housing
On Sunday 11 April, The Business Post published a piece by David Rouse, Multi-Unit Developments Adviser with The Housing Agency, marking ten years of the Multi-Unit Developments Act. You can read the piece below. Views expressed are those of the author.
MUD Act: bringing home owners together for the common good
The Multi-Unit Developments Act, which regulates the ownership and management of the common areas of multi-unit developments, is ten years old. We examine its efficiency in terms of apartment management and explains its functions
April 1, 2021 marked ten years since most sections of the Multi-Unit Developments Act 2011 came into force. The MUD Act, as it has become known, was intended 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”.
Owners’ management companies
A multi-unit development, or a MUD, is a property such as an apartment block, usually containing not fewer than five homes, in which amenities, facilities and services are shared. Owners’ management companies, or OMCs, are responsible for the ownership and management of estate common areas, for example entrance halls, stairways, gardens and car parks. The property owners in the development are the members of the OMC.
Services including maintenance, insurance, waste collection and security are arranged collectively through the OMC. If managed effectively, this shared approach can save homeowners time and money.
Residents benefit from community amenities, for example well-tended gardens and landscaping. Locations with increased residential densities are often served by good public transport links, such as the Luas and Dart in Dublin. A further benefit of density is proximity to centres of diverse employment opportunities, and cultural and social activities.
Disputes
Apartment living, closer to neighbours than is the case in conventional semi-detached or terraced housing, can, however, bring tensions or disputes. Gaps between residents’ expectations and their lived experience can arise. For example, the upkeep of common areas may not meet standards expected. House rules to protect residents’ quiet enjoyment of their homes may go unenforced. The pandemic may have magnified this experience for some.
With this in mind, we asked the question, are OMCs managed fairly, efficiently and effectively, as the MUD Act intends? The answer is: “It depends.”
MUD Act
The MUD Act brought clarity to formerly contentious topics such as voting rights. In most developments, each property (as opposed to each owner) carries an entitlement to one vote. Developers are obliged to complete common areas and transfer them to the OMC within a specified timeframe.
The act established a fair and transparent financial framework for OMCs. It clarified the way in which homeowners fund the costs of shared services. It introduced a statutory obligation for owners to pay management charges.
Under the act an OMC must issue an annual report to its members. Plans for future expenditure, statements of the OMC’s current financial position and details of estate insurance cover and fire safety measures are among the matters that must be contained in the report.
Dispute resolution under the MUD Act involves mediation, or legal action in the Circuit Court. Reports of Circuit Court decisions are seldom carried in the media or in law reports. This makes it difficult to evaluate the extent of enforcement of parts of the act, such as whether there have been many court orders directing the transfer of common areas from developers to OMCs.
Company law
OMCs must comply with the legal framework that regulates all companies – the Companies Act 2014. It is not realistic that individual homeowners would be familiar with the detail of this large and complex body of corporate regulations. However, it is essential that directors of OMCs acquaint themselves with their duties under company law.
Guidance is available from sources such as the Companies Registration Office (CRO) and the Office of the Director of Corporate Enforcement (ODCE). When appropriate, the advice of experienced professionals should be sought. Directors who are familiar with their duties under company law will be well placed to know when to seek professional advice.
Intending purchasers of homes in MUDs should ask their property and legal advisers about how MUDs function. Do purchasers know they will automatically become a member of an OMC? Can they afford the annual management fee and sinking fund contribution? Which residents will act as directors of the OMC, roles which in most cases are unpaid and voluntary?
Key documents
Owners, and particularly OMC directors, should familiarise themselves with the governing documents relating to the estate. Three important documents are the OMC constitution, the head lease and the contract between the OMC and the property management agent.
The constitution deals with the internal governance of the company, for example, its powers, membership conditions and the conduct of meetings. The importance of the head lease becomes apparent when a dispute arises about whether a wall or a roof is a common area owned and controlled by the OMC, or private property owned by the homeowner. Also documented in the lease are matters such as the apportionment between individual properties of the total cost of running the estate.
An OMC usually employs a management agent to undertake the day-to-day running of the development. A contract, or letter of engagement, governing this relationship is a legal requirement. The contract documents the services, fees and other arrangements with the agent, who by law must be licensed.
