Making Ireland Fairer
Decently managed apartment buildings
Many of us who have managed to buy apartments soon realise the buildings themselves are badly managed. And that the regulatory framework for apartment management companies leaves a lot to be desired. I was contacted recently by an apartment dweller who complained that the management company of their apartment block is seeking a 50% increase over the management fee demanded last year. He and the other residents are reluctant to pay this fee-hike because the management company has not actually ensured the maintenance of the building as it should.
Plants have been left to die. Grass areas have become infested with weeds. Window cleaning has never been done. Bin housing has not been adequately cleansed. Vermin have proliferated. The promised (and paid for) twenty-four-hours-a-day management service is a myth which only come to light when the fire alarm has gone off (twice so far this year) in the middle of the night and no one has responded to calls to turn it off.
Fortunately, I have come across groups of apartment residents who have managed to use existing legislation to help them improve their living conditions. So what's wrong with the system if these problems are solvable using existing legislation?
Let me describe the lengths to which they have had to go to solve their problems with the managing companies and the management agents of their blocks:
After a lot of expensive legal advice, one set of residents has used existing Company Law to have the current directors removed from the management company.
In another case brought to my attention, the management company in question had not even bothered to draft accounts. In this instance, apartment dwellers were compelled to contact the Office of the Director of Corporate Enforcement and report the management company's failure to hold Annual General Meetings and its failure to draft accounts.
In addition, and again after much work, another set of apartment residents have managed to appoint their own representatives to the board of directors of the management company. Then they fired the managing agent and now the quality of their life has improved.
But what none of the residents who have been in contact with me have succeeded in doing, using current legislation, is to force the developers to hand over ownership of the common parts to residents. Because of this, residents who have successfully battled to organise the maintenance of their buildings, end up organising the maintenance of a building someone else actually owns.
A most unsatisfactory situation.
I shall set out four specific legislative amendments which would enable apartment residents to resolve, with ease, all their difficulties with management companies, managing agents and property developers who refuse to fulfil their duties.
First, no planning permission should be granted for an apartment building unless there is a condition attached to such a permission which compels developers of apartment blocks to form management companies and to grant shares in that company to all those who purchase units within it. Section 34 (1) (i) of the Planning and Development Act 2000 must be strengthened to include this specific stipulation.
Second, there must be a condition imposed upon developers that the developer completes satisfactorily within a specified period an apartment complex. That provision exists when a development includes two or more houses. I fail to see why it should not obtain in the case of apartment developments. I recommend that Section 34 (1) (f) of the Planning and Development Act 2000 be amended accordingly.
Third, as soon as an apartment development is completed satisfactorily, I believe, ownership of the common parts of that development must be handed over immediately to a management company. Amending Section 180 of the Planning and Development Act 2000 offers a mechanism for doing this. A so amended Section 180 would enable management companies, upon application to the Court by a simple majority of individual property owners - ie. such an amendment must be drafted in such a way as to prevent a developer thwarting the desires of residents to take control of the common parts of their apartment complex simply by retaining ownership of apartments within that complex-, to gain ownership of the common parts of an apartment complex.
Fourth, developers must not be allowed to maintain prolonged control of apartment complex management companies. In Britain, which has a much longer history of dealing with multi-unit apartment blocks, the solution which has emerged is the Commonhold and Leasehold Reform Act 2002.
In that Act a Right To Manage was established and vested in residents of multi-unit apartment blocks. To exercise that right residents of buildings with two or more units in them do not even have to apply to the court. They simply have to serve a Notice to Manage on the developer saying they wish to manage the property themselves and that they have set up a Right To Manage company for the purpose of doing so.
In order to exercise this new Right To Manage apartment residents in the UK do not even have to prove a developer is mismanaging the common parts. But if the property is being mismanaged (as is clearly the case in the example I described above) then the residents can apply to the Court to have the developer's legal interest in the property vested in the residents.
In practice, the mere existence of this legislation on the statute book in the UK has led to a massive improvement in the conduct of managing agents, management companies and developers.
Together, I believe, these four legislative measures would combine to make the lives of apartment dwellers the length and breadth of this country immeasurably better.
