Taken from the National Consumer Agency Website:
The National Consumer Agency has welcomed the Multi-Unit Developments Bill, which was published at the end of May 2009, as it represents a major step forward for the protection of consumers living in apartments and multi-unit developments (MUDs).
The NCA’s Chief Executive, Ann Fitzgerald, 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 Forum to 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.
“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.”
The following are the key areas addressed in the Bill of benefit to consumers:
- Transfer of common areas and extinguishment of beneficial interests: The Bill provides a schedule for the transfer of the common areas to the ownership of the owners’ management company 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”
- Voting: The Bill provides that votes shall be allocated on a single vote per unit basis. This responds directly to recommendation 14 of the October 2006 Report. 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 owners’ management company, for the approval of such service charges. This addresses Recommendation 21 of the October 2006 Report
- 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 October 2006 Report
A key question you may be wondering about.
Will the new legislation allow the residents appoint a new agent?
There is plans to ensure all management companies are handed over no later than six months after the legislation comes into force although this is subject to change as the bill has yet to be passed.
We would like to hear your comments?
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