Charles Flanagan (Laois, Fine Gael) | Oireachtas source

Let me rephrase. I strongly support the Bill and am very keen to work with Deputy Darragh O'Brien to improve it. As drafted, the Bill requires a fair degree of analysis to ensure that it can be effective in achieving its aims. In this context, the policy experts in my Department have identified a number of legal and practical difficulties that will necessitate detailed consultation with the Office of the Attorney General and the Office of the Parliamentary Counsel. In particular, I am anxious to reduce as far as possible the risk of legal challenge to the imposition of functions on the Property Services Regulatory Authority that are unrelated to its current licensing function and the operation of its redress mechanisms. For that reason, I propose a six-month delay to permit my officials and me to engage with Deputy Darragh O'Brien on the detail of the Bill's provisions. The delay is for no other reason than that. I acknowledge the Deputy's goodwill regarding my suggestion. He and I enjoyed a previous working relationship in our respective roles in respect of the foreign affairs and trade portfolio and I am confident that we can work together to achieve a positive outcome.

The House will recall that statutory provisions relating to multi-unit developments are set out in the Multi-Unit Developments Act 2011. The 2011 contains provisions relating to the ownership and management of the common areas of such developments as well as a number of supplementary measures relating to management structures and dispute resolution.

This Act imposes an obligation on developers to establish an OMC in respect of a multi-unit development prior to the sale of the first residential unit in the development. It means that the purchaser of an apartment in such a development acquires a long lease on the residential unit and, in addition, he or she becomes a member of the OMC which owns the common areas of the development. On the sale of an apartment, membership of the OMC transfers automatically to the purchaser of the unit concerned.

The OMC model of ownership of common areas of a multi-unit development is based on the recommendations of a Law Reform Commission report published in 2008 titled "Multi-Unit Developments". Publication of the Law Reform Commission recommendations was based on a lengthy consultation process during which all relevant stakeholders had the opportunity to make submissions. At that time, the Law Reform Commission did not recommend a specific oversight and enforcement mechanism for OMCs because such companies are subject to company law provisions, including their own memorandum of association, and are subject to oversight by the Company Registration Office and the Office of the Director of Corporate Enforcement.

The Law Reform Commission also pointed out that the then Consumer Protection Authority, now incorporated into the Competition and Consumer Protection Commission, had an important role to play in providing information and advice to intending purchasers of residential units in multi-unit developments. This is a real issue and I listened closely to what Deputy Darragh O'Brien said on the practical problems and challenges that arise on a day-to-day basis. I see these in my constituency office, for example, and saw them during the roll-out of many of these schemes. It is fair to say that they were organically rolled out in the context of Celtic tiger development. I engaged as a solicitor on some conveyancing issues and I acknowledge that there are still some practical issues to be resolved. Many of these arise from a lack of information and understanding and perhaps even a lack of appropriate training. It is extremely important in the context of further developments that we work on many of the problems identified by Deputy Darragh O'Brien. They are not unique and particular to the Dublin Bay North constituency and are very much evident in Kildare, as they are in my constituency of Laois-Offaly.

The 2011 Act acknowledges the risk of disputes arising in the enforcement of rights and the performance of obligations imposed by its provisions and makes provision for the resolution of such disputes in sections 24 to 28 of the Act. While the Act does not contain specific provisions in relation to mediation, it clearly encourages and supports the resolution of disputes by means of mediation by requiring any party intending to launch legal proceedings to state whether mediation or another dispute resolution process has been attempted in order to resolve the dispute. This is required under section 24(2), while section 27 provides that the court may, of its own motion or at the request of one of the parties, direct the parties to engage in a mediation conference in order to resolve their dispute. The Mediation Act 2017, which entered into force on 1 January 2018, has supplemented these specific mediation promoting provisions in the Multi-Unit Developments Act 2011. This Act seeks to promote and facilitate the settlement of disputes by mediation as an alternative to potentially costly and possibly lengthy legal proceedings.

For all of these reasons, I very much welcome the proposals made by Deputy Darragh O’Brien in his Bill, which seek to promote mediation as a means of resolving disputes relating to OMCs. The proposals in the Bill are entirely in line with the general approach of successive Governments to dealing with this issue.

