MUD Act Synopsis

MUD Act Synopsis

1

Establish an owners’ management company. The common areas of the development must have been transferred to that management company. This must be done at the expense of the developer and must be done before the sale of the first property in the development.  

2

Supply a certificate under the Building Control Acts from a suitably qualified person regarding compliance with fire safety in the development. The Multi-Unit Developments Act 2011 (Section 3) (Prescribed Persons) Regulations 2011 specify that suitably qualified people are architects, building surveyors and chartered engineers.

3

The owners’ management company is part of the conveyancing procedure for the individual units. If the unit is subsequently sold or transferred to another person, the membership of the owners’ management company automatically transfers to the new owner. It will not be necessary to formally execute the transfer or have it approved by the directors of the company.

4

The Act refers to the organisations that manage multi-unit developments as owners’ management companies even if the organisation is not a company. For example, an unincorporated group or body may be responsible for the management but they are under the same obligations as owners’ management companies that are incorporated as companies.

5

Owners’ management companies must comply with company law generally and with the specific obligations imposed by this Act. All directors are limited to a term of 3 years and must resign.  They may be reappointed if there are no other members willing to take up the position. The main specific obligations of an owners’ management company are as follows:

6

The company must supply the buyer of a residential unit with a share or membership certificate and ensure that the register of members is updated. The members are obliged to keep the company informed of any relevant changes.

7

The company must prepare an annual report and hold an annual meeting to discuss the report. The report must include details of income and expenditure, annual service charges, the sinking fund account, planned expenditure on maintenance and repair, insurance cover and contracts entered into by the company. The members must be given 21 days’ notice of the meeting and be provided with the report 10 days before the meeting. The annual general meeting must take place reasonably close to the multi-unit development unless 75% of the members of the company agree otherwise.

8

Within 3 years of the transfer of ownership to it, the owners’ management company must establish a sinking fund for spending on refurbishment, improvement or maintenance of a non-recurring nature of the multi-unit development. Unit owners are obliged to make contributions to it (including developers in the case of unsold units). The Act provides that the amount is to be €200 annually or such other amount as the members agree. Contributions to the sinking fund must be held in a separate account and cannot be used for operational expenses unless approved in the EGM or AGM.

9

The owners’ management company may make house rules for the effective operation and maintenance of the multi-unit development. These rules must be agreed by a meeting of members but the first set of rules may be made by the company before the sale of the first unit. Where a unit is let, it must be a term of the letting that it is subject to the observance of the house rules by the tenants

10

Any person affected may apply to the Circuit Court for an order to enforce any rights conferred or obligation imposed under the Act. This includes the owners’ management company, a unit owner, a trustee under a will or other settlement and the developer.

The Court, instead of making an order, may direct the parties to attempt to solve the matter by mediation.

Voting rights are one unit one vote’ unless circuits court provides otherwise.

No Director can be appointed for more than 3 years.

Annual Meeting must be held and report distributed to all members.

OMC’s struck off 6 years or less are exempt from having to go the High Court for reinstatement.

The developer, OMC or any member can apply to the court for an order to enforce the act.

The court may in the course of proceedings request or direct that mediation take place and both parties must attend.

Glossary

OMC – Operating management company.  The no for profit company setup of which all the owners in the development are shareholders.

Managing Agent – the property service agent contracted in to provide property services to the OMC

MUD Act – The laws that govern OMC’s

PRSA – Property Services Regulatory Authority – the government body that oversees the services provided by the agent.