Management firms ‘ripping off’ homeowners

DELAYS by the Government in bringing forward legislation to regulate property management companies is causing hardship for apartment owners, it was claimed yesterday.

Fine Gael housing spokesman Terence Flanagan said it was totally unacceptable that the Government had still not presented a bill to regulate the sector three years after work began on drafting such legislation.

“Meanwhile apartment owners throughout the country continue to be ripped off with high service charges,” said Mr Flanagan.

The Fine Gael TD said the Property Services Regulatory Authority, which had been established in 2005, could still not carry out its intended role in the absence of legislation, despite having a budget of almost €1m.

His comments came after two self-help information booklets on the governance of property management companies was published by the Office of the Director of Corporate Enforcement yesterday.

One booklet explains the role and function of property management companies, their directors and members, while a more detailed 258-page document provides specific information on company law regarding such firms.

They outline how people who own housing units that are part of residential schemes and complexes can contribute to the effective running of property management companies. They also explain the extent to which a director may be personally liable for their actions or omissions.

The Director of Corporate Enforcement Paul Appleby said the booklets would bridge a significant information deficit which exists regarding such companies.

Mr Appleby said his office had been quite successful in resolving issues about governance issues linked to company law, such as the failure to hold annual general meetings or provide property owners with copies of annual financial statements.

However, Mr Appleby said his office could not deal with many other types of complaints about property management companies such as issues with maintenance and other defects in apartment developments.

Complaints about such firms rose by more than 100% last year to 64, with a similar number already received to date in 2008.

Earlier this year, the Law Reform Commission recommended legislative changes for the operation of property management companies to keep pace with the increasing popularity of apartment and flat complexes whose tenants share communal areas and services.

In making 67 separate recommendations, the LRC said it was aware that disputes regularly erupted over the size of annual service charges, sinking funds and whether local authorities should take over charge of maintaining such estates.

The National Consumer Agency also launched guidelines on the operation of such companies earlier this summer because of concerns than many firms were failing to comply with company law.