The meeting has been convened to resume consideration of the Multi-Unit Developments Bill 2009. Apologies have been received from Deputies David Stanton and Noel Treacy. Deputy Terence Flanagan is attending in substitution for Deputy David Stanton. I welcome the Minister for Justice and Law Reform, Deputy Dermot Ahern, and his officials.
Two additional lists of amendments have been circulated and, therefore, we will refer to all three lists at this meeting. A revised grouping list has also been circulated. I request members to switch off all mobile phones.
Section 15 agreed to.
SECTION 16
Amendment No. 31 not moved.
I move amendment No. 32:
In page 14, between lines 43 and 44, to insert the following subsection:
"(8) (a) Notwithstanding subsection (2) an owners’ management company may, prior to the completion of the sale of the first unit in a multi-unit development, set the annual service charge to be levied on the owners of units in the development without holding a meeting in accordance with subsection (2) and such charge may be levied and recovered in accordance with this section.
(b) Prior to the annual service charge pursuant to paragraph (a) the owners’ management company shall prepare an estimate and have regard to the items of expenditure specified in subsection (3).”.
Amendment agreed to.
I move amendment No. 33:
In page 15, subsection (10), lines 7 and 8, to delete all words from and including "upon" in line 7 down to and including "development." in line 8 and substitute the following:
"the first sale of which unit has not been completed, as and from the day of the completion of the sale of the first unit in the relevant part of the development.".
Amendment agreed to.
I move amendment No. 34:
In page 15, subsection (12), line 14, after "owners" to insert the following:
"and calculated by a professional quantity surveyor following consideration of the drawings, mechanical and electrical services, and the obligations regarding services generally set down in the lease between the buyer and the developer".
This amendment calls for a quantity surveyor to calculate the annual service charge. At present there are difficulties and tenants and apartment owners feel they may be charged over the odds. This would bring transparency to the calculation of the annual service charge in different apartment blocks. One would be able to compare the service charge of one apartment block with another. It is very difficult to do that at present. A quantity surveyor has the skills and expertise to calculate the service charges depending on the type of services provided.
I can understand why the Deputy is suggesting this amendment but our view is that making it a statutory requirement to engage professional surveyors would add to the cost unnecessarily. Obviously, if sufficient owners want to engage a surveyor, that is a matter for themselves, but to insist on the engagement of surveyors would not be correct and would add to the cost. We see greater merit for the involvement of surveyors in the process of setting contributions to the sinking fund, the fund for expenditure on refurbishment and improvement works and maintenance of a non-recurring nature. In section 17(1)(d) we have provided that obtaining the advice of a suitably qualified person may also be funded from the sinking fund. We hope unit owners would avail of professional services in that respect, but it is not mandatory.
I appreciate the way the Minister has responded to the amendment but it is very difficult to compare the fees that are changed in different apartment blocks and the significant variation in service charges. The effect of this amendment would be to bring more certainty as the owners would know a quantity surveyor who has the expertise to calculate the service charge has set the correct fee and the consumer would have confidence the check has been done.
Section 16 provides headings for the various elements to be considered in arriving at the level of service charge and we think that template is the best way to proceed.
Amendment put and declared lost.
I move amendment No. 34a:
In page 15, subsection (13), between lines 26 and 27, to insert the following:
"(d) Regulations under subsection (16) may provide that owners living in traditional houses in mixed developments pay a reduced annual service charge.”.
There is an issue in mixed developments where the owners of traditional homes are being charged for the usage of the common areas in the apartments. The service fees are set right across the board. That is not fair to the owners of traditional houses who must subsidise apartment blocks and pay into the sinking funds for the maintenance of apartment blocks. Traditional houses should be kept separate from apartment blocks because one is comparing apples with oranges. Those who own a house feel aggrieved they are subsidising apartment owners.
This amendment suggests that future regulations should provide that the owners of what are referred to as traditional houses should pay a lower service charge than that of apartment owners. Probably that would be acceptable in the majority of cases, but it could lead to unfairness as well, for example, where there is a one-bedroom apartment in a development which contains a number of detached or semi-detached four to five-bedroom houses, it is likely the insurance and refuse disposal costs for such houses would exceed those of the apartment. Why should a house owner pay less in those circumstances than an apartment owner? Section 16(16) allows the Minister to make regulations prescribing the items of expenditure which may be the subject of service charges, procedures to be followed in setting such charges and the arrangement for the levying and payment of such charges. I believe there is sufficient provision in place.
That is not the reality on the ground. Home owners are not happy and they feel aggrieved by the current arrangements.
If we could think of a better way, we would take it on board, but the amendment would lead to unfairness for the owners of small apartmentsvis-à-vis larger houses.
In my constituency individual householders living in traditional houses would pay an individual charge to the private refuse collector in the area, whereas in an apartment complex, they use a large bin. It may be different in other parts of the country but that is the case in my constituency. The argument the Minister made about refuse and service charges would not stand up in that instance. In those circumstances, why should the individual householder in a traditional house,detached or semi-detached, the point raised by Deputy Flanagan, pay for the common areas in the apartment block?
