Dermot Ahern (Louth, Fianna Fail)

I agree with Deputy Rabbitte that it is important to pass this Bill, and I accept that time is short. Given that we are coming up to Christmas and that there is a short term after that, it is important to pass it. Most of the amendments go to the very heart of the legislation we are dealing with, which is how best to ensure satisfactory completion of the common areas of multi-unit developments. Obviously, there are differing views on the issue of completion, and whether this Bill can reasonably deal with the issue of ultimate completion and snagging of multi-unit developments is a moot point.

In amendment No. 1, Deputy Rabbitte seeks to involve the planning authority in the process of ensuring satisfactory completion of the common areas. In Nos. 2 and 35, Deputy Stanton proposes a similar solution involving the planning authority and its inspectors. However, the planning authority can have no role here because the planning code does not deal with completion issues. The planning Acts would have to be changed if the planning authorities were to be given such a role. In amendments Nos. 18 and 19, Deputies Rabbitte and Stanton propose the retention of 5% of the purchase price pending completion of the development. This is, in a superficial way, an attractive idea, and was, as Deputy Rabbitte said, advocated by the Law Reform Commission in its report. However, the Law Reform Commission was pretty silent about how this could be dealt with. My Department has discussed this proposal with various stakeholders and, while there is some support for the idea, there is also great concern that such a retention would lead to unnecessary disputes and disagreements between developers and owner management companies, OMCs. I have considered this closely because I undertook to do this on Committee Stage in order to try to accommodate Deputies' concerns.

Deputy Rabbitte has tabled two further amendments with regard to completion. No. 47 sets out an excessively detailed and complex procedure concerning completion. I believe the provisions in sections 3, 4, 5, 11, 12 and 21 deal adequately with the issues raised in this amendment and, for that reason, I cannot accept No. 47. With regard to amendment No. 48, which was also tabled by Deputy Rabbitte, I am not aware of any provision under the Planning and Development Acts or the Building Control Acts which would permit planning authorities to require performance bonds in order to ensure snagging of multi-unit developments. The proposal in subsection (3) of the amendment is a matter which would need to be considered by the Department of the Environment, Heritage and Local Government in conjunction with the planning authorities in the context of future reform of these codes.

As I explained at the select committee, I fully recognise that difficulties arise in ensuring completion. I have already amended the Bill by providing that, in future, there must be a contract between the developer and the OMC which will contain particulars of arrangements relating to compliance with statutory requirements and the completion of common areas. I have also provided that the OMC will have independent legal advice at the expense of the developer. I am now tabling a further amendment, No. 16, to complement these earlier changes, which were made in response to representations from the Opposition. This amendment has two elements. First, it acknowledges that the contract between the developer and the OMC may make provision for retention of moneys pending completion of the common areas. This will not be mandatory, but where the contract provides for retention of moneys, it must also provide for a mechanism to release such funds. Second, the contract must contain details of a process for resolving any disputes between the parties about completion of the development. This could take the form of expert determination, arbitration or other forms of alternative dispute resolution. The objective is to avoid recourse, if at all possible, to the courts.

Amendment No. 15 is a technical amendment linked to No. 16. Section 5, which deals with multi-unit developments that have been substantially completed, requires that the developer transfer the common areas to the OMC without retention of any beneficial interest. The question of the point at which the development is substantially completed has arisen and, in order to provide certainty about this, I am tabling amendment No. 32, which provides that the development is regarded as substantially completed when the sale of 80% of the residential units has been completed.

With regard to amendment No. 17, tabled by Deputy Rabbitte, this matter has already been addressed by the insertion of section 8(3), which requires that a unit owner must provide contact details to the OMC. Deputy Rabbitte has also tabled amendment No. 45, which seeks to delete section 3(11). This subsection explains what is meant by unreasonable withholding of consent, which is referred to in subsection (2). It has been included in order to safeguard the interests of mortgagees, and consequently, I am not able to accept this amendment.

Finally, I come to the amendments dealing with fire safety in multi-unit developments, which is an important matter that must be addressed. In amendment No. 113, Deputy Stanton proposes that prior to occupation of a development, a fire officer must inspect the building and confirm that it is compliant with fire safety standards. I agree with the thrust of this amendment. In amendment No. 14, I am proposing that, in future, a developer must provide the OMC with certification of compliance with the requirements of the fire safety certificate issued by the building control authority in advance of the construction of the development. The certificate must cover the common areas being transferred to the OMC and must be supplied to the OMC prior to the sale of the first residential unit. I intend to make regulations, as provided for in amendment No. 26, specifying the categories of suitably qualified persons who may certify such compliance following consultation with the Minister for the Environment, Heritage and Local Government.

I apologise for the length of this intervention, but these amendments go to the core of two important issues in this Bill. I acknowledge the concerns underpinning the amendments that have been tabled by Deputies Rabbitte and Stanton, but I believe the amendments I have tabled, taken together with earlier amendments, will address their concerns in a manner much more in keeping with the structure and content of this Bill.

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