Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

I move: "That the Bill be now read a Second Time."

This is a very simple Bill. I tried to get this issue addressed in the first instance a few years ago by getting the evidence and giving it to the Minister in the hope that it would be included in an amendment to another Bill, but that has not been forthcoming. As a consequence, I decided to table this Bill. It is very simple. It is about how the definition in the Multi-Unit Developments Act is being interpreted. It will cause problems if it is not redefined in a way that was intended in the Multi-Unit Developments Bill, as originally proposed, which was subsequently amended in the Seanad. That change in the definition has caused the problem.

In 2011 or 2012 I was advised of a housing development in Celbridge consisting of nine houses. The solicitor advised the council when the planning application was being made that there was an obligation to set up a management company for the development. There were no apartments or duplexes, only nine terraced houses. The council spoke to the solicitor and it was advised that it was contrary to the county plan and Government policy as set out in a Department of the Environment, Community and Local Government circular. When I alerted the Minister I was asked to provide some information and I got a letter from Kildare County Council. The then Minister, Deputy Shatter, agreed to liaise with other local authorities to see if the same thing was occurring. I have heard nothing since even though I have made inquiries by way of parliamentary question and so on. It is about how this is interpreted and the Bill suggests a different interpretation.

In the early 2000s we started to see management companies typically being included in planning applications. They vary in type from a management company that has a lien on a property to something that is less difficult to untangle. The Multi-Unit Developments Act was introduced on foot of a Law Reform Commission report. Many people were complaining - I am quite sure the Minister of State knows this because it would have been typical practice in our constituency - that they arrived at their solicitor's office and the solicitor said, "This is just a requirement. Sign this or you don't get your keys." They did not realise that there was a recurring cost every year in the form of management company fees. These were not people buying apartments but people buying houses. It may well have been a mixed development and there may well have been some apartments within that. The Multi-Unit Developments Act was intended to apply some legal arrangements to multi-unit developments of apartments or where there were shared internal spaces such as lifts or common areas that had to be maintained.

There are all sorts of problems in that. It created a new bill, which in some cases was equivalent to another month's mortgage. When estates were being taken into charge there was a doubt over whether this could proceed if there was a dual responsibility with the local authority on one side and a management company on the other side. I am essentially trying to undo these. I have approximately a dozen examples, each of which is constructed differently.

I got legal advice on how to wind down a management company in order that I could give some generic advice to people who found themselves in that position, particularly but not exclusively in my constituency. It is quite an onerous task. In some cases the management companies have ceased to exist because they have not complied with company law and have been struck off. It causes all sorts of problems for people who are selling their houses if a solicitor completes a search and discovers there is a deficiency or something that is not quite as it should be. That is the issue around management companies generally.

The point I am making with this Bill is that some of these developments should not have management companies. Some if not all the local authorities are interpreting this as a requirement under the Act to insist on a management company, which is at variance with the Department of the Environment, Community and Local Government circulars. If that is insisted on, it gets included in the planning permission. As we know, a planning application is a legal process. Solicitors completing searches will go through it to ensure it is in compliance. There could even be complaints to local authorities that they are not in compliance if the management is not included.

In some cases management companies have operated in a manner that people would not have anticipated. For example, some people have got into significant mortgage distress and cannot make their mortgage repayments. The mortgage is often the first thing that is paid. However, often a parking permit will not be provided if the management company is not paid. At times it can create an unhealthy environment within a housing estate where neighbour is pitched against neighbour.

Formerly, in my experience, housing estates were generally managed by residents in an informal way, where they collected a residents' fee and collaborated in cutting grass and other maintenance. That practice was a good initiative in terms of community building. Management companies, particularly where there are issues of dispute, cause the opposite kind of community engagement and involvement.

I have no difficulty with management companies being in place where they are required, and I believe some of the provisions of the Multi-Unit Developments Act have been helpful. They have not always been followed to the letter of the law, but at least the law exists. While I have no difficulty with companies required to be in place, I do have a difficulty where we oblige estates to have them or where some local authorities make the inclusion of a management company an obligation in situations in which that should not be the case. This adds costs for people in situations in which it is unnecessary to do so and causes problems in getting those estates taken in charge. I have checked the law and obtained legal advice on this issue, and despite what the Department of the Environment, Community and Local Development says, if a management company continues to exist, there is often resistance to taking an estate in charge.

Deputy Michael McGrath tabled a Bill in the House some weeks ago seeking a reduction in property tax for specific groups of people living in housing where there is a management company. I have some sympathy for that view because those people are paying a management fee for all of the management services within their estate and receive no services from the local authority, not even road sweeping. Such people would surely feel aggrieved if they have to pay the same property tax as everybody else. It is vital we do not put impediments in place to getting estates taken in charge so that a more normal arrangement can apply, similarly to neighbouring housing estates.

The definition in the Act requires that all new residential developments, both apartments and conventional housing, will require a management company, as stated. This is contrary to national, and often county, policy. I am aware that in Kildare, the local authority was surprised the first time this happened and went out and got legal advice. It then came back and agreed that the developer's interpretation of this was right.

I do not care if the Minister accepts this proposed amendment and includes it a Government amendment in another Bill. I do not care whose name goes on it. What I care about is that people turn up at a solicitor's office, having struggled to get a large deposit together, and are then told they cannot have the keys of their house until they sign up to the management company. This involves money that they probably would not have factored into their budgets in terms of household costs. Then when the estate is completed and they try to get the estate taken in charge, they discover they have all sorts of issues in regard to winding down the management company. Most people only want to view a showhouse and then buy their house. If they can get the money together, they want to buy the house, move in and get on with their lives. They do not want to get involved in this kind of complicated legal arrangement that is surplus to requirement, adds to their costs and should have been dealt with when the Minister's attention was drawn to it.

It does not take a legal genius to read the definition in the Act and come to the view that some developers and solicitors have come to. Increasingly, I find that people are precluded from selling their houses where, for example, an estate has not been taken in charge or the bond has lapsed. This is an impediment to selling the house. Why would we put people in harm's way when that is unnecessary? I suggest it would only take 20 minutes to remedy this situation. I do not care if the Minister does not accept my Bill, provided she commits to dealing with this issue before Christmas. This situation should not be allowed to continue. We are starting to see a situation in which developers are making applications to build and we do not want to have a condition like this tied into planning permissions. This condition should not be there as it will cause problems for people in the future.

Before the Multi-Unit Developments Act was enacted, the issue of management companies arose over and over again. I remember debating the issue here in 2005 and 2006. I remember the celebrated case relating to management companies in Tyrellstown, which forced hands a little on the issue. This was probably the first piece of case law that showed some of the inadequacies regarding the issue. If I remember correctly, this involved a mixed estate with significant numbers of houses and apartments and with some management companies set up directly by the local authority.

I urge the Minister to sort out this issue. If my Bill is accepted, all it will require is five minutes on Committee Stage. I do not care if the Department wants to repackage it as something else, provided something is done. It makes me angry to see something like this continue when it is unnecessary, will cause problems, will cost people money, will cause significant administrative hassle for local authorities and will need solicitors to check back and forth on the issues. The provision is at variance with the Department of the Environment, Community and Local Government's circulars. To be honest, I do not know why I have to raise the issue here and why it was not dealt with when it was drawn to the Minister's attention three or four years ago. It should have been dealt with quickly and without fuss then. I am surprised that did not happen, given that it is such a glaring difficulty. I urge the Minister to accept the Bill and amend it in whatever way is required so that we can deal with this issue as quickly as possible.

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