There may be what is called a traditional house as part of a building that also contains apartments. It would be regarded as a house as such and, in those circumstances, there must be a sharing of the insurance and service charges. There may be circumstances where they might be separate but I think it is best to leave them to be dealt with case by case rather than by statute because one size does not fit all.
Amendment put and declared lost.
Section 16, as amended, agreed to.
SECTION 17
I move amendment No. 35:
In page 16, lines 5 to 14, to delete subsection (2) and substitute the following:
"(2) Expenditure shall be considered as being expenditure on maintenance of a non-recurring nature where-
(a) the expenditure relates to a matter in respect of which expenditure is not generally incurred in each year,
(b) it is certified by the directors of the owners’ management company as being expenditure on maintenance of a non-recurring nature, and
(c) the expenditure is approved by a meeting of the members of the owners management company as being expenditure of a non-recurring nature.”.
This is a drafting amendment to clarify what is meant by expenditure of a non-recurring nature, that is, the type of expenditure which would be covered by the sinking fund.
Amendment agreed to.
I move amendment No. 36:
In page 16, subsection (4), lines 22 and 23, to delete all words from and including "upon" in line 22 down to and including "development." in line 23 and substitute the following:
"the first sale of which unit has not been completed, as and from the day of the completion of the sale of the first unit in the relevant part of the development.".
Amendment agreed to.
I move amendment No. 37:
In page 16, subsection (5), line 27, after "other" to insert "sufficient".
This inserts the word "sufficient". The adequacy of the provision made for a sinking fund is of real concern and this is the net point. In the financial and economic circumstances in which people find themselves today the membership may be tempted to agree a plainly insufficient contribution to the sinking fund. What I seek to insert is a type of test to ensure the figure is reasonably sufficient for difficulties that can be anticipated.
I suppose an alternative proposal may be to amend section 17(6)(a) so as to establish the sinking fund in the first year rather than after three years. There may be merit to this. Whichever way, there is an issue here because in circumstances where people are financially strapped and where some people have lost their employment, it is important that the sinking fund does not suffer. I know the need for the sinking fund will be greater in some developments than in others but there have already been distressing cases where people have suffered because of the absence of provision for a sinking fund or because it is inadequate.
I support the amendment. Three years is too long to wait. Many apartment blocks are in disrepair at present and waiting for three years for a sinking fund is unacceptable. The limit has been set at €200 but this is on the low side and should be re-examined by the Minister.
The legislation seeks to encourage unit owners to take an active role themselves in managing the development. Therefore, I would prefer to leave the decision regarding the level of sinking fund contributions to them. I understand what the Deputy is trying to get at and we spoke about this when discussing amendment No. 34. We have provided in section 17(1)(d)that expenditure incurred in obtaining advice from a suitably qualified person may be debited to the sinking fund. It is in the interests of unit owners to ensure their apartment complex is properly maintained.
I draw attention to section 17(9) on page 16 which allows the Minister to make regulations prescribing the matters to be taken into account in setting sinking fund charges. Therefore, I do not believe the addition of the word "sufficient" as proposed by Deputy Rabbitte is necessary. For instance, who will determine what is sufficient? The unit owners will probably have to get a qualified person to state what is or is not sufficient.
With regard to the issue Deputy Rabbitte raised about people who lose their jobs, this is the reason for the grace period of three years at the latest which is included in section 17(6). Let us say some unusual, out of the ordinary or once off expenditure was required, such as for the breakdown of the lift, it would be far preferable for the company to correct and repair this and the onus is on it to do so. A sinking fund could be amended to take account of the repayment of this.
On the second point, it is a matter of judgment whether the sinking fund is established on day one or whether one lets some time elapse. Perhaps the Minister has a point that people are vulnerable financially after purchasing and moving in. Perhaps, theoretically, a new development should not be in serious need. However, I find it very difficult to understand why the Minister will not accept the word "sufficient" because it is a very modest but important change. It is a bit unusual that the legislation stipulates an amount, but it does. All I seek to do is to have it state the amount shall be €200 or such other sufficient amount as may be agreed.
In the nature of these matters, I do not think the Minister is right to state one would need to bring in a professional to assess it. The Minister would be surprised at the mix of skills one has nowadays when a collection of residents in one of these developments comes together. The hurdle they must jump is to agree it themselves and this is putting the responsibility on them to behave responsibly. If the Minister is correct about section 17(6)(a) and wants to let it stand, I am tempted to state I want to examine it prior to Report Stage. I am minded to press the amendment and to ask the Minister to reconsider because there is a real issue here. There is nothing worse than people who find themselves in a new development where there is not much affinity between them or community spirit who find a few years down the road that there is a serious problem to be rectified but there is inadequate finance to do so.
