The Minister for Justice and Law Reform, Mr Brendan Smith, has made an order bringing the Multi-Unit Developments Act 2011 into operation on 1 April 2011.
The primary purpose of the Multi-Unit Developments Act 2011 is to ensure the timely transfer of common areas of multi-unit developments to the owners’ management company which is made up of unit owners in the development. The Act also contains detailed provisions concerning the management and operation of owners’ management companies, including rules relating to the holding of annual general meetings; the calculation of service charges; the establishment of sinking funds and the making of house rules.
The legislation will apply to multi-unit developments containing residential units only and to mixed-use developments containing residential units. It will also apply to housing estates which have owners’ management companies.
Minister Smith said "implementation of the Multi-Unit Developments Act will, for the first time in Irish law, provide a comprehensive legislative framework for multi-unit developments. It represents a very significant step towards enabling apartment owners in multi-unit developments to take control of the common areas of the developments and to manage those areas for the benefit of all the residents. Detailed rules on calculation and apportionment of service charges (including an obligation on developers to pay service charges on all unsold units) and on establishment of a sinking fund will help to ensure the future sustainability of such developments. This legislation was a priority for the Government and I am pleased to have the opportunity to bring it into operation on 1 April next."
As regards new multi-unit developments, the Act requires that the common areas be transferred to the owners’ management company prior to sale of the first residential unit. In existing developments in which a residential unit has already been sold but the common areas have not been transferred by the developer to the owners’ management company, the transfer must be made within 6 months, i.e. before 30 September next.
Where no sinking fund has been established, such a fund must be put in place within 18 months i.e. by 30 September 2012 at the latest.
As regards voting rights in owners’ management companies, the general rule for residential developments is that one vote attaches to each residential unit. In mixed-use developments, other voting arrangements may apply as long as they are fair and equitable.
The Act establishes a new Circuit Court jurisdiction to deal with disputes between parties. However, if mediation or another form of dispute resolution has not already been attempted, the Court may require the parties to engage in a mediation process. Costs may be awarded against a party which does not engage in a meaningful way in such mediation.
The Minister has also made two sets of regulations for the purposes of implementing detailed provisions of the Act:
The Multi-Unit Developments Act 2011 (Section 3) (Prescribed Persons) Regulations 2011 specify the classes of persons who are suitably qualified to provide certification that a multi-unit development has been constructed in accordance with the Fire Safety Certificate issued pursuant to the Building Control Acts 1990 and 2007.
The Multi-Unit Developments Act 2011 (Section 30) (Prescribed form and fee) Regulations 2011 prescribe the form of application to be made and the fee to be paid to the Companies Registration Office in connection with the restoration of owners’ management companies to the Companies Register under section 30 of the Act.
The above Regulations and Explanatory Memorandum are published on the Department’s website – www.justice.ie
4 March 2011