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The Multi Unit Development Act
A multi-Unit Development "means a development being land on which their stands erected a building or buildings comprising a unit or units and that A) as respects such units it is intended that amenities, facilities and services are to be shared and subject to the act the development contains not less than 5 residential units."
In plain English, a group of units (5 or more) which share amenities, services etc. The most common example would be that of an apartment block.
The Multi Unit Development Act was brought into Irish law on the 1st April 2011. It would seem to be very much a piece of legislation created to battle the numerous problems created from the mass development during the 'boom' years. As more and more estates were built, new laws were required to protect the residents. This legislation is also created to protect developers from a never ending connection with their building projects. Essentially the act governs the handing over of the common areas of an estate to an owners management company (OMC), and the procedures required to complete same. The deadline for transferring of these common areas under the act has since passed (30 September 2011). This creates a major problem for new estates (Where no new unit has been sold prior to the deadline date), as they will be unable to sell any units until such time the legislation is complied with, and the common areas transferred.
The act covers only estates where there are two or more properties, and can also include mixed use estates which include a mixture of residential units and commercial units. The act does not cover commercial only developments. There are three types of estates which are expressly defined in the act;
1. New developments Where no properties have been sold,(section 3)
2. Existing developments where a property has been previously sold (section 4)
3. Existing developments where over 80 % of the properties have been sold (section 5)
The requirements to be complied under the various sections above vary greatly with each other. For example, under the new development, where no units have been sold (section 3), the developer has numerous requirements imposed to include, setting up the management company, transferring the common areas to the management company, fire safety compliance, contract completion, confirmation re completion. Where as under a section 5 transfer, the developer must only produce the documents defined in schedule 3 of the act, being maintenance manuals, confirmation re planning conditions, etc.
It is very important to note that the OMC will require its members to be involved, as directors must be chosen. No party can be a director for over three continuous years, so a rotation system of directors would be advisable. Directors of the OMC will be subject to all the rules and regulations of company directors, and should seek full advice in relation to their duties prior to becoming a director.
An annual meeting must be held every year for all members of the OMC. Topics covered at this meeting would include agreeing on the annual service charge, agreeing the level of sinking fund to be paid per annum (under the act this level cannot go below €200 per annum), house rules, etc.
Any disagreements between the developer and the OMC prior to the transfer taking place, can be bright to the circuit court. This would include a scenario where there is no identifiable developer, or the developer does not assist in the transfer of the common areas. Mediation is also used in this regard. The developer and the OMC must have separate legal representation, to ensure that all parties are advised accordingly.
There are many further detailed issues associated with this act, all of which require full legal advices. it is important for all residents to take a proactive view of this act, and use same to assist them in creating a friendly, efficient and well run estate. Likewise with developers, this act must be embraced as quickly as possible, so that any issues which might arise can be dealt with without any disagreement or delay. Other interested parties would include lending institutions, liquidators and receivers. Compliance with the multi unit development act will grow in importance over the coming years.
William Clarke of our offices has acted for numerous residents, and developers in relation to the transfer of common areas in residential estates. If you had any questions in relation to any of the topics raised, please contact William on william@clarkejeffers.com.
Please note that these are guidelines only, and each separate transaction differs. As such, specific instructions must be provided along with the guidance of this article.
(c) Copyright 2011 William Clarke
William Clarke
Partner
Clarke Jeffers & Co
Solicitors
30 Dublin Street,
Carlow.
(T) 059 91 31656
(F) 059 91 32257
http://www.carlowsolicitors.com/
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