Report on Multi-Unit Developments - Law Reform Commission

2.23 The effect of these recommendations is that unit purchasers will be
guaranteed that there is a corporate management structure in place as soon as
the conveyance of a unit is completed. The traditional obligations of the
developer concerning satisfactory construction, completion and snagging of the
development will remain with the developer until the development is certified as
completed. Requiring incorporation of the owners‘ management company at
such an early stage means that even where units are sold off-plan 26 there is
clarity around the respective entitlements and responsibilities of the developer
and the unit purchaser.
2.24 The Commission recommends that, following incorporation, the legal
title to the development will vest in the owners‟ management company and will
become compulsorily registrable with the Land Registry, with the developer
retaining the beneficial interest in each unit.
(3) Other obligations of the developer
2.25 The Commission has already welcomed the publication of the Irish
Home Builders Association‘s Code of Practice for Management Companies in
respect of Multi-Unit Developments, 27 developed in conjunction with the
National Consumer Agency. This non-statutory Code of Practice states that the
developer is responsible for incorporation of an owners‘ management company.
The Commission has already recommended that this be placed on a statutory
basis with specific timelines attached.
2.26 The IHBA Code also requires the developer to ensure that the
owners‘ management company keep appropriate records of service provision
contracts, such as those of a property managing agent. This clearly facilitates
transparency of information for the unit owners. The IHBA Code also requires
the developer to ensure that, on the incorporation of the owners‘ management
company (or as soon as is possible after this), the unit owners are provided with
a number of documents. Of these, the Commission places particular importance
on: warranties and other guarantees, including test records for drainage, water
and heating pipework; fire safety certificates under the Building Control Act
1990; and certificates of compliance with planning requirements and with the
Building Regulations. The IHBA Code is, by its nature, applicable only to
members of the Irish Home Builders‘ Association. The Commission considers
that these requirements, which have a significant impact on the multi-unit
26
This has been known to happen even before construction of the development has
begun.
27
March 2008, available at www.homefacts.ie. The Code came into force for IHBA
members on 15 May 2008.
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