I have a question in relation to an apartment block in which I’m an owner. It relates to a large sum of money that all owners are required to pay for essential fire safety upgrade works (voted for at an EGM of the owners’ management company (OMC) a few weeks ago.
My query relates to the fact that some of the apartments were built in the 1970s and others were built in the 1990s and the fact that there is no difference in costings.
Also, it is possible that the 1990s apartment (a small percentage of the overall development) may benefit from the Government redress scheme that has been proposed but not the others. It was said at a recent EGM that, were the newer apartments (those built in the ‘90s) to be eligible under the scheme, any monies reimbursed could then be divided among all owners (both 1970s and 1990s built apartments).
Anyone familiar with apartment/multi-unit developments in Ireland will know that fire safety has been an issue for some developments in recent years. As such, the issues you face are not unusual. The emphasis on this topic is likely to remain as fire-safety standards rise over time and in the context of the planned national scheme to remediate defects in apartments.
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Your first query does not relate to fire safety as such but to the fact that costs are being billed equally to owners of apartments built in the 1970s and 1990s. You don’t state from which period your own unit dates. This query could equally arise for other investment projects, eg installation of an intercom system, purchase of new carpets etc.
To check if the EGM was correct in apportioning the charges equally, the first port of call would be the lease agreement you signed when you purchased your apartment. This would explain what is covered by the OMC budget and what portion of the budget is to be paid by your unit.
Some developments do charge different kinds of owners in different ways. For example, if there is a lift in one part of a development, then only those owners who benefit from it may be required to pay for its upkeep. Similarly, the cost of maintaining a car park is often allocated on the basis of the ownership of car-park spaces.
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However, in this case, it is quite possible that the current scenario was not envisaged in the 1990s when the second phase of the development was completed so the leases may state that general repair and maintenance costs (such as arise here) should be divided equally between all units.
From the information you supply, it is not clear if the units from the 1970s require a different level of remediation to those built in the 1990s. It may be that, as they were built earlier, they need more work. However, sometimes, earlier designs were simpler and so repairs to units built later might be more expensive.
I would also note that, if it is the 1970s-built apartments that require more work, and owners of the 1990s apartments feel hard done by, these owners might have benefited from contributions to the sinking fund by owners of the older apartments before the newer units were built.
If the costs have been billed as per the leases, it is not clear that you have any comeback. However, section 24 of the MUD (multi-unit development) Act allows a property owner to make a court application to enforce their rights under the legislation if you feel these have been breached.
In relation to your query on the planned redress scheme, it is not clear what exactly this will involve. In January 2023, the Government announced plans to draft legislation to support the remediation of apartments and duplexes with fire safety, structural safety and water ingress issues and its intention to establish a remediation scheme.
Media reports suggest the draft legislation (or at least the “heads of bill”) will be published at the end of 2023 or early 2024. The draft legislation will likely be subject to considerable debate in the Oireachtas. Only after legislation is enacted can a scheme be established with a website, publicity, application forms etc. Applications would then need to be submitted and reviewed before funding is allocated. As such, it could be into 2025 before OMCs start to receive funding.
In July 2023, the Department of Housing, Local Government and Heritage published a code of practice to support approaches to resolving fire-safety defects in apartments. This is intended to assist OMCs and others in implementing the remediation scheme.
In relation to your query as to whether the scheme could apply to 1990s apartments but not 1970s apartments, it does seem that this will be the case. Information provided to date states that the scheme will apply to apartments and duplexes built between 1991 and 2013.
As to your query as to the allocation of funds under the scheme, it is too early to know how this will work. It does seem the intention is to provide funds to OMCs rather than individual owners. For projects not yet undertaken, this may be straightforward. However, for projects already undertaken, or started, there would be issues to tease out. For example, if some owners paid levies to remediate defects but later sold their unit, would an OMC have to pay them back? If an OMC now has other required investment projects, can it use funds received to pay for these rather than giving the money back to owners?
A final point is that it seems that your OMC is now levying for fire-safety works, in advance of the Government’s proposed scheme. As such, the OMC will need to ensure, as much as possible, that it receives funding retrospectively. A January 2023 document of “frequently asked questions” about the proposed scheme states: “In order to ensure that important life-safety works are not paused, remediation works related to fire-safety defects, entered into or commenced from January 18th, 2023, will form part of the remediation scheme, and will be subject to the scheme’s terms and conditions. Such works will need to be agreed with the relevant local authority’s fire services.”
Finbar McDonnell is a chartered property manager and a member of the Society of Chartered Surveyors Ireland
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