Report on Multi-Unit Developments - Law Reform Commission

this regard. It will have the effect that developers, where they have transferred
all legal and beneficial interest in a development to the owners‘ management
company and the unit owners respectively, and have completed the
development, will not be able to claim as theirs any remaining land on the site. 12
The map registered in the Land Registry will serve as a clear reference point for
this.
D
Development Stage: the developer and the owners’ management
company
2.14 The Commission now turns to a central element of its proposed
reforms: clarifying the appropriate role of the developer when conveyances in a
multi-unit development begin, 13 that is, when units are being purchased and
before unit owners start to move in to apartments. Current conveyancing
practice provides that the transfer to the owners‘ management company will
take place when the development has been completed but the decision as to
when a development has been completed appears to be left entirely to the
developer. In the case of some developers, this can extend the ‗development
stage‘ of the development for many years. This presents a range of serious
problems for unit owners. 14
2.15 Because of the lack of certainty in the current position, the
Commission has concluded that significant reform of the conveyancing process
used for the sale of new units in multi-unit developments is required to clarify
the process and avoid the problems which currently exist. This involves the
incorporation of an owners‘ management company and the vesting of the legal
title of the development in the company by the developer before any
conveyance of units occur. The developer will also be required to register the
legal title to the development under the name of the owners‘ management
company. 15 Under the Commission‘s proposals, the developer will retain the
beneficial title in each unit until they are sold individually to unit purchasers. The
Commission also makes specific recommendations on the general objects and
specific functions of the owners‘ management company 16 The Commission‘s
recommendations concerning the owners‘ management company are based on
12
See paragraph 2.22 below.
13
For further discussion of the specific title and conveyancing issues, see Chapter
4.
14
See paragraph 2.01 above.
15
The system envisaged by the Commission is discussed in Chapter 4.
16
See Chapter 3, Legal Structures for Managing Multi-Unit Developments, below.
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