Leo Varadkar (Dublin West, Fine Gael)
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Question 669: To ask the Minister for Enterprise, Trade and Employment if he will amend the Companies Act 1990 to prevent developers from writing unfair terms in the memo and arts of residential management companies such as a provision allowing no annual general meeting to be held until all units are sold and clauses giving multiple votes or shareholdings to the developer; and if he will make a statement on the matter. [2227/08]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Government has approved the drafting, by the Office of the Parliamentary Counsel, of the Companies Consolidation and Reform Bill along the lines of the General Scheme prepared by the Company Law Review Group.

The General Scheme was designed to provide an appropriate framework for the formation and operation of companies and is framed primarily with private, commercially operating companies in mind. The underlying philosophy behind the proposals in the General Scheme is to simplify company law for the benefit of business operators and company law practitioners.

Recognising the role that company law could play in relation to property management companies, the Company Law Review Group consulted widely on its proposals and gave specific consideration to that aspect. As a result, the General Scheme contains a number of provisions with the express intention of facilitating the use of the company structure by multi-unit developments. For example, the membership limit of 99 which will ordinarily apply to the most common company type, the private company limited by shares, will not apply in the case of a residential management company. Also, the membership of a residential management company will be deemed to transfer from the vendor to the purchaser upon the sale of the underlying property to which the membership relates. These proposals represent very specific carve-outs from the general provisions concerning the standard private company limited by shares.

More generally in relation to multi-unit developments, a high-level interdepartmental committee, chaired by the Department of Justice, 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 this committee will be to identify the legislative and other actions to be taken in response to definitive recommendations for reforms which, following a lengthy consultation process, will be set out in the Law Reform Commission's forthcoming Report on Multi-Unit Developments, and to determine a timescale for their implementation. I understand that the Report will be published early this year.