Report on Multi-Unit Developments - Law Reform Commission

7
CHAPTER 7
REMEDIAL MEASURES AND REHABILITATION AND
RESCUE OF DEVELOPMENTS
A
Introduction
7.01 In this Chapter, the Commission turns to the remedial arrangements
that are required to deal with some multi-unit developments which do not meet
the statutory regime proposed by the Commission. This includes the need to
deal with non-payment of service charges by individual unit owners. More
significantly, in the medium to long term the Commission recognises the need to
deal with fundamental problems that might arise in a development, such as a
serious deficit in a building investment fund (sinking fund).
7.02 In Part B, the Commission provides an outline of the preventative
measures that are, to some extent, already in existence to deal with dispute
resolution and those which are planned. In Part C, the Commission discusses
the resolution of non-payment of service charge and building investment fund
contributions. The Commission considers a range of options and recommends
that the jurisdiction of the Small Claims Court should be extended to deal with
disputes which centre on failure of individual unit owners to pay these charges.
In Part D, the Commission deals with developments where the unit owners may
be faced with large rehabilitation bills and the Commission has concluded that it
needs to make specific recommendations on the appropriate form of rescue and
rehabilitation for such developments.
B
Remedial measures and the regulatory setting
7.03 In this Part, the Commission outlines the preventative measures that
are, to some extent, already in existence in terms of the emerging regulatory
system that has already begun to emerge since the publication of the
Consultation Paper in 2006. A fully functioning regulatory system, such as the
system envisaged for the National Property Services Regulatory Authority
(NPSRA), would have the capacity to prevent, through a combination of
licensing and supervisory arrangements and the development of national
guidelines, the occurrence of misunderstandings and poor governance practice
in terms of the relationship between unit owners and managing agents.
Similarly, the Commission‘s proposals concerning owners‘ management
companies may clarify the appropriate respective roles of developer and unit
159