Finances
One of the functions of the agent is to advise the OMC about the calculation of the budget for services and maintenance for the development. Advice on establishing a building investment fund, or sinking fund, is equally important. Following agreement of budgets at a members’ meeting, invoices for annual management charges are issued to owners.
Securing owners’ payment of charges is a key function of the OMC, guided by the agent and the company’s legal adviser. Full and timely payment benefits the entire community, because services can be planned and provided with certainty. Pursuing unpaid fees consumes time and money better spent on services and property upkeep.
Homeowners in MUDs might be wary of false economies and short-term thinking in relation to annual charges. Artificially low charges may mean that sinking funds are not being built up. In the long term, this is to the detriment of all owners, because big projects such as lift replacements or building redecoration may be difficult to finance.
In it together
OMCs have been described as the glue binding together owners’ property interests in MUDs. A cast of people needs to work together to achieve fair, efficient and effective management. Responsibilities lie with residents, landlords, OMC directors, management agents, local authorities, regulators, housing charities, and legal and construction professionals.
Depending on the nature of a dispute involving or affecting an OMC, the Residential Tenancies Board (RTB), Property Services Regulatory Authority (PSRA), or ODCE may have a regulatory or enforcement role.
Information on the MUD Act and other relevant law is readily available. The Housing Agency, the Citizens Information Board and other state organisations publish accessible guidance materials.
Professional bodies such as the Society of Chartered Surveyors Ireland (SCSI) prepare materials for their members, and for consumers.
The #Housing2030 initiative partners – Housing Europe, UNECE and UN-Habitat – are proud to present the fourth and final in a series of thematic conferences: “Shaping investment pathways to deliver affordable housing”. This event is presented in association with The Housing Agency.
The conference will offer informed discussion on the challenges that we face in providing sufficient investment and funding for the development of affordable housing options. We will also address some of the challenges that globalised finance can pose with regard to meeting the objectives of access to affordable, quality homes for all.
Agenda
All time slots are Irish Standard Time (IST) / Central European Summer Time -1 (CEST-1)
09:00-09:05; Welcome
John O’Connor, Chief Executive Officer, The Housing Agency
09:05-09:15; Opening address
Darragh O’Brien, Minister for Housing, Local Government & Heritage, Ireland
09:15-09:30; #Housing2030 Partners Contribution on Financing for Affordable Housing
Doris Andoni, Chair of the UNECE Committee on Urban Development, Housing and Land Management
Bent Madsen, President of Housing Europe
Christophe Lalande, Housing Lead Specialist – Land, Housing and Shelter Section, UN-Habitat
09:30-09:50; Keynote Address
Josh Ryan-Collins, Senior Research Fellow at the UCL Institute for Innovation and Public Purpose
09:50-10:10; The ‘affordable housing finance’ toolkit
Michelle Norris, School of Social Policy, Social Work and Social Justice at University College Dublin
10:10-10:50; Q&A Session
The speakers on this panel have recorded three podcasts under the title ‘Shaping investment pathways to deliver affordable housing’. Attendees are encouraged to listen to these interventions in advance of the webinar, as this session will be a Q&A only. The podcasts at the link provided to the right.
David Orr, #Housing2030 Co-Chair, Moderator
Michelle Norris, School of Social Policy, Social Work and Social Justice at University College Dublin
Manuel Aalbers, KU Leuven School of Geography & Tourism
Grzegorz Gajda, European Investment Bank
10:50-11:00; Virtual coffee break
11:00-11:40; “How can we use finance and related regulations and institutions to improve affordable housing outcomes?”
Representatives of national and local governments, social and affordable housing providers and policy experts will share their experiences with innovative policies which have succeeded in generating funding for the delivery of affordable housing options.
