is mixed. Some people who have gone into managing property developments in recent years have no experience in the field and do not know what they are doing. There is an element of that. When things were going well, that was okay. There was a problem with people not paying their management fees but matters will get much worse if people are in arrears and they also find it difficult to pay their mortgage. The issue arises as to whether there will be evictions. There are major issues for management companies and managing agents to face. The fact that this Bill requires managing agents to be licensed and to meet certain requirements is welcome. Hopefully, we will be able to weed out the good managing agents from the bad managing agents or the latter will have to bring themselves up to scratch. That is the main reason this Bill is welcome.

I am aware of both sides of the equation. There is the person who cannot afford to pay his or her management fees or does not want to pay them because he or she considers services are not being provided. I have dealt with that type of person and also with people, directors of management companies, who are experiencing a shortfall in the management fees and cannot pay the managing agent to do the job properly. It is costly for a management company to go to court and there is a certain element of risk in going down that route. Some of them have resorted to other measures, which probably bring them into a grey legal area. One hears of management companies clamping the cars of apartment owners who have not paid their management fees. Such a measure often works in that the fees are collected but in doing that they are entering a grey area. I would question whether they have the legal authority to do that. The clamping of cars on private land is another issue. I question the legal authority for management companies of developments to clamp cars. My car was clamped by a clamper in a private development last week while I was attending a local meeting and I had no option to pay the €120 fee. I question if there is a legal authority for cars to be clamped on private lands. This has not been challenged. In the case of public lands, the authority would the Minister for Transport in terms of the Roads Acts and so on. While one can see a chain of authority for clamping on public lands, such authority is not clear with regard to private developments. There is no control over what clampers charge.

Management companies are deciding not to go to court because the process is so fraught and costly and does not necessarily result in management fees being paid. If a case is taken to court, it can cause terrible hardship for the person against whom proceedings have been taken. I know a person who, believing they were within their rights not to pay their management fees, was taken to court by the management company and must pay not only the arrears owed for management fees but also a large legal bill. There are two sides to every story. It is preferable, therefore, to have the circumstances provided for in the Bill to enable disputes between parties to be mediated. This is the most important aspect of the legislation with regard to management agents. Mediation of disputes is much better than trying to solve disputes in court and the mediation process provided for will be extremely helpful. Similar arrangements could be extended to other civil matters.

We will have to await how the legislation plays out but I am anxious to see the Bill passed. I am often contacted by parties on both sides of these disputes, namely, apartment owners who are management company directors and apartment owners who are not paying management fees and are in dispute with the management agents. What advice am I to give to those who contact me? One can only offer a little information as one cannot direct people to any specific agency for assistance. The National Property Services Regulatory Authority will not be able to deal with these types of cases until the legislation has been enacted. It will be great for Members to be able to advise people who contact us to seek mediation services from the National Property Services Regulatory Authority. I hope many of these disputes will be solved through mediation and negotiation.

The National Property Services Regulatory Authority appears to have done considerable groundwork prior to the legislation being introduced. I have checked its website several times and it contains a great deal of information. It is important the authority is resourced and has systems in place to ensure a backlog of cases does not build up. People will take seriously the option of availing of an independent mediator. If the process of mediation between the two sides is relatively straightforward, many disputes will be resolved quickly through compromise. This may mean people agreeing to pay arrears by instalments and so forth.

Much more needs to be done to educate apartment owners about their rights and responsibilities. While good work is being done to provide information to apartment owners about the law as it stands, for example, on what is the position when one buys an apartment, this information is highly fragmented. Booklets and guides have been produced by the National Consumer Agency, the Office of the Director of Corporate Enforcement and other bodies. Perhaps the National Property Services Regulatory Authority will consolidate this information in a single booklet which sets out all the relevant information in user friendly language. It would not be a bad thing if such a booklet were delivered free of charge to all apartment developments and owners. If people understand their relationship to the management company or agency, fewer problems would arise. Education is important in this regard.

Representatives of the National Property Services Regulatory Authority should update Oireachtas Members on the latest developments while we are deliberating on the Bill. It could, for example, inform us about how the legislation will work in practice, what steps will be taken once it has been passed and what groundwork has been done to ensure matters run smoothly.

While all of us are interested in property regulation generally, the most pressing issue for Deputies in terms of the work we do in our constituencies relates to the problems that arise between people living in apartments and their management agents. The roles of management companies and agents overlap. It would be most helpful if the National Property Services Regulatory Authority were to update Members as part of our deliberations on the Bill.

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