Eugene Regan (Fine Gael)

I thank the Minister for his comprehensive introduction of the Bill. This is welcome and is very much needed. In many ways, it is long overdue. Major problems existed for apartment owners when they could not get ownership of the development from the original developer. Unfair and often exorbitant service charges were imposed and, in many cases, owners were unaware of the basis by which service charges were calculated. The problems created were tolerated and there was a lack of transparency and awareness. The lack of regulation exacerbated this problem.

The Bill is designed to address a number of problems faced by apartment owners, such as how the complex is maintained and funded. It reflects a number of policy ideas proposed by Fine Gael in its policy document, A Fairer Deal for Modern Living, published in May 2008. In general the Bill is welcome and is well drafted in broad measure.

More than 60% of new residential dwelling units built in Dublin are apartments. The nationwide figure is 25%. We should not have had to wait until there was such extensive apartment dwelling and ownership before introducing this legislation. There have been many calls for regulation of this sector and it is extraordinary it has taken so long for it to be introduced. More than 500,000 people live in multi-unit developments. Between 50,000 and 100,000 people live in traditional houses in mixed developments which are the subject of management charges in many cases. That is an issue not addressed in the Bill. Why is it not addressed? It could be accommodated in this legislation and it would be appropriate to do so. A total of 4,600 management companies are registered with the Companies Registration Office and 400 individuals or companies offer property management services. In many cases the latter are unlicensed and unregulated. Combined with the Bill recently introduced by the Minister, the Property Services (Regulation) Bill, and other legislation governing this complex area that involves planning law, land law, conveyancing law and landlord and tenant law, this Bill fits the complex of legislation and ties up many loose ends in property ownership. There are a multitude of problems and some have been outlined by the Minister. These include cases where the management company remains controlled by the developer, services are poor, fees are not paid, the title to common areas is not handed over to the management company, there is no sinking fund to ensure the long-term maintenance and management companies going into debt or being struck off the companies register, leaving the residential units unprotected, uninsured and difficult to sell in many cases. There is also the issue of mixed developments, which I have mentioned. Where there are gated communities, these problems tend not to arise but where there are mixed developments of apartments and normal residential dwellings, we must find an accommodation within this legislation for management companies.

A number of features of the Bill have been outlined by the Minister and they are welcome. These include the designation of owner management companies, the provision whereby apartments in new developments cannot be sold unless an owners' management company has been established at the expense of the developer, the obligation on the developer to transfer ownership of the common area and that the transfer of same does not relieve the developer of his responsibilities in the completion of the development. There is also the issue of voting rights at annual general meetings, the provision for service charges to be approved at general meetings and the basis upon which they are to be calculated, along with the services they cover. The provision for a sinking fund, house rules and so on are all very necessary and welcome.

There is a dispute resolution system proposed in the Bill, where there is recourse to the courts — particularly the Circuit Court — and this is a puzzling aspect. In the recent Property Services (Regulation) Bill, we have a different system to regulate that sector and it seems incongruous that in this case we do not have recourse to the national property services regulatory authority. That body could play a role in resolving many of the disputes that arise in the area and if there are concerns regarding title and so on, they would have to be adjudicated upon by the courts. It does not seem congruous to have a different system of dealing with issues and problems arising under the legislation as opposed to the Property Services (Regulation) Bill.

There is a provision for an extended period during which a company may be restored to the companies register and where the contract restrictions controlling owners and management companies entering into long-term contracts with providers of goods and services would not extend beyond three years. All those features are to be welcomed.

The questions I have relate to the mixed developments and why these cannot be accommodated within this legislation. With regard to the system of resolving disputes, why can the national property services regulatory authority not play a role? I know the Minister has been facilitated by the very comprehensive reports of the Law Reform Commission in this area, and particularly by the draft Bill from the commission. Many features of that draft Bill were very appropriate and I can see certain deviations from the draft in this legislation. I have a number of questions on that.

I do not want to go into the detail of the draft Bill from the Law Reform Commission. We are less than emphatic about the responsibilities in section 2, where there is reference to "a person to whom this section applies". The Law Reform Commission Bill expressly states the responsibilities of the developer and I do not understand why we go about identifying those responsibilities in this circuitous route. There is a definition of completion of a development in the Law Reform Commission Bill, which refers to certification by a professional person. There is no definition in this Bill of substantial completion and it is important that the term, as used in section 4, is defined.

The Law Reform Commission recommends the inclusion of several rules in the articles of association of owner management companies, which are not included in this Bill. The commission also recommends a proxy for owners at management committee meetings but this recommendation has not been followed. Why is that? The commission wanted the annual directors' report to include a declaration that the development is fully compliant with fire and safety legislation, and the Bill merely requires that the annual report include whether a fire safety certificate has been issued.

The Law Reform Commission report also recommends that units could not be sold in a development where a management committee had not filed returns to the previous 24 months. It would seem that this could be a welcome inclusion in the Bill and the commission's Bill excludes management agencies from carrying out the function of company secretary of an owners' management company. I do not see that reflected in the Bill. The commission also recommended that a unit owner needs to seek permission of the board of directors of the owners' management company before making any external or structural alteration to the unit owner's unit. This does not appear to be contained in the Bill.

These specific questions can be dealt with on Committee Stage and there may be a very good reason they are not included. I welcome the Bill, which will receive the support of this side of the House, although we will put down amendments. I compliment those bodies which have played a big role in researching this issue. The Law Reform Commission's consultation paper and report have been excellent. The National Consumer Agency produced a report on management fees and service charges levied on owners of property in multi-unit dwellings, which is very important in this regard. The Irish Property and Facility Management Association did a position paper in June 2008 and the Office of Director of Corporate Enforcement produced a property owners' guide to company law. There was also a report from the auctioneer and estate agent review group from 2005.

All these reports contributed to a very thorough examination of the entire area and grounded the basis for this Bill very well. I welcome the legislation and thank the Minister for attending the House.