Report on Multi-Unit Developments - Law Reform Commission

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jurisdiction of the Companies Registrar or the High Court to restore to the Companies‘ Register an owners‘ management company which had been struck off. An application for this can be made by any member of the company (an apartment owner) or creditor within 20 years of the date of dissolution of the company. 31 . 7.35 The Commission considers that a major consideration for the Circuit Court in dealing with an application for a remedial order should be compliance, so far as this is practicable, with the statutory requirements proposed in this <strong>Report</strong> for developments of 5 units or more. The order could provide, for example, that an existing development should convert to the owners‘ management company (OMC) model recommended in this <strong>Report</strong> if it is satisfied that this would enable the development to operate more smoothly. 7.36 The Commission now turns to set out its detailed recommendations on rescue provisions. 7.37 The Commission recommends that the Circuit Court shall have jurisdiction to make a remedial order to enable the rescue and rehabilitation of existing or future multi-unit developments, based on the following elements: the application may be made by any person or body interested in the multi-unit development, excluding unsecured creditors; the Court shall have jurisdiction to deal with any matter which prevents the development from functioning effectively or denies to those interested legitimate expectations and which cannot be solved otherwise; notice of the application should be served on any other interested person or body and such other person or body shall have the right to make representations at the hearing of the application; and the Court shall have a wide discretion as to the remedial orders it can make. 7.38 The Commission appreciates the importance of providing the Court with some form of starting point in determining the range of discretion to be exercised. In the Consultation Paper, the Commission recommended that any party applying for a remedial order should be required to put forward in the application a draft order or scheme for the approval of the Court. This proposal has a number of benefits. First, in view of the complexities of multi-unit developments, it is important that the Court is not left in a vacuum in considering how to exercise its discretion. Second, the devising of a draft order or scheme brings focus to the parties in determining, before the application is made, what the most desirable outcome would be. This in turn raises the potential for the parties to settle the difficulty prior to the application for a rescue provision being brought before the Court. 31 Currently, only the High Court has jurisdiction to restore companies to the Companies Register under s.12B(3) of the Companies Act 1963, as inserted by the Companies (Amendment) Act 1982. 170
7.39 The Commission envisages there rescue provisions may be used where an impasse is reached between a majority and minority of unit owners on a decision of the owners‘ management company. As noted in the Consultation Paper: ―Even if that minority is motivated by malice or other negative factors such as stubbornness or disinterest, it may not be guilty of any breach of obligation and, to an extent, is entitled to stand on strict legal rights. If the only solution is to amend those rights in some way, constitutional requirements dictate two things. The first is that the solution would have to be based on the interests of all those involved, taken as a whole. The other is that, to the extent that the vested rights of any person are affected adversely without consent, appropriate compensation would have to be made.‖ 32 7.40 In granting the remedial order, the Commission considers that a number of guiding principles should be provided to enable the Court to ensure the general long-term efficacy of rescue provisions. First, the interests of all of the parties potentially affected by such an order must be considered. Second, the Court must be able to hear applications from any party with an interest in the development. Third, the Court will take into account the implications of the statutory scheme for multi-unit developments recommended by the Commission in this <strong>Report</strong>. Finally, general principles of equity will be applied by the Court in determining what type of order to make, with the result, as mentioned above, that any person who establishes that a vested interest will be adversely affected by the order must be taken into account. The Commission now turns to set out its recommendations on this aspect of the rescue jurisdiction. 7.41 The Commission recommends that the applicant for a remedial order should be required to put forward in the application a draft order or scheme for the approval of the Court. The Commission also recommends that, in the exercise of its discretion and in making any remedial order, the Court shall have regard to: representations made to it by any interested person; the interests of all interested persons, taken as a whole; the desirability of compliance with the provisions of the [draft Multi-Unit Developments Bill 2008 in this <strong>Report</strong>] applicable to new multi-unit developments of 5 units or more; the Property Registration Authority‟s programme for compulsory registration of title; the need to take into account the legitimate vested interests of any party adversely affected by any order. 32 LRC (CP 42-2006) 11.17. 171
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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
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etween unit owners in these develop
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names of the additional joint owner
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owners‘ management company, thus
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equire to have compulsorily registe
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(2) Owners’ management company jo
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development in a timely manner. The
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A contract for the sale of a unit i
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4.52 Under the existing arrangement
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purchaser on the transfer or convey
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espected. 62 The parties to the pur
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At development stage: - a responsib
Page 139 and 140: developers, legal practitioners and
Page 141: - an obligation to keep the managem
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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 168 and 169: older multi-unit developments which
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: is an immediate problem with the ro
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
Page 219 and 220: (a) the name of the company in acco
Page 221 and 222: (a) that each unit owner shall abid
Page 223 and 224: (e) develop covenants and agreement
Page 225 and 226: purposes of a multi-unit developmen
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Report on Multi-Unit Developments - Law Reform Commission

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