That leave be granted to introduce a Bill entitled an Act to amend the Multi-Unit Developments Act 2011 to transfer responsibilities to the Minister for Housing, Planning and Local Government, establish a sinking fund in year one of a development's transfer of ownership and to provide for other matters.
This Bill is part of a suite of measures that Fianna Fáil and I have brought forward to help those living in multi-unit developments. Specifically, it strengthens provisions for sinking funds in such developments. The Government may be aware that more than half a million people live in multi-unit developments and sinking fund money is supposed to be put aside for the essential maintenance of the properties and investment in matters such as fire safety and water infrastructure. I have tried to make that clear to the Government on numerous occasions. It may be interested to know that a survey by the Society of Chartered Surveyors Ireland found that the vast majority of apartment and multi-unit developments in Ireland have not set aside adequate funds for maintenance and refurbishment. My Bill seeks to simplify the situation and clarify for what the funds should be used.
I have referred to this issue as a ticking time bomb and raised it directly with the Minister, Deputy Eoghan Murphy, who has just left the Chamber, and the Minister of State, Deputy English, most recently on 14 November. They are of the view that the number of units that would be affected by the Bill is quite low. That is not the case. Fianna Fáil is trying to be constructive in bringing the Bill forward.
The Bill proposes four changes to the Multi-Unit Developments Act 2011 which currently sets out the legal requirements for sinking funds. Of most importance is that it would transfer the responsibility for that Act from the Department of Justice and Equality to the Department of Housing, Planning and Local Government, which is where it should be. It makes the establishment of a sinking fund mandatory within one rather than three years and makes sinking funds a separate part of annual financial statements. It mandates an overall sinking fund report on future plans every five years, which is crucially important.
Approximately 90% of developments are not providing for a sinking fund for future works that may be required. There are also many defective developments which have been abandoned by insurers and bondholders. The Bill will help to simplify the process. It ensures clear responsibility in regard to the prudent creation of a sinking fund for apartment blocks and multi-unit developments and the timely provision of information on the status of the fund. According to the Society of Chartered Surveyors in Ireland, which I thank for its work on this issue, three out of four property managers surveyed stated that less than 25% of apartment buildings and multi-unit developments have set aside adequate funds for such works. This is a massive issue for our country, affecting 200,000 homes and 500,000 people. In addition, almost 90% of the managers stated that they had been forced to raise additional levies for buildings under their management. It is clear that we need to strengthen the law in this sector, because as these apartment blocks and multi-unit developments get older, they will need more investment.
This sector has too often been forgotten. As I mentioned, more than half a million people live in multi-unit developments. The Government can do a lot more and that is why this is the third Bill I have published in this area. It is one of several measures proposed by Fianna Fáil. I have published a Bill to create an ombudsman under the auspices of the Property Services Regulatory Authority for owner management companies, of which there are approximately 7,000 in this country. That would assist the lay directors of such companies with legal advice and, at least, give them an office with which they could raise any issues.
Fianna Fáil has also published a Bill to recognise and provide for people who are paying management fees for their principal private residence as well as full local property tax. There ought to be a partial reduction in local property tax for those who pay management fees. That legislation proposes a maximum reduction of €300 in local property tax in that regard.
I hope that in the interests of co-operation, being responsible and waking up to the fact that this is a major problem, the Government will work with Fianna Fáil and other parties, as has been done on the Oireachtas Joint Committee on Housing, Planning and Local Government, to ensure that this Bill is passed quickly through the House. It will make a difference. It differs substantially from other legislation awaiting First Stage or Second Stage. I acknowledge that the Ceann Comhairle is working hard to ensure that Private Member's Bills such as this pass through the House.