Multi Unit Developments Act 2011
Governance and Management in Existing and Future Multi
Unit Developments
5 April 2011
Multi Unit Developments Act 2011
“An Act to Amend the Law relating to the Ownership and
Management of the Common Areas of Multi Unit
Developments and to Facilitate the Fair, Efficient and
Effective Management of Bodies Responsible for the
Management of Such Common Areas and to Provide for
Related Matters”
Multi Unit Developments Act 2011
Application
•Entire ACT applies to Multi Unit developments with greater than 5 Units
•Schedule 1, details the sections that apply to developments of between 2 and
5 units
•Schedule 2 relates to Managed Housing estates i.e. Where the structure does
not form part of the common areas
•Applies to mixed use developments subject to a fair and equitable treatment
of service charges, sinking fund and voting rights
Multi Unit Developments Act 2011
•Transfer from Developer to Owners Management Company
•Operation of Owners Management Company
•Dispute Resolution
Transfer of Common Areas to Owners
Management Company
Act divides
Multi Unit Developments
that have yet to have
the freehold conveyed
into two categories
1.
Future Developments or Development
where a residential unit has not
previously been sold (Section 3)
2.
Multi Unit Developments where units
have been sold.
Future Developments (Section 3)
Before First Unit is Sold :

Owners Management Company (OMC)Must Be Established at expense of developer

“Relevant Parts” must be transferred to OMC

Certificate of compliance with Fire Safety Certificate from “Suitably Qualified” person

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Contract Between OMC and Developer must be executed to detail and confirm:
Confirmation that development will be completed in accordance with all relevant
statutory requirements
Completion of common areas
Release of any Retention
Dispute Mechanism regarding completion
OMC must have separate legal firm advising on the contract at the expense of the
Developer
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Existing Developments

The Developer must arrange for transfer of ownership of relevant parts within 6 months.

Developer must transfer common areas of substantially completed estates within 6 months without retaining beneficial
interest

Owners Management Company officers are obliged to join in transfer of units to purchasers.

Obligation to complete common areas remains with developer

Upon completion of Development Stage, developer must furnish documents contained in Schedule 3

Membership of OMC shall pass with Unit.

Developer retains right to pass over conveyed areas to enable completion

Developer will indemnify and insure and maintain safe access

Unit Owners / Owners Management Company will not obstruct developer
Determination of Beneficial Interests

As soon as the development stage has ended the developer shall make a statutory
declaration for the benefit of the OMC that the legal and beneficial interests stand
merged.

Such declaration shall be made with the consent of a mortgagee or owner of a
charge

Where the development stage has not ended, but 60% of owners in the
development or relevant part of it request the transfer of the beneficial interest,
the owner of same must do so or show cause.

An OMC can effect essential repairs to ensure the safety and effective occupation
or peaceful enjoyment of occupation, subject to conditions.

Developer must deliver Schedule 3 documents on determination of Beneficial
Interest S31(2)
Schedule 3 Documentation

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Confirmation that development has
been completed
Certification confirming that any
financial contributions for planning have
been paid.

Warranties & Guarantees

Test records for drainage, water pipe and
heating pipe work

Schedule of Plant & Equipment and
expected useful life of same

Title documents for common areas and
reversion

Stamped & Registered counterpart
Leases

OMC statutory books
Safety File

As Built Structural Drawings

As Built Services Drawings

O & M Manuals for plant and equipment
Operation of Management Companies

Company Structure

Annual Meetings

Annual Service Charges

Sinking Fund

House Rules
OMC Structure

New developments will have equal voting rights

Voting Rights in Mixed Use Developments shall be apportioned in a manner that is fair and
equitable

New developments Management Companies will have “OMC” in the name

In existing Management Companies anyone enjoying greater voting rights than one per unit
is only entitled to use them if granted authorisation to do so by the Circuit Court

The Circuit Court must be satisfied that the voting rights have a fair and just and economic
reason to be exercised.

No Director can be appointed for a fixed term longer than 3 years and any existing
appointment will be extinguished after three years.
OMC Annual Meetings

Hold a meeting once per annum for purposes which include consideration of Annual
Report

Annual Report to contain accounts, insurance, fire safety details and disclose any
connected party transactions

21 Days notice and Annual Report issued 10 days prior to meeting

Meeting to be held within reasonable proximity and at a reasonable time
OMC Annual Service Charges

Annual Service Charge shall not be levied unless considered at a General Meeting of
members

Annual Estimate must detail expenditure categories

The Estimate can be altered with the approval of 60% of members

The Estimate can be disapproved by not less than 75% of members

All owners, including the developer is under an obligation to pay all service charges levied

Service charges will be calculated on a transparent basis and equitably apportioned
OMC Sinking Fund

OMC must establish a sinking fund for the refurbishment, improvement and non
recurring maintenance of the multi unit development

OMC can spend Sinking Fund to procure “Advice from a suitably qualified person”
relating to refurbishment, improvement of non recurring costs

