NCA welcomes publication of multi-unit development bill
27 May 2009
The NCA today welcomed the publication of Multi-Unit Developments Bill, saying that it represented a major step forward for the protection of consumers living in apartments and multi-unit developments.
Ann Fitzgerald, Chief Executive of the NCA said, “With more and more consumers living in multi-unit developments, we have long been aware of the need for regulation of the industry. It was for this reason that the NCA carried out research and published a report on the area in 2006 and set up the subsequent industry Stakeholder Forumto represent consumer interests while the legislation was being drawn up.
“The publication of Bill represents a good day for consumers as many Irish owners multi-unit properties have found themselves in difficult positions arising from the poor operation and management of their developments. The Bill will serve to empower them to have a greater say in the way in which their developments are managed and administered.”
She went on to say, “From a consumer perspective there are a number of key areas addressed in the bill that the NCA is very happy to see, including the transfer of the common areas to the ownership of the Owners’ Management Company, changes in voting rights, transparency in the calculation of service charges and the requirement to create a sinking fund. These are areas which were highlighted to us through our research as leading to considerable consumer detriment and were the subject of key recommendations made by the NCA.”
Key Areas Addressed in the Bill of Benefit to Consumers:
- Transfer of common areas & extinguishment of beneficial interests: The Bill provides a schedule for the transfer of the common areas to the ownership of the Owners’ Management Company (OMC) and, most importantly, for the extinguishment of the Developer's beneficial interest on completion of the development. This clarity is most welcome as delays in transfer of ownership and of beneficial interests in Common Areas have proven a particularly thorny issue for MUD owners. The NCA highlighted this problem in its October 2006 Report, Management Fees and Service Charges Levied on Owners of Property in Multi-Unit Dwellings, see recommendation 13
- Voting: The Bill provides that votes shall be allocated on a single vote per unit basis. This responds directly to recommendation 14 of the NCA’s October 2006 Report, Management Fees and Service Charges Levied on Owners of Property in Multi-Unit Dwellings. This should obviate previous difficulties relating to "golden votes" being held by Developers. The NCA notes, however, that the Bill makes no provisions specific to the voting rights of tenants
- Service charges: The Bill provides for clear iteration of cost categories to be included in the calculation of the service charge and a formal process, through a general meeting of the OMC, for the approval of such service charges. This addresses Recommendation 21 of the NCA’s October 2006 Report, Management Fees and Service Charges Levied on Owners of Property in multi-unit Dwellings
- Sinking funds: The Bill establishes a statutory requirement to create a Sinking fund. The NCA particularly welcomes this as a means of preserving and protecting the long term interests of Unit owners as developments age and may require works more substantial than mere care and maintenance. Addresses Recommendation 23 of the NCA’s October 2006 Report, Management Fees and Service Charges Levied on Owners of Property in Multi-Unit Dwellings
In October 2006 the Agency published a report on property management and a consumer booklet targeted at those living in multi-unit developments. As a follow up to this work, an online consultation process "Have Your Say" was launched in February 2007, seeking consumer input in relation to the experience of living in a multi-unit development.
In response to ongoing consumer concerns, the National Consumer Agency established and chaired a voluntary stakeholder Forum in March 2007.
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