Brian Hayes (Fine Gael)

I thank Senator Dardis and his colleagues for allowing us the opportunity to debate what is an extremely important issue, particularly in urban Ireland. It has become a major concern in new areas of Dublin. Ostensibly, it affects younger people who buy their first house and then find they must pay more than €1,000 per year, as Senator Morrissey stated, on this additional charge which other householders do not have to pay.

My view on this is straightforward. An argument can be made in favour of management fees for apartments. However, I recently visited my brother-in-law's apartment in Lisbon and was interested to discover that the owners or tenants from each of the ten apartments take turns each week to take responsibility for cleaning the stairwell and hall and ensuring that everything is fine. They do not pay a charge because they do the work themselves. In this country one has a tendency to foist responsibility on other people for where one lives. All over Europe, the practice for many years has been that people take responsibility for their own local environment.

However, no case can be made for management fees in houses or new developments. I do not know why people must pay substantial fees for looking after the local environment in a new home. I recently put down a straightforward question through a councillor in my local authority of South Dublin County Council seeking the number of administrative staff in the local authority as against the number of professional and cognitive staff working in areas such as cleaning roads, picking up litter and planning. The ratio was 4:1. That is the problem. As long as we have a scenario where more public works, such as sewerage, roads and the cleaning and maintenance of public open spaces are being done by fewer local authorities, there will be a problem where other parties will have to fill the gap. That is the issue. When local authorities tell me they have four times as many staff engaging with the public, doing what the public wants them to do, as those who manage and administer, I will believe we are putting in place a good system.

The Minister has stated that when it comes to planning conditions, there is a new practice where a manager will stitch into planning conditions the need for a management company. Councillors have no say in that regard. The councillors cannot have a say where an application goes before a manager and he or she inserts the establishment of a management company for a development as a specific condition. The councillors may be against it, but the managers are using this to attempt to bleed more money from prospective home owners.

The Government cannot have it every way. It is getting approximately 25% in tax and VAT through the sale of all new homes anyway. The council gets a specific development levy on every sale within a housing estate. A large sum of money is going to central and local government, and the local authorities are making this a condition of a significant number of new housing estates. Blaming local authority members is not good enough, when one considers it is the manager's function to stitch in specific conditions. If he or she is putting in such conditions, it is not a fault of the county councillors in that area.

My party has put forward a suggestion, as the Minister will know, that a new function should be given to the Private Residential Tenancies Board, which has been established and is working well. It could, in effect, become a national regulator to bring about some type of standard in this area.

There are three factors we should bring about to put in place a code of practice. We should immediately establish in law or through a regulation involving the Private Residential Tenancies Board, that there should be no annual increase in an annual fee for at least three or five years when a development is taken over. This would be a moratorium.

The management fee should not be fully paid until management agents are in place and various services can be provided. Many builders demand payment of the first year's management fee before the keys are handed over. That is a new practice. A person may buy a house in August and there is a demand within a month for the entire year's management fee, even though the person has not been living there for more than half of the year. The only way this practice will stop is through a code of practice, which the builders sign up to, or new legislation demanding that this comes about. We need the legislation either way.

A suggestion has been outlined by Deputy O'Dowd of my party that a sinking fund be provided, which would be available from the outset for the householders. Under current legislation, if half of the householders in a development come together and want to ditch the management company, they can do so. There should be a sinking fund in place from the outset whereby the community itself can decide what to spend money on. The fund should be made up of the amount left over from the development, with a significant amount paid by the developer once the management company is established. That is the way to go.

I reiterate my total opposition to the establishment of management companies for ordinary domestic houses. Whatever the argument for apartments — it may be a good argument in this case — there is no argument for such companies with regard to houses built within new communities. People feel it is another type of stealth tax, whether it is paid to management companies or local authorities.

There is an opportunity for the Government to respond imaginatively to some of the suggestions. We have put forward our views, and if there are better views on the establishment of a code of practice and giving a new authority new powers, we should have them. This issue will not go away until new legislation is implemented in this area which will give greater control to local authorities and their members, who could do more in this area.