Report on Multi-Unit Developments - Law Reform Commission

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older multi-unit developments which have not yet established a building investment fund with which to cover costs is one of growing seriousness. It is clear that it will take some time before existing older developments have accumulated a building investment fund which is adequate to cover their prospective capital expenses. However, the Commission recognises that the fact of establishment of the fund in itself constitutes some progress in protecting the longer-term value of the original investment. 6.44 Questions might be raised as to the extent to which the State should dictate how an individual‘s private property should be managed, and whether a mandatory requirement applicable to existing developments could constitute an interference with the individual‘s constitutional right to private property. 38 The Commission notes that there are a number of instances where the exigencies of the common good result in necessary conditions being attached to private property ownership. For example, owners of buildings which are subject to preservation orders are limited in the changes they can make to their own private property. 39 Indeed, the requirement of planning permission before construction can take place is an example of how the right to private property is not absolute. 40 6.45 Similarly, compulsory purchase orders and demolition orders are often made by the State over private property on public policy grounds. In short, all property owners have obligations as well as rights over their private property. The Commission considers that to enable sustainability of apartments as a viable form of housing for a large segment of the population, the requirement that unit owners in existing developments pay into a building investment fund is necessary. It can also be argued that, given the interdependent nature of multiunit development living, by paying into a building investment fund, the unit owner is helping to vindicate the property rights of the other unit owners of the development by enabling them to maintain the structure and value of the property which they own jointly. 6.46 Accordingly, the Commission considers that notwithstanding this limitation on the unit owners‘ exercise of control over their own private property, 38 This right is guaranteed by Article 43 of the Constitution and under Protocol 1, Article 1, of the Council of Europe‘s Convention on Human Rights and Fundamental Freedoms (1950). See generally: Hogan and Whyte, JM Kelly: The Irish Constitution, 4th ed. (Lexis Nexis, Dublin 2003). 39 As governed by Part IV of the Planning and Development Act 2000. 40 See the conclusions reached by Kenny J on the nature of constitutional property rights in Central Dublin Development Association v Attorney General (1969) 109 ILTR 69, 86. 148
common good and public policy considerations necessarily outweigh this and has concluded that the establishment of a building investment fund for existing developments should also be mandatory. Such a condition of ownership is implicit in the interdependent nature of ownership in a multi-unit development. 6.47 In order to meet the difficulties which this requirement imposes on existing developments the Commission also recommends that a transitional period of 5 years should apply before this would come into effect for existing developments. The Commission recommends that, once the 5 year transitional period has passed, any conveyance for a multi-unit development which does not have a building investment fund will be regarded as void. 41 The Commission recommends that it be statutorily provided for that it will be unlawful to contract out of any provision relating to the necessity for the existence of a building investment fund in the finalisation of the sale of a unit. 6.48 The Commission recommends that existing large multi-unit developments, that is which involve 5 units or more, must establish a building investment fund within 5 years. 6.49 The Commission recommends that any conveyance which purports to contract out of the requirement to establish a building investment fund shall be void. 6.50 One policy issue which the Commission envisages arising is the additional expense incurred by some individuals in contributing to the building investment fund. The level of additional expense may be particularly onerous for people who have invested in affordable housing, who may neither have anticipated nor be able to afford building investment fund contributions which are beyond their means. While the Commission considers that the potential for consideration of individual subsidies or tax relief for such unit owners in this context may be relevant, it makes no recommendation on this because it is a policy matter. The Commission merely comments that such consideration would arguably reduce the financial hardship which affordable housing unit owners would incur as a result of the introduction of a mandatory building investment fund. C Multi-Unit Development Service Charges 6.51 As noted in the introduction to this <strong>Report</strong>, service charges involve a contentious element of the running of multi-unit developments in the postcompletion phase. 41 This statutory requirement will necessitate the insertion of a new requisition on title in the Law Society‘s Objections and Requisitions on Title that there is a building investment fund in existence. 149
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MULTI-UNIT DEVELOPMENTS (LRC 90 - 2
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LAW REFORM COMMISSION‘S ROLE The
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LAW REFORM RESEARCH STAFF Director
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CONTACT DETAILS Further information
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National Association of Building Co
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TABLE OF CONTENTS INTRODUCTION 1 CH
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D (9) Reports, Acc
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TABLE OF LEGISLATION Building Contr
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TABLE OF CASES AWA Ltd. v. Daniels
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B This Report and
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this makes it difficult to sell the
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Draft Sustainable Residential Devel
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freehold basis. 22 In 2005, as part
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managing agent and the owners‘ ma
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currently a wealth of expertise ava
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39. The Commission is conscious tha
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CHAPTER 1 SUSTAINABILITY OF MULTI-U
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1.03 This Chapter aims to consider
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comment, the Commission noted that
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has published guidelines for new ho
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Environment, Heritage and Local Gov
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1.22 In the Consultation Paper, the
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charge. 43 The wording of that prov
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has concluded that the scope of s.1
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developments should be subject to p
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Charge Protocol agreed between Kilk
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subject, the authority may form the
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District Court, the maximum penalti
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2 CHAPTER 2 THE ROLE OF DEVELOPERS
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appropriate responsibilities and en
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2.11 The Commission supports the re
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the proposal for a Designated Activ
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which would lead to clarification a
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development and reflect good practi
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planning authority where they are n
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equired to furnish a completion cer
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3 CHAPTER 3 THE OWNERS’ MANAGEMEN
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3.05 As noted in the Consultation P
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Companies Consolidation and Reform
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3.14 The Commission recommends that
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ecommendations constitute minimum l
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epresents the overwhelming majority
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system for economic activities 43 w
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law, limited liability companies mu
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obligations imposed on the company.
