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Property Management Companies

Dáil Éireann Debate, Wednesday - 24 March 2021

Wednesday, 24 March 2021

Questions (1235, 1270, 1273)

Cormac Devlin

Question:

1235. Deputy Cormac Devlin asked the Minister for Justice the procedures in place under the Multi-Unit Developments Act 2011 to deal with the letting agents and companies that fail to either transfer rent collected from tenants, fail to deal with maintenance issues in properties or that do not comply with the agreement with the owner of the property; her plans to review and improve the legislation in this area; and if she will make a statement on the matter. [14575/21]

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Róisín Shortall

Question:

1270. Deputy Róisín Shortall asked the Minister for Justice the recourse available to an apartment owner when their owners’ management company has not provided them an adequate response to concerns regarding possible structural issues in their apartment block; and if she will make a statement on the matter. [15425/21]

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Duncan Smith

Question:

1273. Deputy Duncan Smith asked the Minister for Justice if consideration is being given to reform of the Multi-Unit Development Act 2011; if so, the timeline for same; and if she will make a statement on the matter. [15500/21]

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Written answers (Question to Justice)

I propose to take Questions Nos. 1235, 1270 and 1273 together.

In the Programme for Government, the Government has committed to conduct a review of the existing management company legislation.  My department will engage with relevant departments in relation to advancing this matter.

The Multi-Unit Developments Act 2011 was enacted with the primary purposes of reforming the law relating to the ownership and management of common areas of multi-unit developments and facilitating the fair, efficient and effective management of owners' management companies (OMCs). 

These are companies registered under the Companies Acts, the members of which are the owners of residential units within the development and are established for the purposes of ownership and management of the common areas.

Insofar as the enforcement of any right conferred, or obligation imposed, by the Act is concerned, sections 24 and 26 provide that a person may apply to the Circuit Court for an order to enforce any such right or obligation.  Section 25 defines the persons who may apply for, or appear and be heard at, an application for a court order under section 24.  They include the developer, the OMC, an owner of a residential unit in the development (i.e. a member of the OMC) or such other person as the court sees fit.  The Court, if satisfied that a right has been infringed or an obligation has not been discharged, may make such remedial order as it deems appropriate in the circumstances with a view to ensuring the effective enforcement of the right or the effective discharge of the obligation in respect of the development concerned.  The Act also contains provisions which encourage the resolution of disputes that may arise between parties by means of mediation rather than recourse to court proceedings.

More generally, statutory provisions governing the regulation of companies, including those concerning the memorandum and articles of association, the appointment and responsibilities of directors and requirements for submitting annual financial returns, are set out in the Companies Acts.

The provision of property services to consumers in Ireland is subject to a detailed legislative framework of licensing, regulation, monitoring and enforcement, under the Property Services Regulation Act 2011. The Act also established the Property Services Regulatory Authority (PSRA), a statutory regulatory body specifically tasked with responsibility for licensing and regulating property services providers (auctioneers, estate agents, letting agents and property management agents).

The Act sets out certain standards and obligations that licensed property services providers must comply with aimed at ensuring protection for their clients, including an obligation, under section 43 of the Act, on every licensee to issue a letter of engagement to his or her client which must be signed by both parties within 7 working days of starting to provide a property service or agreeing to provide such a service. The Act sets out the minimum contents of a letter of engagement, including details of the services to be provided to the client, details of any fees or commission payable by the client and requirements in relation to the deposit of client moneys. Failure to comply with section 43 is improper conduct under the Act.

Furthermore, the Property Services (Regulation) Act 2011 (Minimum Standards) Regulations 2020 (S.I. No. 564 of 2020), which came into effect on 30 November 2020, set out a range of minimum standards to be observed in the provision of property services by licensees to their clients.  In accordance with these Regulations, where a licensee holds a security deposit, in relation to the letting of property, which is due to be paid to a client or returned to a tenant, the licensee is required to make such payment to the client or tenant as provided for in the letter of engagement or, if not so specified, not later than 10 working days after the day the tenant vacates the property, save in exceptional circumstances. Failure to comply with the standards set out in the Regulations amounts to improper conduct.

The PSRA is empowered to investigate complaints of improper conduct made against licensed property services providers, and to launch investigations on its own initiative for the purpose of ensuring compliance by property services providers with their statutory obligations. Where a finding of improper conduct is made by the PSRA, it can impose a range of sanctions: namely, issue a reprimand, warning, caution or advice, suspend or revoke a licence, or direct the licensee to pay a financial penalty (i.e. pay up to €50,000 into the Property Services Compensation Fund, up to €50,000 to the PSRA towards the cost of the investigation, up to €250,000 to the PSRA by way of financial penalty or any combination of the foregoing).

While my Department keeps the operation of the Property Services (Regulation) Act 2011 under review, I have no plans at present to amend the Act in the manner suggested by the Deputy.

Question No. 1236 answered with Question No. 1191.
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