APARTMENT OWNERSHIP UNDER THE MULTI- UNIT DEVELOPMENTS (MUD) ACT 2011 AN OVERVIEW

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1 APARTMENT OWNERSHIP UNDER THE MULTI- UNIT DEVELOPMENTS (MUD) ACT 2011 AN OVERVIEW

2 Dating back to 1895, the Society of Chartered Surveyors Ireland is the independent professional body for Chartered Surveyors working and practicing in Ireland. Working in partnership with RICS, the pre-eminent Chartered professional body for the construction, land and property sectors around the world, the Society and RICS act in the public interest: setting and maintaining the highest standards of competence and integrity among the profession; and providing impartial, authoritative advice on key issues for business, society and governments worldwide. Advancing standards in construction, land and property, the Chartered Surveyor professional qualification is the world s leading qualification when it comes to professional standards. In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining the Chartered Surveyor qualification is the recognised mark of property professionalism. Society of Chartered Surveyors Ireland 38 Merrion Square, Dublin 2, Ireland Tel: (0) info@scsi.ie Members of the profession are typically employed in the construction, land and property markets through private practice, in central and local government, in state agencies, in academic institutions, in business organisations and in non-governmental organisations. Members services are diverse and can include offering strategic advice on the economics, valuation, law, technology, finance and management in all aspects of the construction, land and property industry. All aspects of the profession, from education through to qualification and the continuing maintenance of the highest professional standards are regulated and overseen through the partnership of the Society of Chartered Surveyors Ireland and RICS, in the public interest. This valuable partnership with RICS enables access to a worldwide network of research, experience and advice.

3 SIOBHAN O DWYER Chair of the Property and Facilities Management Professional Group of the SCSI Chairman of O Dwyer Property Management Society of Chartered Surveyors Ireland 38 Merrion Square, Dublin 2, Ireland Tel: (0) info@scsi.ie

4 AGENDA Introduction Background Application General Scope What it means to Consumers Q & A

5 INTRODUCTION New Legal framework - 1 st April 2011 Seeks to address: Problems relating to the ownership and management of Common Areas To facilitate fair and effective management of OMC s To provide for related matters

6 BACKGROUND THE NEED FOR REFORM 1. New form of Housing 2. Limited Legal framework - Conveyancing and Estate documentation 3. Completion and Handover 4. Regulations for the Owners Management Company (OMC) 5. Compliance deficiencies 6. Limited enforcement 7. Managing Agent Profession not developed or regulated 8. Booming economy 9. Limited public comprehension 10. Adverse media 11. Public complaint

7 WHO IS IT APPLICABLE TO? Existing and future Multi-Unit Developments (MUD s) MUD s with not less than 5 units with shared amenities Mixed-Use Developments MUD s including commercial units Private housing estates which have an OMC structure

8 GENERAL SCOPE: KEY AREAS OF THE ACT 1. Obligations for the Transfer of Common Areas by the Developer to the OMC 2. Obligations of the Developer upon Completion 3. Remedial Mechanisms for dealing with disputes 4. Regulations, rights and obligations of the OMC A. OMC Governance and Reporting B. Service Charges C. Sinking Fund D. Fire Safety E. House Rules

9 1. DEVELOPERS OBLIGATION TO TRANSFER OWNERSHIP OF COMMON AREAS Developers must transfer ownership of common areas in: i. Future MUD s before the sale of any unit ii. Existing MUD s - within 6 months (by 30 th September 2011)

10 2. OBLIGATIONS OF THE DEVELOPER UPON COMPLETION Delivery of a schedule of documentations for the estate including: 1. Certification of Compliance 2. Safety File 3. As built service drawings 4. O & M manuals for plant and equipment 5. Warrantees and guarantees 6. Test records for drainage, water pipe and heating pipe work 7. Title documents for the estate and OMC statutory books 8. Stamped & registered counterpart Leases

11 3. NEW REMEDIAL / DISPUTE MECHANISMS Enforcement of any obligation under the Act Circuit Court - Mediation OMC may represent owners collectively Struck off OMC s period extended from 1 to 6 years

12 4A. NEW REGULATIONS, RIGHTS & OBLIGATIONS - GOVERNANCE AND REPORTING Equal voting rights (1 unit = 1 vote) Maximum 3 year term for Directors Greater responsibility on OMC Directors 1. Ensure adequate funding for maintenance and management 2. Ensure value selection and delivery of services (Max. 3 year contracts) 3. Reporting and consultation with owners A. Annual Report and AGM - statements of the Assets & Liabilities, the Sinking Funds, including details of the basis and calculation of the annual contribution, the Annual Service Charge and the details and basis of calculation. Details of any Planned Expenditure on refurbishment, improvement or maintenance intended to be carried out B. A statement of the insured value, details of the premium, the insurer and a summary of the principle risks covered C. A statement setting out the fire safety equipment installed and the arrangements in place for maintenance

13 4B. NEW REGULATIONS: SERVICE CHARGES Developer must establish a Scheme for the Annual Service Charges Sets the initial charge and must disclose details to purchasers Charges must be transparent and fair - Details and Categories (breakdown) of expenditure must be outlined in a budget Circulated and approved at a general members meeting annually All owners legally obliged to pay (including Developers for unsold units) Unpaid Service Charges simple contract debt Funds must not be used to defray developers expenses Proper records of expenditure (auditing)

14 4C. NEW REGULATIONS: SINKING FUND Mandatory Sinking Fund to provide for long term maintenance and to allow for future refurbishment / renovations OMC entitled to retain professional advice to determine the annual contributions (The Act stipulates 200 or such other agreed sum) All owners must pay developers for unsold units In existing developments: by Sept if not already in place In future developments: within 3 years of the sale of the first unit Separate bank account

15 4D. NEW REGULATIONS: FIRE SAFETY In Future New Developments: Developer must provide certificate of compliance with the Fire Safety Certificate Suitably qualified person Assurance prior to occupation In Existing Developments: OMC responsible for managing fire safety systems Typical fire safety installations include: Fire Detection and Alarm System, Emergency lighting, Exit Signage, Fire extinguishers, Fire Hose Reel, Dry/Wet Risers, Smoke Ventilation, Fire Doors, Fire Stopping A Fire Safety Register and maintenance programme must be maintained Confirmed as part of the Directors Annual Report to the OMC

16 4E. OBLIGATIONS OF THE OMC: HOUSE RULES New house rules may be made Consistent/fair and reasonable Circulated in advance and approved by the members at a General Meeting Landlords must oblige their tenants to observe the house rules Costs of remedying a breach may be recovered

17 NEW REGULATION Property Services Regulation Act Licensing and regulation of Managing Agents

18 WHAT ALL THIS MEANS FOR THE CONSUMER REPORTING SINKING FUND SERVICE CHARGES HOUSE RULES

19 THANK YOU!

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