Housebuyers paying "common area" service charges have been advised by TD Joe Higgins to scrutinise carefully their house purchase contracts and financial demands from estate management companies.
Mr Higgins, who was in the Circuit Court yesterday to witness what he described as a landmark decision affecting thousands of housebuyers, said they may be paying bills to companies who have no rights to demand any payment.
Judge Alan Mahon had just thrown out a claim by Tyrrelstown No 4 Management Ltd against Cletus Okonkwo, Curragh Hall Avenue, Tyrrelstown, Dublin, for service charges of €500.
He said there could be no doubt payment of service charges was essential and appropriate, both for occupants and developers as well as the area in general.
Judge Mahon said he had to deal with the matter before him on a legalistic basis as a claim for payment of a debt.
The defendant claimed the sum sought was not payable on the basis the proper plaintiff should have been the developer or vendor.
The judge accepted the service charge bill furnished to Dr Okonkwo, a psychiatrist at Portrane Hospital, was defective in that it had not adequately identified charges attributable to him for 2005/6.
Judge Mahon also agreed with Alistair Rutherdale, counsel for Dr Okonkwo, that the company, Tyrrelstown No 4 Management Ltd, had not, on the documentation before the court, been the correct plaintiff to sue for the payment of service charges.
While Tyrrelstown No 4 Management Ltd might well be the agent for the developer or vendor, this did not provide it with sufficient legal status to act as the plaintiff in the case, he said.
Mr Rutherdale had submitted that conveyancing documentation had stipulated that the vendor and the developer would transfer to the management company its interest in the common areas. This had not been done.
Mary O'Reilly, of FH O'Reilly and Co, solicitors, who acted for Dr Okonkwo, said after the judgment that there were a large number of housebuyers in the 2,000-unit Tyrrelstown development awaiting the outcome of the Okonkwo challenge.
Mr Higgins said afterwards that house purchasers were being subjected to what he considered was a rip-off management fee structure to produce a cash cow to save developers money.