Property Management Companies What’s Changed……

Multi-Unit Developments Act 2011

The Multi-Unit Developments Act 2011(‘the Act’) has been enacted since 1 April 2011. Before this developers had significant flexibility in the structure adopted for a multi-unit development.

The Act provides a new legal framework for multi-unit developments (whether mixed use or residential only) that contains at least 5 residential units with shared amenities, facilities and services. The legislation also applies to housing estates which have owners’ management companies.

The main provisions of the act are as follows:

1) Strict timeframes to apply for transfer of common areas

Common areas must be transferred to the owners’ management company before the first residential unit is sold. Existing developments where there has been no transfer to the owners Management Company the transfer should have been made within 6 months of the establishment of the Act - that is by 30 September 2011.

2) Establishment of sinking fund

If no sinking fund has been set-up, this fund must be established within 18 months of the enactment, that is by 30 September 2012 at the latest.

3) Voting rights

For residential developments one vote generally attaches to each residential unit. In relation to mixed-use developments, other voting arrangements can apply but they must be fair and equitable.

4) Dispute resolution and mediation

New Circuit Court jurisdiction has been established to deal with disputes between parties. However, the Court may require the parties to engage in a mediation process if they have not already done so.

The Act also deals with important changes in relation to;

  • annual meetings,
  • contents of annual reports,
  • annual service charge, and
  • restoration to the registration of companies.

 In Summary;

There is continually more focus on the operation of management companies and there will be more sanctions in the courts for the incorrect management of these. Currently 500,000 people reside in properties attached to management companies.

Where common areas should have been but have not yet been transferred you should act immediately to start the process. To discuss further please contact Mark Butler or Maura Duffy.

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