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3.51 The Commission also recommends
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entitlement to vote at owners‘ ma
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3.67 The Commission recommends that
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3.74 Sanctions imposed under compan
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Companies before the common areas h
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that the person should take reasona
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3.92 The Commission acknowledges th
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mindful that the core obligations s
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service charges, (d) maintain the f
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4 CHAPTER 4 TITLE AND CONVEYANCING
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to unit owners and any other person
Page 117 and 118: etween unit owners in these develop
Page 119 and 120: names of the additional joint owner
Page 121 and 122: owners‘ management company, thus
Page 123 and 124: equire to have compulsorily registe
Page 125 and 126: (2) Owners’ management company jo
Page 127 and 128: development in a timely manner. The
Page 129 and 130: A contract for the sale of a unit i
Page 131 and 132: 4.52 Under the existing arrangement
Page 133 and 134: purchaser on the transfer or convey
Page 135 and 136: espected. 62 The parties to the pur
Page 137 and 138: At development stage: - a responsib
Page 139 and 140: developers, legal practitioners and
Page 141: - an obligation to keep the managem
Page 144 and 145: managing agent has de facto control
Page 146 and 147: 5.10 The Report al
Page 148 and 149: valid tax clearance certificate. 15
Page 150 and 151: may supplement the hugely important
Page 152 and 153: 5.28 The Commission recommends that
Page 154 and 155: of the time and effort involved in
Page 156 and 157: B (1) Overview Building Investment
Page 158 and 159: every development for the purposes
Page 160 and 161: some owners‘ management companies
Page 162 and 163: pursue on spending the funds of the
Page 164 and 165: uilding investment fund to any pote
Page 166 and 167: mandatory for gated developments to
Page 170 and 171: 6.52 The Commission acknowledges th
Page 172 and 173: surprising, as such standards are c
Page 174 and 175: edrooms in a given apartment. The r
Page 176 and 177: change their managing agent if they
Page 179 and 180: 7 CHAPTER 7 REMEDIAL MEASURES AND R
Page 181 and 182: C Remedial measures for non-payment
Page 183 and 184: diverted to the owners‘ managemen
Page 185 and 186: very difficult to enforce in practi
Page 187 and 188: through them. The NPSRA will also b
Page 189 and 190: is an immediate problem with the ro
Page 191 and 192: 7.39 The Commission envisages there
Page 193 and 194: 8 CHAPTER 8 SUMMARY OF RECOMMENDATI
Page 201 and 202: - an obligation to discharge all re
Page 203: 8.65 The Commission recommends that
Page 206 and 207: Even though legal title is transfer
Page 208 and 209: ‗Completion of development‟ inc
Page 210 and 211: The remainder of this Appendix cont
Page 213 and 214: APPENDIX B DRAFT MULTI-UNIT DEVELOP
Page 215 and 216: DRAFT MULTI-UNIT DEVELOPMENTS BILL
Page 217 and 218: Duties and entitlements of develope
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(a) the name of the company in acco
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(a) that each unit owner shall abid
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(e) develop covenants and agreement
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purposes of a multi-unit developmen
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Report on Multi-Unit Developments - Law Reform Commission

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