Dáil Éireann Debate, Tuesday - 10 October 2023
336. Deputy John Lahart asked the Minister for Justice if it is legal for management companies, which takes ownership of a substantial amount of apartments in an apartment complex that, that a management company then has the majority vote when it comes to increasing the management fee on the owner/occupiers in the remaining part of the apartment complex; and if she will make a statement on the matter. [44115/23]
View answerThe Multi-Unit Developments Act 2011 (MUDs Act), reformed the law relating to the ownership and management of common areas of multi-unit developments, and aims to facilitate the fair, efficient and effective management of Owner Management Companies (OMCs).
The MUDs Act includes provisions relating to:
• the voting rights of apartment owners in decisions taken by the OMC;
• the power of a court to revise those voting rights, if satisfied that this would be ‘in the interests of justice’; and
• the setting of the annual service charge payable by apartment owners in a MUD
In general, ownership of a unit, for example an apartment, in a multi-unit development means that the owner(s) of that apartment are considered as a member of the owners’ management company in the development and are entitled to a vote in respect of its decisions, including on the fixing of service charges. Section 14.1 of the MUDs Act states that “in the determination of any matter by the members of the [owners’ management company] one vote shall attach to each residential unit in the multi-unit development to which the owners’ management company relates, and …no other person has voting rights in respect of such determination”. This means there is one vote for each unit, regardless of the number of owners of that unit. Section 14.2 adds that each such vote shall be of equal value.
Despite the general rule stated above under point 1), the MUDs Act also provides for exceptions in the interests of fairness. Under section 25(1), ‘any member of [the] owners’ management company’ may apply to the Circuit Court for a court order to alter the voting rights of members in the OMC. The Court can make such an order, under section 24(6), if it is satisfied:
‘that the structure of the voting rights of members in an owners’ management company is not established on a fair and equitable basis, …[and ] that it is necessary in the interests of justice to do so …’ . The Act also provides for mediation in such a dispute.
Under section 18 of the MUDs Act, the proposed annual service charge has to be approved by the OMC members at a general meeting. The proposed service charge amount can be amended by a vote of 60 per cent of those present and voting at the meeting. Where the estimated service charge for the coming year is disapproved by at least 75% of those present and voting, the proposed service charge will not be levied, and the previous year’s charge will continue to apply until a new service charge for the coming year is approved.
In relation to annual service charges, the owner of each unit in a multi-unit development is obliged to pay all service charges levied.
