Seanad debates

Wednesday, 15 November 2006

7:00 pm

Tom Morrissey (Progressive Democrats)
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I thank the Minister of State for taking this matter. The concept of management companies is in dire need of reform and regulation because hundreds of thousands of euro is being collected from householders who have moved into apartment complexes and mixed housing developments. However, there is no transparency in the collection and expenditure of this money and the bank accounts in which it is held. I held public meetings in Lusk and Balbriggan in north County Dublin and the information I gathered indicates that a number of management companies can only be contacted through a mobile number which, more often that not, is out of service. In a number of instances, management companies are not even registered with the Companies Registration Office. They are flying in the face of their legal corporate governance responsibilities.

During a debate in the House last May, the Minister for the Environment, Heritage and Local Government addressed this issue and whether such companies are acceptable on housing estates. I accept they are needed in apartment complexes that have common areas such as lifts, stairwells and hallways but people residing on traditional housing estates cannot see the need for them. Some 500,000 people, 12% of the population, live in apartment complexes with management companies, but the area is not regulated.

A further bone of contention is whether this practice is legal. Will the Government be landed with a bill of unforeseen magnitude and do councils have a legitimate right to impose a planning condition that they cannot enforce? Normally, a condition in a planning permission is enforceable, for example, landscaping for trees, open spaces and so on. In this situation, councils are imposing the condition of a management company and are then walking away and saying that the estates are no longer their responsibilities. However, a planning permission should be enforceable by the authority that grants it.

If a test case were taken, local authorities could be held liable in respect of management companies in conventional estates where people have own-door keys, that is, they do not share hall doors or common spaces. It is wrong that people are forced to pay for public liability insurance and public lighting, that the estates are not taken in charge by councils and that people are left with the long-term responsibility of establishing sinking funds in their communities for roads, open spaces and all other areas over which councils have traditionally had responsibility because they claim that these are privately managed estates.

A ridiculous situation has developed. In Dublin, someone living in a €5 million house could pay no charges for the upkeep of his or her estate because it is taken in charge in terms of public lighting, maintenance, grass cutting and so on in the normal way. Young couples on the affordable housing list in Fingal, people on lower incomes by the very nature of being on the list, are told when they sign their mortgages, which they get with the assistance of the council, that the estate is managed and that they must supply a cheque for €500 on day one and a cheque for €800 or €1,000 next year. This situation is ironic, outlandish and needs regulation. In the first instance, the Minister must instruct local authorities that they must desist from including such conditions in planning permissions.

Photo of Batt O'KeeffeBatt O'Keeffe (Minister of State with special responsibility for Housing, Urban Renewal and Developing Areas, Department of Environment, Heritage and Local Government; Cork South Central, Fianna Fail)
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I welcome the opportunity to address the House on this matter and I thank Senator Morrissey for raising it. As Senators are aware, it was traditional for management companies to operate for apartment developments because it was necessary to have arrangements in place for the upkeep and maintenance of buildings and shared private areas in such developments.

Section 34 of the Planning and Development Act 2000 recognised the practice of establishing management companies by allowing a planning authority to attach conditions to a planning permission for the maintenance or management of the proposed development. In early 2006, my Department carried out a survey of planning authorities in response to complaints that they had inappropriately extended the practice of placing the condition of management companies on traditional housing estates. In response, the authorities indicated that they did not generally do so.

My Department subsequently made it plain to planning authorities that conditions requiring management companies should not be attached to planning permissions for traditional housing estates, that is, estates of houses with individual private gardens, except in very specific circumstances, for example, if a particular service or facility is provided for residents' use only, such as a playground. In January 2006, my Department reminded planning authorities of their responsibilities under the Act in respect of the taking in charge of roads, footpaths, sewerage, etc. in such estates.

Many of the residential estates being built are the newer type of high-density estate containing a mix of apartments, duplex houses and other terraced houses, with shared open spaces instead of traditional gardens. Frequently, these estates contain features such as high-maintenance landscaping and shrubberies, open spaces where interlocking cobbled treatment is used and small playgrounds that would have been intended for residents' use only.

Roads, footpaths, public lighting and sewerage should always be taken in charge by the local authority. However, Senators will acknowledge that some further consideration must be given to whether it is appropriate that all shared areas in high-density estates should be taken in charge and maintained at public expense. It may be that it is appropriate that some of these facilities should be maintained by the residents themselves.

Accordingly, the Department established a working group in August 2006 that is representative of the Department, local authorities, architects, planners and consumer interests. The group is considering the question of responsibility for the maintenance of various common shared facilities in residential estates, including small landscaped open spaces, car parking and playgrounds. The group is also considering the issues around completion of estates and the taking-in-charge process having regard to the statutory requirements under section 180 of the Act. The remit of the group is to develop clear policy advice for planning authorities.

Planning authorities have been advised that pending the outcome of the work of the working group, they should only attach planning conditions in respect of the ongoing management of shared facilities in circumstances where they judge that those are clearly required for the benefit of residents. These circumstances could include apartment blocks, gated communities or where a specific service or facility is provided for residents' use only, such as a private playground. It is intended to issue guidance to planning authorities by early 2007 at the latest.

Tom Morrissey (Progressive Democrats)
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I thank the Minister of State for his considered reply. However, while the Minister of State has suggested what will be done, there must be a discussion on the issues created by practices that have developed in the past three or four years.

Photo of Batt O'KeeffeBatt O'Keeffe (Minister of State with special responsibility for Housing, Urban Renewal and Developing Areas, Department of Environment, Heritage and Local Government; Cork South Central, Fianna Fail)
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It is accepted that difficulties have arisen. Based on the advice of the working group, we will examine what can be achieved in respect of past happenings.