Section 17(9) states the Minister may make regulations prescribing the matters to be taken into account in setting the charges. We intend to make those specifying regulations. The problem with the word "sufficient" is that it introduces a threshold and in the event of people asking what is sufficient we may not get agreement. The normal thing would be to get somebody reasonably independent, and I accept there may very well be surveyors among the owners of the apartments. However, they would have self-interest and I want to make that point.
With regard to specifying the amount in the legislation, because of the comments made in the Seanad we amended this and removed the reference to €200; people felt it would be better to leave it to the people involved. We were trying to ensure sufficiency in sinking funds but at the end of the day, and I have some experience of this, it is preferable that it be decided among the people involved and that if any unusual payment has to be made then the contributions would have to be increased at that time, whether it be for the repair of the lift, the maintenance of the building or painting.
I reserve my position for Report Stage.
Amendment, by leave, withdrawn
Amendments Nos. 37a and 38 are logical alternatives and will be discussed together.
I move amendment No. 37a:
In page 17, subsection (9), between lines 11 and 12, to insert the following:
"(f) The calculation of the sinking fund shall be available to inspect on request by any member or by any person or body corporate who agrees a contract for sale in respect of a unit or units in the Multi-Unit Development.”.
This is an amendment to ensure potential purchasers have access to the accounts to know how much money is in the sinking fund. It is to ensure transparency and to ensure they have the full picture before they undertake the purchase of an apartment, which is a big purchase in itself.
We accept there is merit in what is being suggested but it is not in the correct place in the Bill. The proper place is section 15(2), which specifies the matters to be included in the annual reports of the management companies. Subsection (2)(d) already provides that the details of the basis of the service charge shall be included in the annual report and it would be logical to make a similar provision relating to the sinking fund. I will come back to the issue on Report Stage.
Amendment, by leave, withdrawn.
Amendment No. 38 not moved.
Section 17, as amended, agreed to.
Sections 18 and 19 agreed to.
SECTION 20
I move amendment No. 39:
In page 17, between lines 37 and 38, to insert the following subsection:
"(2) A local authority shall prepare bye-laws setting out a set of options for provisions that may be included in house rules within its functional area. An owners' management company may include in its house rules provisions from the options set out in the bye-laws. On their adoption, the house rules shall have the status of bye-laws and provisions made by the local authority for sanctions against owners who are in breach of the house rules may be applied.".
Essentially, this would provide a menu of house rules, drawn up by the local authority, and it would also provide that house rules will have the status of by-laws with appropriate sanctions. There would be referral to the local authority as some kind of arbiter of fairness so that no individual member would be unreasonably oppressed. If the rules had by-law stature, sanctions to make them work could be agreed.
This amendment appears to seek to put a new statutory obligation on local authorities to draft by-laws giving all management companies a menu of options for incorporation into house rules, and where such options are incorporated, the house rules acquire by-law status and may be enforced by local authority staff. I have serious doubts about involving local authority staff in the enforcement of these rules within private apartment blocks.
For example, house rules normally prohibit the keeping of pets and what would happen if a resident kept a dog or cat, contrary to such rules? Would it be the responsibility of local authority staff to seize the animal or would the staff need a court warrant to enter a private property to do so? Section 20(2) requires that house rules must be consistent with the covenants and conditions in the document's title. How would the local authority ensure that any by-laws made in the manner suggested in the amendment would meet with that requirement? I suggest that the proposal is not particularly wise.
All of this is a creation of the boom and the push towards higher-density housing. County managers were delighted to get out from under the issue and county councils have no responsibility for the taking in charge of estates, for which they would normally be responsible. The result is that emporiums have gone up all over the place and the normal rules about taking in charge do not apply. In this amendment I am postulating that it would be good to have uniformity across a county, with the local authority being in a position to apply the uniformity by drawing up a menu of rules.
The second point relates to enforcement, where there appears to be a real problem. House rules can be agreed in developments but how are they enforced? I am not talking about a cat or dog but rather parking issues, for example. How do rules stick and how can sanctions be imposed on those who transgress the rules and tell people to get lost while doing so? Without sanctions, it is unlikely there will be enforcement. It is a growing problem in some of these developments.
The management company should have the option of imposing a penalty or fine, particularly on repeat nuisance offenders. As Deputy Rabbitte mentioned, it may relate to parking problems or loud music being played by people in apartment blocks. There should be some deterrent and owner management companies should be able to impose a fine on such people.
We can consider the practicality of somebody playing loud music. There are constitutional issues with regard to coming on to private property and I suggest strongly that it is not really the place for a local authority to intervene in what is potentially an issue that has been dealt with from the beginning by the breach of the covenants and conditions contained in letting agreements or leases under which the properties are purchased.
Section 20(10) indicates: "where a person, who by reason of subsection (1) is obliged to comply with house rules, commits a material breach of such rules, the owners' management company of the development concerned may recover the reasonable costs of remedying such breach from such person which costs may be recovered as a simple contract debt in a court of competent jurisdiction." Any of these disputes are normally private and should be dealt with by the people involved and the owners' management company. Normally, if there is an alleged breach of the covenants and conditions, it would be adjudicated by a court. Section 21 allows for the mediation of such issues before going to court. From a practical perspective, the suggestion that the local authority should be the watchdog or policeman is not really practical.
