# Multi-Unit Developments Bill 2009



## Butter (27 May 2009)

This was sent to me today via the apartmentowners forum group; many thanks to them.
This will make a big difference to people living in developments with management companies.

[broken link removed]

b3209s-memo.pdf (application/pdf Object) (bill pdf format added by mod)


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## gazza1 (27 May 2009)

*Re: Multi-Unit Developments Bill*

Hi all,

This is the text of the actual press release. Happy reading. Finally us apartment owners both current and prospective, will have some bit of legal protection.

 Ahern Launches New Deal for Apartment Owners

       Multi-Unit Developments Bill 2009 outlines legal protections
                      for existing and new complexes



The Minister for Justice, Equality and Law Reform, Mr. Dermot Ahern T.D.,
today published the Multi-Unit Developments Bill 2009 which introduces
sweeping reforms for the owners of existing and new apartment and
multi-unit residential complexes.

The new Bill will update legislation in apartment management and ownership
and significantly refocus legal protections towards owners of apartments.

Speaking at a joint press launch with Mr. John Gormley, T.D., Minister for
the Environment, Heritage and Local Government, Minister Ahern said: “The
comprehensive reforms set out in the Bill are designed to improve the
regulation of multi-unit developments and the governance of management
companies in such developments. There has been a dramatic growth in
apartment living in recent years. Many people who have purchased apartments
in multi-unit developments may not have fully realised the type of
ownership arrangement into which they were entering and the
responsibilities involved in membership of the property management company.
In some cases, developers have been slow to transfer ownership of the
common areas to the property management company and these delays have
caused frustration for owners who want to become involved in managing and
maintaining their developments. This Bill will address some of these
fundamental issues.

“The Bill’s provisions will ensure that individual apartment owners in both
new and existing multi-unit developments will enjoy improved legal
protection. These reforms address concerns identified in the Law Reform
Commission’s Report on Multi-Unit Developments.”

“My purpose in the Bill is to introduce a comprehensive legislative
framework to cater for the specific needs of apartment owners in multi-unit
developments. Existing legislation under which property management
companies operate is inadequate to deal with and resolve the various
difficulties being experienced by individual apartment owners.”

Minister Ahern added: “The Bill will, I believe, improve the management and
maintenance of the internal and external common areas in apartment
complexes. One key point is that, in future, a developer must establish a
property management company and transfer the common areas of the
development to it before any apartment in the development is sold. The Bill
specifies new standards to ensure the smooth ongoing operation of such
companies, including rules on the calculation of service charges, the
establishment of sinking funds, the holding of annual meetings and the
preparation of reports for apartment owners within the complex. The Bill
also includes provisions for the resolution of disputes. While the emphasis
is on resolution of such disputes by means of mediation, the court will be
empowered to make appropriate orders where mediation attempts have failed.


Minister Gormley said: "In June 2008, I launched the Law Reform
Commission’s Report on Multi-Unit Developments and I am very pleased that
this Government has been able to make such significant progress in
addressing the Report’s recommendations and in meeting the very ambitious
timeframe that we set ourselves earlier this year.

"This Bill is a further step in the Government's response to the issues
faced by apartment dwellers.  In 2007 my Department produced design
standards for new apartments, in 2008 we issued guidelines on Sustainable
Residential Development in Urban Areas, and in 2009 I brought in new
regulations setting standards for rented accommodation.  These measures,
taken together with the Bill being published today, will be of real benefit
to those who live in apartments or other multi-unit developments."

The new standards will also apply to completed multi-unit developments and
to those under construction. In cases where the common areas have not
already been transferred to the property management company, the Bill
provides that they must be transferred within 6 months of enactment of the
legislation.

The Bill and accompanying Explanatory Memorandum are available on the
Oireachtas website (www.oireachtas.ie)

27 May 2009

Note for Editors

Multi-Unit Developments Bill 2009

The Bill contains proposals for a comprehensive statutory framework for
multi-unit developments and for governance of the property management
companies which own and manage the common internal and external areas of
such developments. This new framework will apply not only to new
developments, but to those under construction and those which have already
been completed.

