Maria Corrigan (Fianna Fail)

I welcome the Minister of State and I appreciate the opportunity to contribute to the debate on the Multi-Unit Developments Bill 2009. As previous speakers indicated, the level of apartment and multi-unit development living has increased significantly in recent years, especially in Dublin and other areas. The Central Statistics Office estimates that more than 500,000 people — 10% of the total population — live in apartments. It is quite surprising that this number of citizens live in such accommodation. The Bill is timely, therefore, and it will address the concerns that are being raised by property owners and property management companies.

In the constituency in which I live, Dublin South, there are more than 41,000 private households occupied by almost 116,000 residents. According to the research carried out by the Oireachtas Library and Research Service, which was published in December 2008, people in Dublin South are more likely to live in apartments and 12% of them do.

A significant proportion of the queries I, as a public representative, receive from people who live in multi-unit developments relate to issues they have in respect of the management of their complexes or which have arisen with regard to their property management companies. I am fortunate that this year I have the assistance of an intern who is on placement from the masters course in DIT. With her help, I have been in a position to undertake qualitative and quantitative research among the residents of multi-unit developments in Dublin South. Some of the matters on which this research focuses include people's level of knowledge and awareness with regard to sinking funds, how much they pay in service charges and their levels of satisfaction with their property management companies. The issues that arose subsequently mainly revolved around the general upkeep of the grounds of particular developments, in addition to frustration regarding the level of influence developers had over multi-unit developments.

The concerns residents in Dublin South have raised echo the statements highlighted in the Law Reform Commission's reports on such developments which were published in 2006 and 2008, respectively. It is interesting that almost one third of the respondents indicated that they had very little or a poor understanding of property management companies and the way in which they operate. Almost 40% of these people, even those who live in one bedroom apartments, indicated that they pay more than €1,500 per year in management fees. In light of the fact that this is a considerable sum of money, the respondents expressed frustration and anger in circumstances where they felt the level of maintenance carried out was unsatisfactory. While I accept that service charges are calculated on the basis of a number of key factors, I am of the view that they must be justified in accordance with the type of amenities available at a development. Information relating to the latter should be published in an annual report to be published by property management agents. I therefore welcome the fact that the Bill recognises these important issues and the fact that the cost of service charges must be calculated on a fair basis.

Section 14 states that if 75% of the members of a development do not approve of a proposed service charge, then existing charges shall remain in place until the adoption of a new charge. This is a move which will be welcomed by owners. However, I suggest that it may be useful to set down criteria which must be satisfied to determine what is a valid charge. While it is positive that 75% of the members will be required to approve of a proposed service charge, it is essential that such charges must be realistic in nature. In the best interests of all of the property owners, there are certain costs which must be covered by the service charge. I am of the view, therefore, that it would be useful to outline criteria the charge must satisfy in order that it might be determined to be valid. For example, insurance and basic maintenance costs come into play in this regard. There are certain charges which, if they are not paid, will impact adversely on the overall value of a complex. As a result, those property owners who take a particular interest would be detrimentally affected. This matter has given rise to concern, especially in circumstances where developers maintain ownership of units.

Previous speakers inquired what will happen when certain owners do not pay service charges. It would be useful, perhaps, to have a less cumbersome process in place to be undertaken initially to try to collect payments. One of the issues owners are concerned about is where developers have maintained ownership of units and are experiencing cash flow difficulties. Where such owners of units do not make the service charge payments, there is a consequent knock-on effect for complexes and people want to know what will happen in such situations and how those charges will be recovered.

Section 14(2) addresses the issue of the general meeting. It would be useful to have a minimum quorum present for it to be a valid general meeting.

The establishment of an owners' management company is very useful but sometimes there is not the correct level of awareness of the responsibility entailed in becoming a member of such a company. It would be useful where people give voluntarily of their time to become directors that a mechanism be put in place to ensure they receive some level of education or information about such roles, because there are considerable legal responsibilities attached. One thing to emerge from feedback on the survey was that people tended to see the board of property management companies as being more or less in tandem with residents' associations, and of course that is not the case. There are completely different legal responsibilities involved.

There are a number of other issues I would like to have raised. However, the Cathaoirleach is indicating that there is no time. Perhaps I can take them up with the Minister of State outside the House.