There is nothing unusual about the local authority making by-laws.
That would relate to the areas for which they have responsibility. It would not relate to private areas. The Deputy mentioned earlier that this relates to local authorities taking areas into their charge but they never take in charge private property. They take in charge common areas, which is a different issue. The Deputy is trying to extend the remit of local authorities to police the behaviour of people living in apartments.
I do not believe that. Where does the amendment say that? I seek to have by-laws for the same said common areas. The Minister introduced the idea of cat and dog ownership to the debate but I am talking about breaches in car parking rules, which have come to my attention on a number of occasions. The county council can make by-laws for normal estates so why should it not be able to make by-laws for the common areas in this instance?
House rules relate to the house itself. Common areas are dealt with in by-laws and also in the covenants and conditions laid down in leases with regard to what can and cannot be done in them. However, the local authority should not be the adjudicator or policeman of the behavioural aspects of people enjoying their houses.
I do not think that is what my amendment states. It reads:
A local authority shall prepare bye-laws setting out a set of options for provisions that may be included in house rules within its functional area. An owners' management company may include in its house rules provisions from the options set out in the bye-laws. [They are options set out in a general regime of by-laws.] On their adoption, the house rules shall have the status of bye-laws and provisions made by the local authority for sanctions against owners who are in breach of the house rules may be applied.
One can make all the house rules one likes, but it is impractical to say that, whatever mediation is provided for, people must go to court about typical nuisance breaches. They have other things to do in their working lives and they do not have the money, in some cases, to go to court to enforce contract law. Where members voluntarily assent to the operation and enforcement of the house rules and there is normal, civilised behaviour, that is fine.
The Minister telephoned a colleague of his last night while we were at a meeting in a certain part of my constituency. It would make the hair on one's head stand up, if one had any, to hear what people are living with in terms of anti-social behaviour.
I am sorry; I did not hear what the Deputy said.
The Minister made a telephone call last night, or at least——
The Deputy is very well informed.
Does he know the subject of the telephone call?
No. Deputy O'Connor told me afterwards what it was about, but I did not know at the time.
I was discussing with him the fact that I thought he would have been, like any good Shamrock Rovers supporter, at the Shamrock Rovers-Bohemians match. However, being a very good local Deputy, he was where he should have been.
Like the rest of the Minister's colleagues, he is in such a state of fright that he cannot take time off to go to a football match anymore.
The Deputy is well informed. I must watch out, as my telephone may be tapped. The Deputy did tell me it was a difficult meeting.
It certainly was. I do not know what the cure is, but the extent of anti-social behaviour in certain parts of the city — although it is not confined to this city — is shocking. People are persecuted and harassed in their homes. In the case of one African man, it seems to be a case of pure racism, but in others, older women who have been living in the community for up to 30 years are being tortured in their homes. The number of break-ins is phenomenally high, but the Garda does not have the resources to patrol the area. It is a serious problem.
I accept what the Deputy says. To return to the issue of house rules, however, section 20 defines what they should and should not do, with the objective of "enhancing the quiet and peaceable occupation of units generally in the development". Ultimately, given the fact that the house rules are normally a mirror image of the covenants and conditions with regard to the peaceful enjoyment of the property, they are enforceable under these covenants and conditions. That is the reason we have provided for mediation — in order that people do not have to go to court at great expense. While we would all like people to enjoy and have peaceful occupation of their units in multi-unit developments, I suggest that establishing the local authority as the watchdog and policeman would bring the law into disrepute soon after its enactment because local authorities would not have the ability to go in and solve every dispute about whether house rules had been breached.
As we need to move on, I will withdraw the amendment.
Before that, Deputy Flanagan would like to make a point.
Would the Minister be open to introducing an amendment to empower owners' management companies to issue fines or penalties against apartment owners who are causing problems or harassing other apartment owners?
We have gone as far as we can in subsection (10) which states: "The owners' management company of the development concerned may recover the reasonable costs of remedying such breach from such person which costs may be recovered as a simple contract debt". In conferring on the owners' management company the ability to exact fines one would be giving them significant power.
It could be referred to dispute resolution.
A fine can only be levied by a court. If owners' management companies had the power to levy fines against every apartment owner for this and that, there would be complete chaos. In a particularly difficult apartment block the owners' management company could be accused of being overly — without an independent adjudication——
The best option would be to go to court and recover the costs based on a debt.
I do not think the Deputy's suggestion is constitutionally permissible. The power to levy fines and impose sanctions could not be given to an owners' management company unless there were by-laws in that regard.
I do not think it could, even if there were such by-laws.
Therefore, there is no point in our holding that out as a solution, which means a person will still end up having to take his or her neighbour to court under the Bill, as it stands.
The owners' management company would take the neighbour to court.
Yes. That is what I mean. That is just not practical in 98% of cases. It is a real problem because some developments were not built to the highest standards of craftsmanship and it is a nightmare if one is living next door to the neighbour from hell. It is difficult to deal with it.
