Report on Multi-Unit Developments - Law Reform Commission

6.40 The calculation and apportionment of service charge and building
investment fund contributions were recurring themes in the submissions
received by the Commission following the publication of the Consultation Paper.
The question of apportionment is especially relevant where a development
contains units of varying sizes. The provision of a statutory guide as to which
aspects of the development‘s expenses should be covered by service charges
and building investment fund monies is also open to debate.
6.41 The Irish Property and Facility Management Association (IPFMA) has
noted that there is currently no information template for owners‘ management
companies as to how fund costs should be calculated and explaining for which
expenses the fund should cover. 36 It is important to note also that the developer
initially, and after that, the owners‘ management company hold primary
responsibility in keeping all unit owners informed of all relevant information
relating to developments‘ building investment funds. The Commission agrees
with the view of the IPFMA that there is an urgent need for best practice
guidelines to be produced in this context in Ireland. The National Property
Services Regulatory Authority would be the best-placed body to prepare and
publish these guidelines. This is because, as the body responsible for licensing
and regulation of managing agents, it will have available expertise in this area
and this function is already envisaged in the 2006 General Scheme of the
Property Services Regulatory Authority Bill. 37 The Commission accordingly
recommends that a study be undertaken by the National Property Services
Regulatory Authority in order to devise best practice guidelines as to how
building investment fund costs should be calculated.
6.42 The Commission recommends that a study be undertaken by the
National Property Services Regulatory Authority in order to devise best practice
guidelines as to how building investment fund costs should be calculated.
(4) Existing Developments
6.43 For existing developments; the question of whether to require a
building investment fund is more complicated. The current problem posed by
36
See further the recommendations at paragraphs 6.60 and 6.66 below.
37
Head 9 of the General Scheme states that the NPSRA shall ―(f) to such extent
and in such manner as it considers appropriate, disseminate information in
relation to such standards, qualifications and requirements; (g) take such action
as it considers appropriate to increase public awareness of property services and
the cost to consumers of such services (including management companies) as
well as the risks and benefits associated with the provision of those services; (h)
undertake or commission, or collaborate or assist in, research projects and other
activities relating to property services in order to promote and improve standards
for the provision of those services and public awareness of them.‖
147