The Amount shall be € 200.00 or other such sum agreed by a meeting of members

The Developer will be obliged to contribute for all unsold units

The OMC shall commence the scheme within 3 years of the first sale or 18 months
from the enactment of the Bill, whichever is the later

Must be held in a separate account in a manner that identifies it as a sinking fund
OMC – House Rules

An OMC can make house rules relating to the effective operation and maintenance of the
development that shall be binding on owners, tenants, servants, agents and licensees

House rules must be consistent with lease

House Rules must be consistent with the objective of advancing the quiet enjoyment of the
development and be fair and equitable

House rules must be considered and approved by a general meeting

Approved House Rules must be issued to all owners 21 days in advance of meeting

Any letting shall oblige tenants to observe title documents and house rules

The reasonable cost of remedying any breach of house rule can be recovered by the OMC from the
offender
OMC Other

An OMC that has been struck off the Companies Register can be restored within six years on
submission of relevant annual returns

Developer must transfer the benefit of any guarantees or warranties

An OMC cannot enter into contracts for a period greater than 3 years or contains a penalty
for terminating after a period of 3 years

OMC can effect essential repairs of parts not in its ownership
Dispute Resolution

The Developer, OMC or any member can apply to the Court for an order to enforce the Act
or relating to any matter allowable under the Act
Such orders can include;
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An order to alter the legal documents
Voting rights
Disintegrating the OMC into multiple OMC’s
Apportionment of funds between Sinking Fund and Service Charge
Transferring the common areas to the OMC
Directing the Developer to complete the Development
OMCDispute
– Management
Resolution
Agent
Owners
Management
Company
Management
Agent
Unit Owners
Tenants
•All unit owners are members with equal voting rights and entitled to become directors
•OMC can engage a Management Agent to carry out day to day functions of the OMC
•Engages with Unit Owners in collection of service charges, responding to queries / complaints regarding
services and other occupiers
•Receives instructions from Board of OMC regarding services and implementation of Lease obligations and OMC
Policy. Reports to OMC on activities
•Must pay Service Charges and Abide by Terms of Lease and properly constituted House Rules.
Must Bind their tenants to do same
•Can be elected Director or Secretary
Can vote at meetings, report issues to OMC / Agent. Expect services from OMC per Lease Agreement
•Contract is with Unit Owner and Resident
•No Contractual Relationship with OMC or Management Agent
•Most Management Agents will take reports of issues from Tenants
•Tenants should make their Unit Owners Aware of any Issues with OMC or Agent
MUD
Dispute
Act 2011
Resolution
– Impact

No Annual Service Charge can be issued after 1 April 2011 without being
considered at General Meeting

Approval of Service Charge Scheme must detail the amount to be levied

Existing House Rules must be ratified to be enforceable

If No Sinking Fund Scheme is agreed at a General Meeting the OMC must
charge € 200.00 per unit at the next financial year

Preparation of Annual Report for Annual General Meeting
MUD Act 2011 – Impact for OMC AGM’s
Old AGM Agenda:

Minutes of Previous AGM

Matters Arising

Consideration of Financial
Statements

Resolution to Authorise
Directors to fix the
remuneration of the Auditors

Election of Directors

Any other Business
New
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AGM Agenda:
Minutes of Previous AGM
Matters Arising
Consideration of Annual
Report
Consideration of Financial
Statements
Consideration of Budget for
coming year
Consideration of Sinking Fund
Scheme
Approval of House Rules
Resolution to fix the
remuneration of the Auditors
Election of Directors
Any other business
MUD Act
Dispute
2011 Resolution
– Record Keeping

As House Rules, Service Charges and Sinking Funds must
be considered at General Meetings, minute recording is
vital.

Any orders under Section 24 by the Circuit Court must be
applied.

Law Society expected to issue revised requisitions on title
to reflect changes.
MUD Act 2011
– Impact
on Audit of OMC’s
Dispute
Resolution
Chartered Accountants Ireland to issue a new “Property Management
Company Procedures for Quality Audit 2011 (Republic of Ireland) Toolbox
 Management Agent is Related Party
 Auditor to be provided with:
 Budget as approved at General Meeting
 Method of Apportionment with documentary evidence
 Sinking Fund Scheme as approved at Annual General Meeting
 Insurances and Qualifications of Agent
 Contract between OMC and Agent
 Controls regarding expenditure
 Copy of Main Supplier Contracts and detail of parties (Agent or OMC)

Summary
Dispute
Resolution

Act Applies to Developers and Owner Management Companies

Service Charges to be agreed at General Meeting

Sinking Fund to be agreed at General Meeting or charge € 200

House Rules to be agreed at General Meeting or not enforceable

All Developments will be handed over by 30 September 2011 or law is
broken

No weighted voting rights from 1 April 2011

Schedule 3 delivery could pose a problem and create opportunity for
OMC’s