Report on Multi-Unit Developments - Law Reform Commission

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this makes it difficult to sell the apartment without the considerable expense for an individual owner of having the company restored to the register of companies. 9. The Consultation Paper also noted that problems with service charges were just one of a number of issues that were giving rise to serious concern. Other problems reflected the absence of appropriate regulation at national level. This included the issue of local authorities taking estates in charge. Concern was also expressed about the regulation of property managing agents, particularly as many were engaged by developers on a longterm contract – not in itself inappropriate, but which appeared to decrease the effective control of apartment owners in a multi-unit development. This lack of effective control was, the Commission noted, linked back to the understanding deficit among apartment owners. Ultimately, there was the risk that if owners were not engaged in the need to protect their property in the long term, especially in terms of capital replacement costs for major items such as roofs and lifts, some multi-unit developments would become development blackspots. E The need for a multi-agency approach 10. Taking into account all these matters, it was also clear to the Commission that the difficulties identified required solutions across the diverse range of agencies with responsibility for multi-unit developments. Because of this, in January 2007 the Commission jointly hosted a conference on Multi-Unit Developments with the Department of Justice, Equality and Law Reform. The conference was attended by over 150 delegates and explored the provisional recommendations in the Consultation Paper. Also discussed at the conference were a number of initiatives by other agencies that had either already begun at that time or were being mooted. 11. In particular, the Office of the Director of Corporate Enforcement (ODCE) outlined its strategy to increase public awareness of the role of owners‘ management companies. 7 This approach underlined the benefits of active engagement by owners in their own management company – and also the pitfalls of inaction. The National Consumer Agency 8 also announced that it would establish a Consumers Forum on Apartment Complexes to identify solutions to some of the key issues concerning service charges and the 7 See for example: Office of the Director of Corporate Enforcement C/2006/2 Draft of the ODCE Guidance on the Governance of Apartment Owners‟ Management Companies, published Dec 2006. The ODCE hope to publish their final guidance in the coming months. 8 The NCA was established under the Consumer Protection Act 2007. 4
elationship between the owners‘ management company and property managing agents. 12. The Minister for Justice, Equality and Law Reform also announced the establishment of an Interdepartmental Working Group on Multi-Unit Developments. This Working Group has brought together all of the key Government Departments and other public agencies with a role in this area. The Commission was happy to have been involved in assisting the work of the Interdepartmental Working Group by attending some of its meetings. 13. Arising from the focus provided by the deliberations of the Interdepartmental Working Group, a number of important initiatives have emerged from public sector and private sector parties with an interest in multiunit developments. This has been enhanced by extensive public debate, including ongoing interest in the Oireachtas on the matter. 9 The Commission now turns to provide an overview of these initiatives. This is especially important for the Commission because they have resulted in a quite different background for the analysis in this <strong>Report</strong> when compared with the situation in existence when the Consultation Paper was published in December 2006. F Developments since the Consultation Paper (1) National sustainable planning guidelines 14. During 2007 and early 2008, the Department of the Environment, Heritage and Local Government (building on similar initiatives at local government level) 10 published a series of national guidelines and draft guidelines connected directly or indirectly with multi-unit developments. These include: Apartment Design Guidelines, 11 Quality Housing for Sustainable Communities, 12 Development Management Guidelines: Guidelines for Planning Authorities, 13 Taking in Charge of Residential Estates Guidelines, 14 9 For example, the debate on Management Companies, Vol.653 Dáil Éireann Debates cols.771-814 (8 May 2008). 10 Notably, a series of publications by Dublin City Council on sustainable apartment living, beginning in late 2006: see Chapter 1, below. 11 January 2007, available at www.environ.ie 12 March 2007, available at www.environ.ie 13 June 2007, available at www.environ.ie 5
Page 1: MULTI-UNIT DEVELOPMENTS (LRC 90 - 2
Page 4 and 5: LAW REFORM COMMISSION‘S ROLE The
Page 6 and 7: LAW REFORM RESEARCH STAFF Director
Page 8 and 9: CONTACT DETAILS Further information
Page 10 and 11: National Association of Building Co
Page 12 and 13: TABLE OF CONTENTS INTRODUCTION 1 CH
Page 14 and 15: D (9) Reports, Acc
Page 17 and 18: TABLE OF LEGISLATION Building Contr
Page 19: TABLE OF CASES AWA Ltd. v. Daniels
Page 22 and 23: B This Report and
Page 26 and 27: Draft Sustainable Residential Devel
Page 28 and 29: freehold basis. 22 In 2005, as part
Page 30 and 31: managing agent and the owners‘ ma
Page 32 and 33: currently a wealth of expertise ava
Page 34 and 35: 39. The Commission is conscious tha
Page 37 and 38: CHAPTER 1 SUSTAINABILITY OF MULTI-U
Page 39 and 40: 1.03 This Chapter aims to consider
Page 41 and 42: comment, the Commission noted that
Page 43 and 44: has published guidelines for new ho
Page 45 and 46: Environment, Heritage and Local Gov
Page 47 and 48: 1.22 In the Consultation Paper, the
Page 49 and 50: charge. 43 The wording of that prov
Page 51 and 52: has concluded that the scope of s.1
Page 53 and 54: developments should be subject to p
Page 55 and 56: Charge Protocol agreed between Kilk
Page 57 and 58: subject, the authority may form the
Page 59 and 60: District Court, the maximum penalti
Page 61 and 62: 2 CHAPTER 2 THE ROLE OF DEVELOPERS
Page 63 and 64: appropriate responsibilities and en
Page 65 and 66: 2.11 The Commission supports the re
Page 67 and 68: the proposal for a Designated Activ
Page 69 and 70: which would lead to clarification a
Page 71 and 72: development and reflect good practi
Page 73 and 74: 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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3.74 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
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developers, legal practitioners and
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- an obligation to keep the managem
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managing agent has de facto control
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5.10 The Report al
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valid tax clearance certificate. 15
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may supplement the hugely important
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of the time and effort involved in
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B (1) Overview Building Investment
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every development for the purposes
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some owners‘ management companies
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pursue on spending the funds of the
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uilding investment fund to any pote
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mandatory for gated developments to
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older multi-unit developments which
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6.52 The Commission acknowledges th
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surprising, as such standards are c
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edrooms in a given apartment. The r
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change their managing agent if they
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7 CHAPTER 7 REMEDIAL MEASURES AND R
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C Remedial measures for non-payment
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diverted to the owners‘ managemen
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very difficult to enforce in practi
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through them. The NPSRA will also b
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is an immediate problem with the ro
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7.39 The Commission envisages there
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8 CHAPTER 8 SUMMARY OF RECOMMENDATI
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- an obligation to discharge all re
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Even though legal title is transfer
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‗Completion of development‟ inc
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The remainder of this Appendix cont
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APPENDIX B DRAFT MULTI-UNIT DEVELOP
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DRAFT MULTI-UNIT DEVELOPMENTS BILL
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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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