Management companies for apartments to be regulated

THE GOVERNMENT is to publish legislation during the current Dáil session regulating management companies in apartment complexes, Minister for Justice Dermot Ahern told the House.

“I assure the House that the Government is determined to deal with the problems arising in this area urgently and in a very thorough and comprehensive manner,” he said.

Mr Ahern said that an interdepartmental committee was meeting regularly to review the issues raised in the Law Reform Commission’s consultation paper.

The committee would examine the commission’s final report, and a key task would be to identify the legislative and other actions to be taken and determine a timescale for their implementation.

The Minister was responding to a Fine Gael private members’ motion calling for the introduction of legislation.

Party environment spokesman Phil Hogan said that it was an important issue, which was concentrating the minds of many of the 500,000 people who lived in apartments and mixed developments in urban areas.

There were approximately 303,000 apartments in Ireland, including the 60,000 built since 2005, along with 4,600 management companies.

“The people most affected by these issues are young families and professionals purchasing their first home, as well as many newly arrived workers.

“They are facing possible negative equity, and the last thing they want is to pay management company fees at a time when mortgage rates have increased nine or 10 times in the past couple of years.” Mr Hogan said they wished to know if the service charge they had to pay was being spent properly or if it was being spent at all.

Olivia Mitchell (FG, Dublin South) said that the biggest threat to the value of apartment complexes came from owners who failed or refused to pay their management fee.

This placed a bigger burden on the other owners and gradually more and more would also refuse to pay, she added.

“Lack of maintenance, and the absence of a sinking fund to cater for large-scale external repairs, will quickly produce a spiral of degradation. Rundown and shabby apartment blocks are in nobody’s interest . . . [and] are hugely unfair to the majority of owners who do pay their fees.”

Terence Flanagan (FG, Dublin North East) said that apartment owners in his constituency were contacting his office daily, highlighting problems with their management companies.

Ciarán Lynch (Labour, Cork South Central) said that there was a management company crisis.

“Management companies are clearly not needed for housing estates, and while they do serve a function for apartment owners, the absence of legislation has led to . . . a rogue’s charter, with residents ripped off and finding themselves subject to management company charges indefinitely.”

Mr Lynch said there was an unregulated service industry charging almost €1,000 annually for a house and up to €2,000 annually for an apartment. The Government was guilty of a dereliction of duty, he added.