How stands the amendment?
I will have a look at it before Report Stage.
The problem of neighbours from hell does not arise only in multi-unit developments.
Amendment, by leave, withdrawn.
Amendments Nos. 40 and 41 are related and may be discussed together.
I move amendment No. 40:
In page 18, subsection (4), line 4, to delete "House rules" and substitute "Subject tosubsection (8), house rules”.
These amendments are designed to ensure the owners' management company of a new development will be allowed to make house rules governing the operation of a development prior to the sale of the units. This will allow potential purchasers to have sight of any such rules before concluding a contract to buy an apartment in the complex.
Does that mean that, although house rules may be compiled, it is an entirely voluntary regime and that if one wants to enforce a rule in the face of a breach, one will ultimately have to go to the District Court?
The owners' management company will go to the District Court to recover the costs of remedying the breach.
The apartment owner would not go to court.
I do not think so. All of these matters will be dealt with by mediation or under the law on nuisance.
Amendment agreed to.
I move amendment No. 41:
In page 18, between lines 14 and 15, to insert the following subsection:
"(8) Notwithstandingsubsections (4) to (6), in the case of a multi-unit development to which section 3 applies, house rules may be made by the owners’ management company before the completion of the sale of the first unit in the relevant part of the development, and in such event the first purchaser of each unit in the relevant part of the development shall be given a copy of such house rules on or prior to the completion of the sale of the unit unless prior to that day other house rules have been made in accordance with this section.”.
Amendment agreed to.
I move amendment No. 42:
In page 18, between lines 32 and 33, to insert the following subsection:
"(11) House rules shall have due regard to environmental considerations and in particular may not prohibit air drying of laundry.".
I shall have to take advice from dry cleaners on this one and will return on Report Stage.
Amendment, by leave, withdrawn.
Section 20, as amended, agreed to.
SECTION 21
Amendment No. 43 ruled out of order.
Amendments Nos. 44 and 49 to 51, inclusive, are related and may be discussed together.
I move amendment No. 44:
In page 18, subsection (2), lines 42 and 43, to delete "whether or not mediation has been attempted." and substitute the following:
"whether or not mediation or other dispute resolution process has been attempted.".
I have stated on many occasions I am in favour of forms of dispute resolution being used as alternatives to costly and time-consuming court proceedings. This Bill makes substantial provision for a particular form of mediation but does not preclude other forms of dispute resolution such as arbitration and expert determination both of which are used in construction projects. With this in mind, I table amendment No. 44 to make it clear that an applicant under section 21 must indicate in his or her application to the Circuit Court not only whether mediation has already been attempted but whether any form of alternative dispute resolution process has been engaged in.
Amendments Nos. 49, 50 and 51, tabled by Deputy Rabitte, are lengthy and are intended to replace sections 24 and 25 in their entirety. The intention appears to be to allow the parties to have recourse to other forms of alternative dispute resolution. However, as I stated in regard to amendment No. 40, nothing in the Bill precludes the parties from engaging in any other form of alternative dispute resolution before the matter comes to court. When the matter comes before the District Court the court may, of its own motion or at the request of any party or at any time, direct the parties to take part in a formal process of mediation set out in sections 24 and 25. Therefore, I do not see any pressing need to extend the Bill's provisions beyond the court overseeing of the mediation process.
Does Deputy Rabitte wish to speak? We are discussing three of his amendments.
I am happy to accept the Minister's amendment and will review it on Report Stage.
Amendment No. 44 agreed to.
I move amendment No. 45:
In page 19, subsection (4), between lines 26 and 27, to insert the following:
"(f) determining the extent to which a part of the common areas of a development forms part of the relevant parts of the common areas of the development;”.
Amendment agreed to.
I move amendment No.46:
In page 20, subsection (4), between lines 15 and 16, to insert the following:
"(m) providing that house rules be lodged with the relevant local authority and giving the local authority power to annul house rules or any provision thereof if such rules interfere unreasonably with the rights of an owner of a unit.”.
We debated this issue but I am still worried that there is no arbitor short of going to court for breach of house rules. I maintain my scepticism and believe that in some cases they will not be capable of being enforced given there is no mention of a referee.
We are still unclear about the purpose and intent of this amendment. It appears, first, to provide that the Circuit Court may make an order requiring the lodgment of house rules with the local authority and, second, the same court order may give the local authority power to annul the rules if they interfere unreasonably with the rights of an owner. Normally it would be a matter for a court to decide whether the individual rights have been infringed. I do not understand, therefore, the idea of a court giving a local authority the power to annul a rule if it infringes such rights. The amendment appears to be aimed at giving or transferring a court-like jurisdiction to a local authority to adjudicate on an individual's rights. I do not accept that.
How stands the amendment?
I am somewhat puzzled by the Minister's interpretation. I do not see where the amendment drags in the Circuit Court or any court. It is purely a routine administrative matter. In any event, the same argument applies as those we had earlier regarding the local authority. Clearly, the Minister is not of a mind to take it on board so there is no point in my persisting with it.