At this point, I will briefly turn to some of the legal and practical issues that arise in the Bill as drafted, which will require detailed consultations with the Office of the Attorney General. I pledge to keep in close contact with Deputy O'Brien as matters develop. The role of the Property Services Regulatory Authority is to operate a licensing system for auctioneers, estate agents and property management agents, and to investigate complaints in the provision by them of property services. It does not have a role in relation to OMCs. Where complaints are upheld by the authority, it may impose appropriate sanctions, which range from revocation or suspension of licences in the case of serious infringements to the issuing of cautions or reprimands in the case of less serious breaches. It does not operate a mediation service in respect of any of the property services that it controls and supervises. The authority comprises of not more than 11 members who hold office on a part-time basis.

Section 19 of the Property Services (Regulation) Act 2011, which was enacted in the same year as the Multi-Unit Developments Act, provides for the appointment of a chief executive to implement the policies and decisions of the authority and to manage and control the authority’s staff, administration and business. In other words, there is a clear distinction drawn between the role of the part-time authority members and the functions of the professional staff, including the chief executive officer. This is the standard structure for public authorities of this kind.

At the heart of Deputy O'Brien’s Bill is the proposal in section 3 to establish a new statutory office of ombudsman for management owner companies and to locate that office in the Property Services Regulatory Authority. This raises a number of questions. Apart from the appointment of such a person as an authority member, it is unclear how the appointee would function within the authority structure or whether staff, including the chief executive, would have any role in discharging the proposed ombudsman's functions. This will need to be teased out. A further issue arises regarding the authority’s self-funding model based on licence fee income. Under section 25 of the Act, the authority is required to recover fees for the performance of functions and the provision of its services. This means that the ombudsman would be required to charge fees for his or her services. Otherwise, there would be a risk that the allocation of funding derived from licence fees towards the provision of services unrelated to the control and supervision of property services could result in legal challenges by licensees. Both of these matters, namely, the proposed role of the ombudsman within the authority and future funding arrangements, will necessitate, therefore, detailed consultations with the Office of the Attorney General. I will be happy to discuss these issues further with the Deputy once I have received these advices.

Insofar as specific functions of an ombudsman are concerned, it will also be important to avoid, as far as possible, overlap with or, more seriously, conflict with the functions of and services provided by other statutory bodies. For example, the Office of the Director of Corporate Enforcement has an important statutory duty to promote compliance with the Companies Acts and to bring those who flout company law provisions firmly to account. In like manner, the Competition and Consumer Protection Commission, in the exercise of its important consumer protection function, provides important information and guidance on OMCs on its website, including useful materials on service charges, sinking fund and the role of the developer, property management agents and house rules, all of which are subject to some challenge at present in respect of information, role, function and, more important, as Deputy O'Brien correctly stated, action to provide solutions.

I know Deputy O’Brien will be familiar with positive changes by the Residential Tenancies Board which now operates as a fast-track dispute resolution service based on telephone mediation. This is a free service designed to resolve disputes between tenants and landlords who have an issue with their tenancy. The process is not based on examining evidence or determining who is right or wrong but, rather, focuses on how parties can resolve their dispute by engaging together.

Section 1 seeks to make provision for proxy voting in OMCs. However, I understand that section 183 of the Companies Act 2014 may already deal with that matter. Section 183(1) of the 2014 Act provides that any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person, whether a member or not, as his or her proxy to attend and vote instead of him or her. In that context, there would not appear to be a need for this provision.

Before concluding, I again thank Deputy O’Brien for tabling this Bill. It is very important that the House consider these issues. I also listened closely to what Deputy Ó Snodaigh had to say and I welcome his contribution. I will be happy to deal with some of the issues raised by the Deputy and I will continue to so do in the context of the progression of this legislation.

As I indicated, I am broadly supportive of the aims and objectives of the Bill, especially its focus on promoting the resolution of disputes by means of mediation. However, as the Deputy will understand and appreciate, certain proposals in the Bill require deeper analysis and consideration, in particular the positioning of the ombudsman function within the membership of the Property Services Regulatory Authority as well as the future funding needs. For this reason, I have tabled a motion today to delay Second Stage of the Bill for a period of six months. This will allow me and officials in my Department to consult Deputy O’Brien to find a way forward. This timeframe will also allow necessary consultations with the Office of the Attorney General to take place. My office has already been in touch with Deputy O’Brien and I acknowledge what he said in that regard. It is my intention that we will be in a position to make early progress on these issues.

It only remains for me to move amendment No. 1.

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