Report on Multi-Unit Developments - Law Reform Commission

transferred on completion of the conveyance of the final unit in the
development. The Commission is satisfied that, under the existing
arrangements, a significant number of developers convey the legal interest of
the development to the owners‘ management company in a timely manner
during the development stage, before completion of the development itself. 22 It
is clear, however, that this does not always happen and that some developers
who are reluctant to surrender control over the interest in the head title of a
development simply do not sell the final unit in the development.
2.18 A common reason for this is that developers wish to retain control
over exterior areas on the site of the development in order to retain the
possibility that they might be developed at some time in the future. This raises
problems for unit owners when they collectively attempt to make decisions that
will impact on the common areas, and also affects individual unit owners when
they try to sell their units. Either situation invariably results in frustration and
confusion for the unit owners concerned. This confusion is exacerbated
because, currently, there is no statutory regulation or even best practice
guidelines for developers to follow in ensuring that they hand over the freehold
interest to the unit owners by a particular date. The Commission notes that the
Irish Home Builders Association, in conjunction with the National Consumer
Agency, has developed a Code of Practice for Management Companies in
respect of Multi-Unit Developments, 23 which states that developers should
complete transfer in a timely manner. The Commission strongly welcomes this
industry initiative, which is a non-statutory code, and has concluded that it is
appropriate that it should be placed on a secure statutory footing to reinforce
industry best practice.
2.19 The delay in timely transfer creates other problems such as the
absence of clear identification of boundaries to common areas, amenity lands
and easements relating to the specific part of the development. These are vital
pieces of information for any potential purchaser. The Commission therefore
considers that the incorporation of the owners‘ management company and the
transfer of title to it must occur at the initial stage of development. This will
counter any potential situation in which the failure to incorporate an owners‘
management company is used as a justification for delay in the transfer of the
legal title.
2.20 Current conveyancing practice combines the transfer of legal title to
the owners‘ management company with the completion of the development.
The Commission is of the view that these should be treated as separate events
22
This is discussed further at paragraphs 2.18-2.19 below.
23
March 2008, available at www.homefacts.ie. The Code came into force for IHBA
members on 15 May 2008.
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