I will clarify that. One has to read the entire subsection 3 which states: "where the court is satisfied it shall make such remedial order". The court to which this section applies is the Circuit Court.
Yes, but I had thought it was an independent stand-alone matter.
Amendment, by leave, withdrawn.
I move amendment No 47:
In page 20, between lines 21 and 22, to insert the following subsection:
"(6) Service on an owner at the last address provided by him or her shall be deemed to be good, and in particular service at the address furnished undersection
8(3) shall be good unless he or she has subsequently furnished the OMC with a different address for service.”.
Amendment, by leave, withdrawn.
I move amendment No. 48:
In page 20, after line 48, to insert the following subsection:
"(8) Notwithstandingsubsection (1), and subject to subsections (2) and (5), where the court is satisfied that the structure of the voting rights of members in an owners’ management company is not established on a fair and equitable basis, the court may, where it is satisfied that it is necessary in the interests of justice to do so, make an order altering the voting rights of members in the owners’ management company concerned.”.
Amendment agreed to.
Section 21, as amended agreed to.
Sections 22 and 23 agreed to.
SECTION 24
I move amendment No. 49:
In page 21, before section 24, to insert the following new section:
24.—(1) (a) Upon the request of any party to an application under section 23, the court may at any stage during the course of the proceedings (including immediately after the issue of the proceedings), if it considers that an Alternative Dispute Resolution Procedure pursuant to a direction under this subsection would assist in reaching a resolution of the matter, direct that the parties to the application meet to discuss and attempt to settle the matter by an Alternative Dispute Procedure.
(b) A procedure held pursuant to a direction under this subsection is in this Act referred to as an “Alternative Dispute Procedure”.
(2) Where the court gives a direction undersubsection (1), each party to the application concerned shall comply with that direction.
(3) An Alternative Dispute Procedure shall take place—
(a) at a time and place agreed by the parties to the application concerned, or
(b) where the parties do not agree a time and place, at a time and place specified by the court.
(4) There shall be a chairperson of the Alternative Dispute Procedure who shall—
(a) be a person appointed by agreement of all the parties to the application concerned, or
(b) where no such agreement is reached—
(i) be a person appointed by the court, or
(ii) a person nominated by a body prescribed, for the purpose of this section, by order of the Minister.
(5) The notes of the chairperson of an Alternative Dispute Procedure and all communications during a mediation conference or any records or other evidence thereof shall be confidential and shall not be used in evidence in any proceedings whether civil or criminal.
(6) The costs incurred in the holding and conducting of a mediation conference shall be paid by the party to the application in such proportion as the Chairperson shall decide, or as the court hearing the action shall direct.".
Amendment put and declared lost.
Section 24 is opposed by Deputy Rabbitte. Does he wish to add anything?
No. I am happy to withdraw.
Section 24 agreed to.
NEW SECTION
I move amendment No. 50:
In page 22, before section 25, to insert the following new section:
25.—(1) The chairperson of the Alternative Dispute Procedure shall prepare and submit to the court hearing the application undersection 23 a report, which shall set out—
(a) where the procedure did not take place, a statement of the reasons as to why it did not take place, or
(b) where the procedure did take place—
(i) a statement as to whether or not a resolution has been reached in respect of the application, and
(ii) where a settlement or determination has been entered into, a statement of the terms of the settlement signed by the parties thereto or terms of the determination, signed by the Chairperson, as applicable.
(2) A copy of a report prepared undersubsection (1) shall be given to each party to the application at the same time as it is submitted to the court under that subsection.
(3) At the conclusion of the hearing of an application undersection 23, the court may—
(a) after hearing submissions by or on behalf of the parties to the application,
and
(b) if satisfied that a party to the application failed to comply with a direction under section 24(1)*, make an order directing that party to pay the costs of the application, or such part of the costs of the application as the court directs, incurred after the giving of the direction under section 24(1)*.”.
Amendment, by leave, withdrawn.
Section 25 agreed to.
NEW SECTION
I move amendment 51:
In page 22, before section 26, to insert the following new section:
26.—(1) The Minister may make regulations providing for any matter of procedures, including Alternative Dispute Procedures in relation to applications undersections 24 and 25 and making such incidental, consequential or supplementary provision as may appear to him or her to be necessary or proper to give full effect to any of the provisions of section 24.
(2) Without prejudice to the generality ofsubsection (1), regulations under this section may—
(a) specify the time at which applications under section 24 may be made, the manner in which those applications shall be made and the particulars they shall contain,
(b) require applicants to furnish to the court any specified information with respect to their applications (including any information regarding any estate or interest in or right over land),
(c) require applicants to submit to a court any further information relevant to their applications (including any information as to any such estate, interest or right),
(d) require the production of any evidence to verify any particulars or information given by any applicant,
(e) require the notification (in a prescribed manner) by planning authorities of decisions on applications, and
(f) set out Alternative Dispute Procedures, and mechanisms for procedure selection in default of agreement between the parties, including a schedule of nominating authorities of Chairperson of the Alternative Dispute Procedure in default of agreement. Such Alternative Dispute Procedures may include; mediation, conciliation, arbitration, expert determination and stepped procedures (limited to two steps).”.
