Report on Multi-Unit Developments - Law Reform Commission

D
Rescue and Rehabilitation
7.28 In the Consultation Paper the Commission discussed the need for
―rescue‖ provisions which would be available to resolve problems arising in
respect of the operation of any existing or future multi-unit development. 25
Where problems do not fall into the categories of dispute resolution outlined
above, parties would be enabled to apply to the Circuit Court for a remedial
―rescue‖ order. The Commission‘s provisional recommendations have been
approved by those who made submissions on the Consultation Paper and,
having reflected on the issue, the Commission confirms those views in this
<strong>Report</strong>.
7.29 In the Consultation Paper, the Commission recommended that, given
the many permutations which could potentially give rise to the engagement of
rescue provisions, they should be sufficiently broad and flexible to cover any
eventuality. 26 An application for a remedial order from the Circuit Court under
the rescue provisions should only be presented if it involves the resolution of a
problem preventing the development from running soundly, which cannot
otherwise be resolved and which denies legitimate expectations held by parties
with an interest in the multi-unit development. Accordingly, applications which
are frivolous or vexatious, or which have the potential to be resolved by other
dispute resolution mechanisms, will not be suitable for this proposed remedy.
7.30 As mentioned, the range of problems open for resolution by the
proposed rescue jurisdiction will be considerable. For example, it could be used
where it transpires that the conveyancing documentation is defective and needs
substantial amendment to enable the multi-unit development to function
properly. Similarly, it could be used where there is an ongoing dispute in the
apportionment of the service charge and building investment fund contributions
in the conveyancing agreements of the units. A third potential instance would be
where unit owners take the view, in the post-development stage, that
covenants 27 contained in the lease agreements are open for amendment.
7.31 Another situation would be comparable to the examinership
jurisdiction in the Companies Acts 1963 to 2006 under which a company can
obtain protection from creditors where there is a financial deficit in the company.
In the case of a multi-unit development, this could include a situation where no
building investment fund, or no adequate one, has been established and there
25
26
27
The Commission envisages however that rescue provisions will be primarily used
to resolve problems arising in existing developments.
LRC (CP 42-2006) paragraph 10.24.
Not including the core and irreducible covenants proposed in Chapter 4.
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