Pat Rabbitte (Dublin South West, Labour)
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Question 94: To ask the Minister for Justice, Equality and Law Reform when he will publish the promised Property Services Regulatory Authority Bill; if the Bill will include provisions to regulate the operation of management companies; and if he will make a statement on the matter. [22756/07]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is important at the outset to distinguish between the respective roles and functions of property management companies and property management agents. Property management agents undertake property-related services under contract for the property management companies which comprise the residents in multi-unit developments. Since they provide property services, property management agents, together with auctioneers and estate agents, will be covered by the licensing system to be operated by the new regulatory authority that is to be established under the Property Services Regulatory Authority Bill. The Government's legislative programme, published on 25 September, provides for publication of this legislation early in 2008.

Pending enactment of the legislation, an implementation group has been established to assist and advise on practical matters relating to the new authority and to prepare for the new licensing system. The current licensing system in the District Court will be transferred to the new authority. A chief executive designate has been appointed and is engaged in preparatory work for the establishment of the new regulatory structure.

Property management companies, on the other hand, are legal entities incorporated under company law and are subject to its provisions. In December last, the Law Reform Commission of Ireland published a consultation paper on multi-unit developments which drew attention to a broad range of issues arising in respect of the governance and operation of such developments, including problems arising from the manner in which company law currently applies to property management companies. The paper makes it clear that action to address these problems will be required across several policy fields, including company law, consumer protection law and the development of regulatory structures for the companies. In recognition of the cross-cutting nature of the issues identified by the Law Reform Commission in its paper, a high level interdepartmental committee has been established to assist in the development of a coherent and comprehensive response to the problems arising in this area. A key task of the committee will be to identify the legislative and administrative actions that will be taken in response to the definitive recommendations for legislative reform which, following a lengthy consultation process, will be set out in the Law Reform Commission's forthcoming report on multi-unit developments. I expect that the report will be published later this year. I am anxious to make progress with the legislation that will establish an authority to regulate the auctioneers and agents and make some associated changes to regulate the multi-unit development companies.

Pat Rabbitte (Dublin South West, Labour)
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This issue was being raised in the House, on behalf of thousands of predominantly young people, for two years in advance of the recent general election. Such people are experiencing problems with property companies and their agents which they could not have envisaged. Many of them are contractually wedded to such companies, often without having known in advance that they would be. These companies sometimes arbitrarily increase the fees they charge for services which are often illusory. Is the Minister saying that the Government, notwithstanding the commitment given by the Taoiseach more than 18 months before the general election, is still examining legislative proposals that might afford some protection to the owners of apartments etc., who find themselves in these circumstances? Is the Minister merely proposing to transfer the current licensing system to the new regulatory authority? Is he saying that a broader change is still being examined by the high-level group and is likely to take a considerable amount of time? While I appreciate the distinction the Minister is drawing between management property companies and their agents, I am not sure that young people with mortgages — who are up to their eyes in debt and are getting the run-around from such companies and their agents — will share his sympathy for that distinction. When a young property owner contacts a developer, he or she is usually told to contact the local authority, which refers him or her to the management company, which then refers him or her to the management agent. Young people are being sent back and forth from Billy to Jack without being given much relief from the conditions which oppress them.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I can give the Deputy more assurance than he realises. I drew attention to the distinction between the agents and the companies because separate legislation is required to deal with each of those categories. In respect of agents, the legislation is not restricted simply to transferring the jurisdiction of the District Court to the new authority. The forthcoming legislation will go far beyond that — it is intended that it will regulate not only auctioneers but also the agents which provide the services for the property management companies. At the heart of the legislation that is being drafted is a desire to ensure that codes of practice, qualifications and proper standards are observed by agents. The authority that will operate the legislation has been established on a shadow and provisional basis, pending the enactment of the legislation. That is the position with regard to the agents. I am sure Deputy Rabbitte, on foot of his examination of the working paper that was produced by the Law Reform Commission, is familiar with the complex questions which arose in respect of the companies. The issues raised in the working paper are not simply matters of strict company law — they also concern consumer law and other branches of the law. It is intended to deal with those issues comprehensively when the LRC's report has been received. The interdepartmental committee was established to ensure that the issues being examined by the LRC, which will be reported on before the end of this year, can be dealt with in an expeditious way after the report has been published.

Pat Rabbitte (Dublin South West, Labour)
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When is it proposed that legislation will be enacted to give a statutory basis to the shadow authority which has been established? Does the Minister accept that significant abuses are affecting thousands of young people?

Some of these property management companies operate as intended for a defined set of services but many of them do not. Many of them are front companies for the developer and they are up to every trick in the book. They know the local authority will not take the estate into charge until it is completed. They will retain a unit in the development so as to forestall other elements of company law that would normally give the residents the ability to direct the affairs of a management property company so that they would have some say in critical decisions.

I ask the Minister to be more precise in his answer to the House as to when these proposals are likely to come before the House.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The legislation in respect of agents and auctioneers will be published early next year. I propose to proceed with that legislation with dispatch.

I agree with Deputy Rabbitte that there have been abuses in this area. There has been a lack of regulation of the agents who provide the services and the traditional model of company law which applies to these companies is not appropriate to the companies that have been established on such a large scale in many new developments.

Some element of management company or management system is desirable in multi-unit developments in order to ensure that common services are properly maintained.