This is connected to amendment No 50. There is no point in my pressing it now but I shall return to it on Report Stage.
Amendment, by leave, withdrawn.
Section 26 agreed to.
SECTION 27
I move amendment No. 52:
In page 23, between lines 36 and 37, to insert the following subsection:
"(5) In this section "prescribed" means prescribed by regulations made by the Minister with the consent of the Minister for Enterprise, Trade and Innovation.".
This drafting amendment is self-explanatory.
Amendment agreed to.
Section 27, as amended, agreed to.
SECTION 28
I move amendment No. 53:
In page 23, subsection (2), line 45, to delete "On completion of a multi-unit development" and substitute the following:
"Where the development stage of a multi-unit development has ended".
Amendment agreed to.
Section 28, as amended, agreed to.
Section 29 agreed to.
SECTION 30
I move amendment No. 54:
In page 24, lines 13 and 14, to delete "Minister for Enterprise, Trade and Employment" and substitute "Minister for Enterprise, Trade and Innovation".
This is a drafting amendment to reflect the change to the Minister's title.
Amendment agreed to.
Section 30, as amended, agreed to.
Section 31 agreed to.
In regard to section 31 should the Bill not be effective immediately rather than allow the Minister the powers to introduce different sections at different times? The Minister might provide the background to that.
We will make an order as soon as possible after the enactment of the legislation. There are number of issues we have to deal with in order to prepare people with the legislation once it is passed. I will give an undertaking that we will commence it. There will not be a delay.
It is very urgent at this stage.
We accept that. We want the Bill passed as quickly as possible. There will not be a delay on our part.
Question put and agreed to.
NEW SECTIONS
Section 55 is a new section in the name of Deputy David Stanton.
I move amendment No. 55:
In page 24, before Schedule 1, to insert the following new section:
32.—(1) The management body shall be responsible for fire safety and compliance with all relevant fire safety regulations.
(2) In this section "management body", in relation to a multi-unit development, means—
(a) that the company or unincorporated body—
(i) which is formed with the intention that its members should be the owners of the properties in the development, and
(ii) which manages all or some of the common areas of the development,
and
(b) any person who manages the common areas referred to in paragraph (a) at any time before the company or unincorporated body referred to in that paragraph starts to manage such common areas, including the developer, or his or her agent, of the multi-unit development.”.
Fire safety is not adequately dealt with in the Bill. At the end of the day, people's lives are at risk. There are a number of apartment blocks in my complex which are not up to adequate fire safety standards. There have been no inspections by the local authorities, yet every year before any licensed premises can renew its licence a report must be done by a fire prevention officer to ensure that the building complies with fire regulations. If the Minister is taking the issue of the renewal of licenses seriously, he has to take it seriously in regard to apartment complexes. It is an area about which we cannot be complacent.
A lot of apartment complexes were not built to the proper standard. There is a lack of fire safety equipmentin apartment blocks. Enforcement should be a deterrent but it is not taking place. If the Minister is serious about the safety of people living in apartment blocks he would take this issue seriously and add in the new section which addresses the issue of fire safety.
Under the Building Control Acts and regulations a fire safety certificate must be issued in respect of every multiunit development prior to the commencement of construction and building must be constructed in accordance with that certificate. Building control regulations prescribe a number of technical standards, in particular in the areas of safety and access. As for planning conditions, non-compliance is an offence and local authorities are responsible for enforcement. They have substantial powers of enforcement, including the issuing of enforcement notices requiring such remedial works as are deemed necessary to bring the building into compliance with building regulations. The overall policy in regard to fire safety resides with the Minister and the Department of the Environment, Heritage and Local Government. We have brought the Deputy's proposals that developments be inspected before occupation to the Minister's attention. Apart from the requirements of the building control legislation, the provisions of the Fire Services Acts 1981 and 2003 also apply under the code. The provision of a fire certificate, including giving advice regarding fire safety, is a matter for the 37 fire authorities in the first instance.
Section 18(2) of the Fire Services Act places a duty on persons in control of buildings which contain apartments to take all reasonable measures to prevent the occurrence of fires and to ensure, as far as is reasonably practicable, the safety of the occupants in the event of a fire occurring in the premises. In an apartment complex these duties may be shared between the owners of units and the management company which is usually responsible for the maintenance of the building and common areas.
Fire safety management includes the maintenance of the building fabric as well as all fire safety devices within the building, including for example fire detection, alarm systems, emergency lighting, ventilation systems, fire doors and firefighting facilities. In addition, maintenance of escape routes, keeping escape corridors clear of obstruction, waste management, building and site access and egress, together with fire safety instructions and evacuation plans and drills, are necessary along with arrangements for response and procedures in the event of fire, emergency or operation of systems such as fire detection alarm systems.
