THE GOVERNMENT has said its new property law will prevent homeowners from being ripped off by management companies.
The Multi-Unit Development Bill was jointly published yesterday by Minister for Justice Dermot Ahern and Minister for the Environment John Gormley.
Both said people who buy units in apartment blocks, duplex developments and new housing estates will benefit from significant legal protection.
The Bill will tackle the situation where developers have dragged their heels in handing over common areas of the complexes to owners. A key provision of the legislation is that ownership of common areas in apartment blocks or housing estates is transferred from the developer to the management company, controlled by owners, before any unit is sold.
The legislation also provides that transfer of ownership should occur in a timely fashion for developments already completed or partially completed. This will address a situation where developers have held on to a small number of units to retain control of the development company. It has led in some cases to management fees running into thousands of euro being levied on apartment owners.
Opposition parties have argued existing laws were inadequate in dealing with new types of development which have become popular in the past two decades. The reforms are based on the recommendations of the Law Reform Commission.
The development was yesterday welcomed by the National Consumer Agency (NCA), which said it represented a major step forward for the protection of consumers living in apartments and multiunit developments. NCA chief executive Ann Fitzgerald said: “It represents a good day for consumers, as many Irish owners in 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.”
Another requirement will be an annual minimum contribution of €200 per unit for a sinking fund to meet any large, unexpected or non-regular costs. The sinking fund makes the financial aspects of maintaining an estate smoother and easier, said Mr Ahern yesterday. He pointed out this would deal with problems where residents were confronted with huge management bills for unanticipated costs.
The third major feature of the legislation is an emphasis on mediation to resolve any dispute over service charges or other costs. There are provisions for court proceedings should this avenue be exhausted.
“Many people who have purchased apartments may not have fully realised the type of ownership arrangement into which they were entering and the responsibilities involved,” said Mr Ahern.
Conceivably, the standards can be applied to complexes built 20 years ago, where the status of the property management company is unsatisfactory. “Multi-unit” envisages five units or more, but the legislation provides for buildings where there are as few as two.