Obligation to establish company
·        In future, the developer of a multi-unit development must
establish an owners’ management company and transfer ownership of the
common areas         to it before any apartment is sold.
·        This transfer of ownership does not relieve the developer in any
way of his obligations to complete the development.
·        The company must have the words “owners’ management company” in
its name.
·        The owner of each apartment will have one vote.
·        When an apartment is sold, membership of the company will in
future transfer automatically to the new owner.


Duties of company
·        An owners’ management company will be obliged to prepare an annual
report and provide a copy to each apartment owner.
·        The annual report must be discussed at a meeting of company
members and the meeting must be held at a reasonable time and within
reasonable         proximity of the development.


Annual service charges
·        An owners’ management company must establish and maintain a scheme
of annual service charges; the annual charge must be approved by a
general meeting of the company’s members.
·        The annual charge must be calculated on a transparent basis and be
fairly apportioned between the apartment owners.
·        The service charge may not be used to defray expenses on matters
which are the responsibility of the developer or builder.
·        Service charges in respect of any unsold units must be paid by the
developer.


Sinking Funds
·        An owners’ management company must establish and maintain a
‘sinking fund’ for non-recurring maintenance and repairs.
·        In new multi-unit developments, the fund must be set up within
three years of the sale of the first unit; in existing developments, it
must be set up                 within 18 months of enactment of the Bill.
·        The annual contribution to the sinking fund is a matter for the
apartment owners but a minimum annual charge of €200 per unit will apply.


House Rules
·        An owners’ management company may make House Rules for the
multi-unit development with the objective of enhancing the quiet and
peaceful         occupation of the apartments.
·        These Rules must be approved by a meeting of the apartment owners.

·        In cases where an apartment is let, a copy of the Rules must be
included in the letting agreement and they will be binding on the tenants.



Resolution of disputes
·        The Bill provides for a new court-based dispute resolution
mechanism which will apply to both new and existing multi-unit
developments.
·        Mediation is the preferred option for resolving such disputes and
applicants must state whether or not mediation has been attempted.
·        The court may, at any stage during proceedings, direct the parties
concerned to meet for discussions and attempt to settle the matter in
issue.
·        Where mediation fails, the court may make an order where it is
satisfied that a right has been infringed or an obligation has not been
discharged.


Amended strike-off provisions
·        Struck off property management may be restored to the Companies
Register within a 6-year period provided all outstanding annual returns are
submitted.


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## markpb (27 May 2009)

*Re: Multi-Unit Developments Bill*

Like Marg, I too am a member of the Apartment Owners Network. We've been lobbying hard for this legislation for months and this is a terrific result. I'm still in shock.


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## Yorrick (29 May 2009)

The provisions for dealing with non payers of Mangement Fees seem excessive and drawn out. (Section 18.) It involves bringing a case to the Circuit Court which will be expensive as a Solicitor and Barrister would be required.
The Law Reform Commission had recomended using the Small Claims Court which is quick and cheap.
While I support the requirement to have a Sinking Fund I don't think that a minimum charge should be legislated as different complexes have different needs. The Law Reform Commission recomended that the Sinking Fund be exempt DIRT


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## Mers1 (25 Jun 2009)

Has this been passed as law? forgive the silly question.


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## maybelline (25 Jun 2009)

Yorrick said:


> The Law Reform Commission recomended that the Sinking Fund be exempt DIRT


 
That would be great, except I'm a director and on reviewing my draft management company accounts from the auditor and asking a few questions it turns out that the DIRT was credited against the corporation tax and so we had to pay the difference, as the interest was viewed as profit!! Does this sound right to anyone? Is this covered by the new Bill?


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## Yorrick (25 Jun 2009)

I honestly don't know the answer to that question. The Bill has just been introduced to the Seanad and has a good way to go before it is law.
I am disappointed that certain recommendations from the Law Reform Commission have been ignored as they were very practical. Especially for small Management Companies. For example we have one owner out of 45 who is refusing to pay a Management Fee of €1250. It is ridiculous that we will have to employ a Solicitor and Barrister to pursue him in the Courts. Then some senile Judge may order him pay at a rate of 5 Euro per week !!


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