Section 18(3) of the Fire Services Act provides that it is the duty of every person on a premises to conduct himself or herself in such a way as to ensure that, as far as is reasonably practicable, no person on the premises is exposed to danger from fires as a consequence of his or her actions. As regards ongoing fire safety within multiunit developments, section 15(2)(h) of the Bill requires that the owner or management company include in its annual report to the annual general meeting of the residents a statement setting out in general terms the fire safety equipment installed in the development and the arrangements in place for the maintenance of such equipment.
I am not happy with that, Minister. The whole area of compliance certificates and inspection certificates, not just the inspection of buildings, is not good enough. Lives are at risk. There are a number of apartment complexes where fires were started in the basement car parks or bins or cars has been set on fire. Luckily, such fires did not spread. However, having had some fire consultants examined some premisesand the materials used in their construction it was found that it was just luck that these fires did not grow any bigger and result in a loss of life. It is an issue which has to be central to this Bill. It is not being taken seriously enough. Management companies have to be made responsible for compliance in this area and that is not currently pinned down. For instance, if management companies are not complying with the law as it stands all of the owners of the apartments are served with notices. A management company has to be the body that is ultimately responsible for fire compliance.
I accept that fire safety is absolutely vital for these premises, as indeed it is for all premises. Ultimately, this is an issue for the Department of the Environment, Heritage and Local Government and the fire service in their respective areas.
Unfortunately, they are failing the people at the moment.
The Deputy should consider the practicality of the situation. He is trying to make the management company liable. Who in their right mind would become a director of such a company if he or she would ultimately be held responsible, which they would be?
Such people are responsible for the running of the management company. They need to ensure that the money is being spent to ensure that the building is safe.
How can anyone be responsible for a potential disaster that might happen? Ultimately, one has to leave the responsibility to the owners of the individual premises and if there is a danger which is caused by the owner, he or she will be responsible. Nobody would want to be in an owner or a management company. The owner management company is the representative of the owners. Therefore the directors are also the owners.
They need to ensure that the service fee is being used to ensure that the building is fire compliant and that the residents are safe in the building.
One would get nobody to be a director if he or she found out that he or she could potentially be liable.
The system is failing as it is and has to be tightened up.
Ultimately, it is a matter of enforcement by the local authorities and the fire service. I accept it is a very serious issue and should be dealt with. That is why I said I have brought the deputy's proposals to the attention of the Department of the Environment, Heritage and Local Government in order that in any review of the legislation is carried out the issue can be examined intensely, given the fact that we now have a very comprehensive piece of legislation which deals with other aspects of multiunit developments.
Is the amendment being pressed?.
Amendment put:
The Committee divided: Tá, 4; Níl, 9.
Tá
- Flanagan, Charles.
- Flanagan, Terence.
- Naughten, Denis.
- Shatter, Alan.
Níl
- Ahern, Dermot.
- Aylward, Bobby.
- Blaney, Niall.
- Byrne, Thomas.
- Kenneally, Brendan.
- McGrath, Michael.
- O’Brien, Darragh.
- Rabbitte, Pat.
- Sargent, Trevor.
Amendment declared lost
Amendment No. 56 not moved.
SCHEDULE 1
I move amendment No. 57:
In page 25, between lines 3 and 4, to insert the following:
"1. Sections 2 to 4 (obligation to have owners' management company).".
The point here is to claim that a two, three or four unit development should still have a management company because otherwise the paragraphs of Schedule 1 do not make sense.
The amendment to Schedule 1 seeks to impose an owners' management company structure on developments with two or more but less than five units. I do not consider this to be necessary. In fact, the Law Reform Commission came to the same conclusion. I consider that the provisions of section 2(1) and Schedule 1 are adequate for small developments. Schedules 2 and 3 will be examined again before Report Stage in the light of comments received by my Department and this may lead to some minor amendments.
It is not that I am anxious that developments of that size should have an owners' management company, it is just that it appears the existing paragraphs in the Schedule do not make sense as it stands. However, I am happy to have the Minister look at the matter before Report Stage. It is not an issue to which I am wedded.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
SCHEDULE 2
Question proposed: "That Schedule 2 stand part of the Bill."
I raised certain questions on Schedule 2 in the context of another discussion. As I understand it — the Minister will correct me if I am wrong — traditional multi-unit developments will not enjoy the benefits of certain sections of the Bill. It is contended that many of the provisions from which they are excluded are equally relevant to traditional multi-unit developments. Therefore, it is not clear why only certain provisions of the Bill apply and others do not. Such developments are just as likely to have common areas and so on.
I have said I will look again at Schedule 2. Some comments have been made to the Department in this respect. If there is anything specific the Deputy considers should be included, obviously he can bring it to our attention or table an amendment on Report Stage.
Question put and agreed to.
Schedule 3 agreed to.
Title agreed to.
Bill reported with amendments.
I thank the Minister and his officials for attending and members of the committee for their co-operation.
