The position is that 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 which are established for the purposes of ownership and management of the common areas.
The 2011 Act contains provisions relating to such matters as:
- the transfer of common areas to the OMCs (sections 4 and 5);
- the voting rights of members of OMCs (sections 14 and 15);
- the provision of annual reports by OMCs to members (section 17);
- arrangements for the holding of annual meetings to approve annual service charges (section 18);
- the establishment of a sinking fund to cover refurbishment outlays (section 19);
- arrangements for the making of House Rules (section 23); and
- the establishment of a court-based dispute resolution process (section 24).
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.
In relation to annual service charges I should point out that it is a matter for each individual OMC to determine the amount of the service charge on an annual basis. Section 18 of the Act requires OMCs to establish and maintain a scheme of annual service charges from which they may discharge expenditure incurred on the provision of common or shared services to the owners and occupiers of residential units in the development, including insurance, waste management and security services. The Act sets out clearly that the service charge must be calculated on a transparent basis, and be equitably apportioned between the residential unit owners. In order to ensure transparency and accountability, both the annual service charge and the services to be provided must be approved by a general meeting of the members of the OMC.