Report on Multi-Unit Developments - Law Reform Commission

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CHAPTER 3
THE OWNERS’ MANAGEMENT COMPANY AND
MULTI-UNIT DEVELOPMENTS
A
Introduction
3.01 In the Consultation Paper, the Commission emphasised that a central
issue for unit owners in multi-unit developments is that the legal structure in
place for managing the development should operate in a transparent manner to
protect what is a crucial property investment. 1 The legal structure for most large
multi-unit developments in Ireland is an owners‘ management company (OMC),
of which each unit owner is a member. The Commission is aware that, in a
number of cases, the owners‘ management company structure has failed to
operate in a transparent manner and that this has, in turn, led to a refusal by
some unit owners to pay management service charges. It is important to note
that this result could threaten the future viability of a multi-unit development, and
the Commission discusses this issue separately in this <strong>Report</strong>. 2
3.02 In this Chapter, the Commission addresses how to ensure that the
legal structure in place in a multi-unit development operates effectively. The
Commission is conscious that this requires a number of approaches. The
Commission accepts that some changes are required to current legislative
provisions, notably in the company law code, and these are discussed below.
Equally, the Commission reiterates that there is a pressing and ongoing need
for unit owners to engage actively in the collective management of a
development. In the Commission‘s view, it is clear that any proposed changes
to the current legal regime will only be effective if there is active engagement by
unit owners in the management of a multi-unit development.
3.03 As noted in the Introduction to this <strong>Report</strong>, 3 the Commission is aware
that, since the Consultation Paper was published, significant steps have been
taken to address the understanding deficit about the management of multi-unit
1
(LRC CP 42-2006), Chapter 4, Parts B and C.
2
The Forum was announced by the NCA Chief Executive at the Commission‘s
January 2007 seminar on the Consultation Paper: see also paragraph 3.03
below.
3
Introduction, paragraphs 20-22 above.
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