Report on Multi-Unit Developments - Law Reform Commission

equired to furnish a completion certificate certified by the architect
on completion.‖ 44
This recommendation is consistent with the Commission‘s recommendation
concerning snagging, albeit arrived at through a different route having regard to
the Commission‘s earlier recommendation in this <strong>Report</strong> that the title to the
development should be transferred to the owners‘ management company
before the conveyance of any unit. The Commission‘s recommendation
concerning the retention of a portion of purchase monies by the owners‘
management company 45 should also act as an incentive to the developer to
deal with the snagging list and furnish certification of completion to the owners‘
management company at the earliest opportunity.
(3) Developers’ Relationship with Managing Agents
2.41 The Commission now turns to the developer‘s relationship with
property managing agents. In the Consultation Paper, the Commission noted
that some developers agree long-term contracts with property managing agents
to provide professional services to the owners‘ management company. 46
Typically, this takes place before any units have been sold. The Commission
considers it unsatisfactory that developers should enter into long-term
contractual agreements on behalf of the owners‘ management company which
will impact on it for many years into the future. In the Consultation Paper, the
Commission provisionally recommended that developers should be prohibited
from committing owners‘ management companies to long-term contracts with
managing agents. Having considered this matter in the preparation of this
<strong>Report</strong>, the Commission has concluded that the essential elements of this
recommendation remain valid but that it is preferable to allow the matter to be
determined by reference to the general principles of contract law. In particular,
having regard to the Commission‘s recommendations concerning the
incorporation of an owners‘ management company, the conferral of equal voting
rights on unit owners on the sale of a unit, the recommendations concerning
completion and the impending regulation of property managing agents, the
adverse consequences flowing under the existing arrangements are less likely
to continue in the future. Indeed, the Commission noted in the Consultation
Paper that the owners‘ management company should not be precluded from
44
Management Fees and Service Charges Levied on Owners of Property in Multi-
Unit Dwellings, Final <strong>Report</strong> for the National Consumer Agency by DKM
Economic Consultants Ltd in association with Kevin O‘Higgins Solicitors, October
2006, Recommendation 12, p. vii.
45
See paragraphs 4.41-4.45 below.
46
Op cit paragraphs 5.20-5.21.
55