Dáil debates

Friday, 13 November 2015

Multi-Unit Developments (Amendment) Bill 2015: Second Stage [Private Members]


10:20 am

Photo of Clare DalyClare Daly (Dublin North, United Left) | Oireachtas source

Listening to the Minister of State reminded me a little of the experience, which Deputy Murphy referred to, of people in constituencies such as ours who were told when queueing to buy houses that if they did not sign then the price would go up by €10,000 or €20,000, and not to worry about the detail of the management company because they could later dissolve it. The experience was of course radically different. The Government's response to Deputy Murphy's Bill today is similar. The fear is that if it agreed with Deputy Murphy this would remove the protection of the Multi-Unit Developments Act 2011, when the point being made, in part, is that the Act has not provided the protection we thought it would and has not solved the problem created by the mushrooming of management companies in the early 2000s, which arose from a change in the nature of the buildings going up at that time and the move away from the traditional semi-detached type of development to more duplexes, which had probably never been heard of before then, combined with apartments, terraced houses and so on. People found out, to their amazement, only a couple of years after moving into those houses that they were expected to pay an annual fee for services that would normally have been deemed public services, such as grass-cutting, the maintenance of lights and upkeep of the general area. In many instances these people had bought modest dwellings at massively inflated prices and were paying this annual fee when those services were provided out of the public purse by the local authority to people in more settled and affluent dwellings down the road. This situation has been aggravated by the introduction of the local property tax, because these people are now hit on the treble through general taxation, which should fund local authority services, local property tax, which should also cover that, and the management company fee. In most of these instances, the hard-pressed families who are struggling to pay their mortgages and other bills are not getting any service for the money requested.

The Multi-Unit Developments Act 2011 was designed to make it easier for owners to control the management companies and to exercise democratic control over the bills and how those companies would be structured. In practice that has not worked, because many of these developments are too large. In a development with 500 owners, made up of duplexes and apartments, there will never be wholehearted agreement. That is impossible, particularly when there are different interests at play - for example, the apartment owners need a collective interest but the house owners less so. It is understandable, however, that apartment owners would not want to lose the revenue from the house owners’ contribution. Even where there is a clear division between services, many management companies exist for no reason. People think that once the local authority takes in charge the roads, footpaths, lighting and large green areas, the management company will dissolve and go away, but they then discover that the management company has taken over the services the developer was responsible for prior to that. They realise the management company existed in name only to provide public liability insurance and probably the maintenance of tiny incidental pieces of open space with a bit of shrubbery, which any able-bodied child could fix.

A management company is certainly not required in that regard. The Multi-Unit Developments Act is not fit for purpose in that it does not allow people who do not get any service to dissolve a management company or to protect their own interests in that regard.

In my area, there is an estate comprising over 400 units, all of which are standard housing units of various types. There are no apartments or duplexes in this estate. Most of the services, including the roads, large green areas and so on, have been taken over by the local authority. Outside of that there are a few incidental pieces of open space and a little on-street car parking, which is used to legitimise the existence of a management company. Many of these open spaces and so on exist only to perpetuate and fund management companies. People do not get any services, which is absolutely ludicrous.

Deputy Murphy is trying by way of this legislation to correct an anomaly in the 2011 Act. In my view, we need to review the Multi-Unit Developments Act 2011 in its entirety. The deficiency identified by Deputy Murphy whereby, unwittingly, the 2011 Act, rather than protecting people by ensuring they do not enter into an arrangement whereby they could not dissolve a management company, might actually frogmarch them into such an arrangement. That is ludicrous. I do not see any sense in the Government refusing to accept this Bill. As I said, we need to review the 2011 Act in its entirety.

There are a number of other estates in my area comprising 100 units or less, which are evenly made up of houses, apartments and duplexes, with an even division of services. It is easy to delineate that the houses in these estates get no services and so they can be easily sliced off. The idea that even in those types of areas which are more manageable residents have not been able to exercise the withdrawal of houses from management companies exposes the limitations of the 2011 Act, which is a body of work that we have to review. For the moment, it is useful that Deputy Murphy has highlighted and flagged this issue. The Government would be mad not to accept this legislation. We should be trying to prevent what is happening in this area. While the 2011 Act provides some protection for apartment owners. it does not protect the many other property owners in these multi-unit developments. The purpose of that Act was to assist property owners in these developments in maintaining control over and making decisions in relation to management companies, including dissolution of same if they so wish, but it is not fit for purpose in this regard. In that sense, Deputy Murphy's Bill is welcome and I support it.


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