Written answers

Wednesday, 12 May 2021

Department of Justice and Equality

Housing Issues

Photo of Jim O'CallaghanJim O'Callaghan (Dublin Bay South, Fianna Fail)
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193. To ask the Tánaiste and Minister for Justice and Equality the steps that can be taken to prevent management companies from imposing significant increases in management fees on residents; and if she will make a statement on the matter. [24822/21]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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The Multi-Unit Developments Act 2011 was enacted with the primary purposes of reforming the law relating to the ownership and management of common areas of multi-unit developments and facilitating the fair, efficient and effective management of owners' management companies (OMCs). These are companies registered under the Companies Acts, the members of which are the owners of residential units within the development, which are established for the purposes of ownership and management of such common areas.

In relation to annual service charges, it is a matter for each individual OMC to determine the amount of the service charge on an annual basis. Section 18 of the Act requires OMCs to establish and maintain a scheme of annual service charges from which they may discharge expenditure incurred on the provision of common or shared services to the owners and occupiers of residential units in the development, including insurance, waste management and security services. The Act sets out clearly that the service charge must be calculated on a transparent basis, and be equitably apportioned between the residential unit owners. In order to ensure transparency and accountability, both the annual service charge and the services to be provided must be approved by a general meeting of the members of the OMC.

Section 24 of the Act contains provisions for the resolution of disputes relating to multi-unit developments. It provides that a person, including any member of an OMC, may apply to the Circuit Court for an Order to enforce any rights conferred or obligations imposed by the Act. The Court, if satisfied that a right has been infringed or an obligation has not been discharged, may make such remedial order as it deems appropriate in the circumstances with a view to ensuring the effective enforcement of the right or the effective discharge of the obligation. The Act also contains provisions which encourage the resolution of disputes that may arise between parties by means of mediation rather than recourse to court proceedings.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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194. To ask the Tánaiste and Minister for Justice and Equality if it will be ensured that buyers and prospective buyers who have paid their deposit and signed contracts for houses at Mullen Park, Maynooth, County Kildare are not affected or impeded by investment companies who might seek to increase the price of the houses by various means; if it will be ensured that those seeking to provide a home for themselves can expect to have their rights vindicated; and if she will make a statement on the matter. [25029/21]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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A “Contract of sale” for those buying and selling a property specifies exactly what is being sold and the terms and conditions of a sale. A contract, once signed by both parties, binds the parties to the completion of the transaction. Disputes regarding contracts are a matter for the law and the courts.

“Gazumping” occurs where there has been an oral pre-contractagreement between a buyer and a seller, including the payment of an initial “booking deposit”, for the sale of property at a particular price and, subsequently, the sellereither:

- Refuses to execute a formal contract of sale to the buyer in question and sells to someone else for a higher price; or

- Refuses to execute a formal contract of sale to the buyer in question unless the buyer agrees to pay a higher price.

The non-enforceable relationship between the original parties is preserved by use of the term "subject to contract".

The problems associated with gazumping were examined in detail by the Law Reform Commission in its 1999 "Report on Gazumping" (LRC 59-1999). The Commission noted that delays arising between the conclusion of negotiations and completion of the formal contract were usually for the benefit of the intending purchaser, for example, to ensure the availability of funding for that property, or to ascertain if there were any legal difficulties in relation to the title. The Commission concluded that the only practicable reforms were to improve the information available to intending purchasers and to regulate the terms according to which booking deposits are paid and accepted. It did not recommend any specific legislative reforms to the legal framework within which gazumping occurs.

There are no plans at present to introduce or amend legislation in this area. However, as with other policy and legislative reforms, interested parties are welcome to make submissions on this matter.

The Property Services Regulatory Authority, which was established under the Property Services (Regulation) Act 2011, published a detailed “Guide for Users of Property Services Providers in Ireland" which explains the legal position in relation to gazumping and related matters such as payment of deposits and signing of contracts. The Guide is available on the Authority's website at: www.psr.ie.

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