Owners’ Management Companies Multi-Unit Developments Act 2011 (Part 1)
The Multi-Unit Development Act 2011 (MUD Act) was introduced to regulate the setting up and running of Owners’ Management Companies (OMCs). Prior to this Act there was no specific Act regulating this area and it was hoped that the Act would resolve some of the issues that were being experienced at the time. The Act itself only runs to about 38 pages and is now nearly 10 years old so it is not surprising that there are calls for it to be overhauled. There are indications that the Government are reviewing this whole area to ensure that the Act is fit for purpose. A very interesting report commissioned by Cluid Housing and the Housing Agency entitled Owners’ Management Companies – sustainable apartment living in Ireland would seem to be calling for major change in the area. A copy of this report can be found on the Housing Agency Website. To cover the Act as it currently stands, here are some of the main sections in brief:
- Section 2 – who does the Act apply to. 2 to 4 units, only part of the Act applies while the full Act applies to a development with at least 5 residential units that share a common area.
- Section 3 – important for new developments and sets out the relationship between the OMC and the developer/builder. OMC should be set up at the expense of the developer/builder.
- Section 4 to 12 – an area that can sometimes result in issues covers the rules and guidelines on the transfer of the common areas to the OMC.
- Section 14 and 15 – voting rights of the members, generally 1 vote per unit held.
- Section 16 – directors should not hold office for more than 3 years.
- Section 17 – requirement on directors to provide members with an Annual report (will be covered in more detail in a future post).
- Section 18 – service charges and rules around budget approval (will be covered in more detail in a future post).
- Section 19 – sinking (building investment) fund (will be covered in more detail in a future post).
- Section 23 – covers the House Rules within a development
- Section 24 and 25 – covers dispute resolution, the fact that the Circuit Court will have exclusive jurisdiction.
- Section 30 – outlines the rules applying to OMCs that have been struck off the Companies Register.
- Section 32 -places restrictions on OMCs entering long term contracts with suppliers.