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Dáil
‹ Leaders’ Questions.

Management companies in housing estates

Summary

Higgins says homeowners, especially in new estates, were forced into management companies that can leave them facing fees and legal uncertainty; he asks what help the Government will provide. The Taoiseach says local authorities have begun addressing the issue and that departments are examining whether legislation can offer a remedy.

A full 12 months have passed since Deputy Catherine Murphy and I first raised in Dáil Éireann the novel phenomenon of management companies being forced on householders in new housing developments, which is especially hitting first-time buyers. We outlined how this was a scam to benefit developers and, depending on which services might be turned over to them, to bring about the possible privatisation of public services. We gave shocking examples of a barefaced rip-off involving no less than six management companies running 1,700 houses in Tyrellstown, leaving aside 400 apartments, which did not even take over public services but almost exclusively built its structure on the management of open air car parking spaces in the estate for which, unbelievably, €360,000 per year is being demanded from the unfortunate householders. It is a cash cow for the developers and the managing agents who take one third of that money each year. I recently exposed a barefaced swindle in Tyrellstown, where €17,000 per year was being demanded from the same householders in fees for public lighting. However, I have established conclusively that Fingal County Council met all the lighting and maintenance costs for the past five years.

Over the past year, the developers in that and other estates, masquerading as management companies, have been trying to drag dozens of householders into court to force them to pay fees which are being boycotted. Happily last Thursday, Judge Alan Mahon in the Circuit Court quashed a demand for management company fees on legal grounds, the important implications of which we are still studying.

The Taoiseach said, in response to the concerns expressed by me, Deputy Catherine Murphy and others, that management companies in housing estates were never envisaged, represented a major problem and an unnecessary cost, and were totally wrong and highly unfair, yet he has not lifted a finger to stop the practice. How serious was the Taoiseach, given that he was in Tyrellstown last Wednesday evening not to extend solidarity to hard-pressed residents, but to open a €40 million hotel for the very developer who is at the heart of the management company rip-off and who has been dragging householders through the courts? Local people who tried to attend the bash were turned away from their supposedly local hotel.

When will the Taoiseach introduce legislation to control management companies for apartment owners and what will he do to quash the ones that exist for thousands of householders who are now caught in a legal nightmare not of their making?

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Deputy Joe Higgins knows I have considerable sympathy for the arguments around this and I think he also knows I met the group he mentioned at the bash in Tyrellstown, when it raised the points made by the Deputy. I met similar groups in other places. Three things have happened since then. Two weeks ago I reported to the House that the Minister for the Environment, Heritage and Local Government, Deputy Roche, met all the county managers earlier this summer and at the beginning of the year——

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They are still making it a condition of planning permissions.

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——regarding the procedures that were being operated in each of the councils. From what Members said during that debate, a number of those initiatives have been successful in terms of getting coherence in what local authorities do and how they treat housing developments, whether apartments or estates. I have previously made the point that these management companies were intended in the first instance for controlled small apartment blocks. They were not meant for residential housing estates. The Minister has made significant progress with a number of local authorities with regard to implementing the procedures as they were originally envisaged.

The Director of Consumer Affairs recently produced a detailed report in this regard which highlighted issues the Government will have to examine. That examination will be done in the Departments of Justice, Equality and Law Reform and the Environment, Heritage and Local Government. Whether a legislative proposal or other solution will have to be brought forward will be decided shortly, but a lot of the procedures and operational issues which were arising in local authorities do not require legislation. They can be dealt with by the management and I understand from the Minister and his officials that is being done. I will revert to the House when the report of the Director of Consumer Affairs has been examined and a question to the Tánaiste or the Minister for the Environment, Heritage and Local Government will receive a more detailed response on the position with regard to the examination of the report.

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Apartment owners need a new, simple, democratic and co-operative structure to manage their units. Happily, since Deputy Catherine Murphy and I raised the matter in the Dáil and turned it into a national issue, the local authorities have begun to put a block on this being included as a condition, which represents progress. However, some tens of thousands of householders have been caught in the management company scam in the intervening twilight years, a period of four to five years. They are tied up legally, with the deeds of their houses tied up into the scam, which should never have happened. The Government and local authorities have a key responsibility to those householders. The Government needs to provide the legal means whereby this completely unnecessary structure is taken off the back of those householders.

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Rory O'Hanlon An Ceann Comhairle Fianna Fáil

The Deputy's time has concluded.

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Judge Mahon's judgment in the Circuit Court had the benefit of stripping away the fig leaf. He said the developers should have pursued the householders and not the management company, because the so-called common areas had not been handed over. In other words, it is really the developers who are behind this matter. What will the Taoiseach do for the thousands stuck in this legal limbo? Did the Taoiseach ask the Larkins of Twinlite to stop pursuing the residents who made them such a fortune in buying their homes in Tyrrelstown and in other areas?

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I thank the Deputy for acknowledging the local authority effort and what the Minister is doing. Based on the present report of the Director of Consumer Affairs, we will see if there is a legislative mechanism to deal with this issue. It is under examination in both the Department of the Environment, Heritage and Local Government and the Department of Justice, Equality and Law Reform. I do not know if there is an easy legal remedy, but I understand clearly the point that is being made by many groups regarding the period in which they were caught. I am not sure where that examination is in the Department of the Environment, Heritage and Local Government — the Deputy can table a question to the Minister. We will see if there is a legislative way to deal with it because I understand the difficulties it has created for several thousand people. I am not sure if it is that enormous a number, but it certainly covers quite a sizeable number.

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