Elena Szolgayova, #Housing2030 Co-Chair, Moderator
Barry O’Leary, Housing Finance Agency of Ireland
Emmanuelle Cosse, l’Union sociale pour l’habitat (USH)
Solveig Råberg Tingey, The Danish Federation of Non-Profit Housing Providers (BL)
Javier Burón Cuadrado, Housing Division – Barcelona City Council
Jarosław Pucek, National Property Agency of Poland (KZN)
11:40-11:45; Summary of the day’s discussions
Elena Szolgayova, #Housing2030 Co-Chair
David Orr, #Housing2030 Co-Chair
11:45; Adjourn
This report presents a review of the role of social workers and other personnel employed by local authorities specifically to assist Travellers with their accommodation needs.
It was commissioned by The Housing Agency on behalf of the Minister of State at the Department of Housing, Local Government and Heritage.
This publication was written by Michelle Norris, Angela Palmer, Joanne Kelleher and Jim Campbell, School of Social Policy, Social Work and Social Justice, University College Dublin.
Since the mid-1960s, local authorities have employed social workers to support Travellers in meeting their accommodation needs. Since then, the nature and scale of the demands on local authority housing departments have changed and local authorities have taken on new housing responsibilities.
This report found continuing levels of accommodation need among this community and makes a number of recommendations to improve the effectiveness of this service in the context of the wider local authority housing service. This includes the implementation of the recommendations of the Traveller Accommodation Expert Review 2019.
The views expressed in this report are those of the authors and do not necessarily represent those of The Housing Agency, the Minister of State or the Department of Housing, Local Government and Heritage.
The Housing Agency has welcomed the publication of the Summary of Social Housing Assessments (SSHA) 2020, which has recorded a fall in the number of households in Ireland on a waiting list for social housing.
Prepared by The Housing Agency using local authority data, key findings of the SSHA 2020 include:
- The number of households with an unmet social housing need fell by 10% in 2020, to 61,880.
- 25 of 31 local authorities recorded fewer households on their lists than in 2019. An additional 354 households were identified across the six local authorities where the number with an unmet need for social housing had increased.
- More than four-in-ten households with an unmet social housing need live in the four Dublin local authorities.
- The majority of unmet need is in small households: single adult households account for over half of those with an unmet need for social housing (52%), while nearly a quarter are lone parent households (24%).
- The number of households waiting longer is falling; the share of households waiting for more than four years fell by almost four percentage points (from 48.7% to 44.8%). Conversely, the share of households waiting for fewer than two years increased by 1.6 percentage points (from 33.8% to 35.4%).
Commenting on the publication, Chief Executive Officer of The Housing Agency John O’Connor said: “Since The Housing Agency took on the role of preparing annual summaries of social housing assessments, we have been pleased to see a fall in the number of people with unmet social housing needs in Ireland. This assessment shows that the number of households qualified for social housing support decreased by one-third (29,720 households) compared to the assessment conducted in September 2016.
“While there are welcomed findings, it is important to note that there is more work to be done to meet the housing needs of people in Ireland. For example, single adult and lone parent households continue to make up the vast majority of those on a social housing waiting list. The Housing Agency is committed to work with our partners in central Government, local authorities, approved housing bodies and across the housing sector to see the overall numbers of those on waiting lists continue to fall in coming years.”
The SSHA 2020 report can be read here.
About the SSHA 2020
Local authorities have been conducting annualised assessments of social housing need since 2016. The count is carried out under Section 21 of the Housing (Miscellaneous Provisions) Act 2009 and the Social Housing Assessment (Summary) Regulations 2016.
The Summary of Social Housing Assessment (SSHA) reports the ‘net need’ for social housing i.e. the total number of households who are qualified for social housing but whose social housing needs are not being met. The point-in-time assessment is generally undertaken by local authorities in June; the 2020 count was delayed until November as a consequence of the COVID-19 pandemic.
The Housing Agency supports the process of gathering and analysing the data, and prepares a national summary report which is presented to the Minister for Housing, Local Government and Heritage.
Produced by The Housing Agency using local authority data, the annual Summary of Social Housing Assessments (SSHA) brings together information provided by local authorities on households that are qualified for social housing support but whose social housing need is not currently being met. It is a point-in-time assessment of the identified need for social housing support across the country.
The SSHA 2020 report can be read here.
Among the key findings of SSHA 2020 are:
- The number of households with an unmet social housing need fell by 10% in 2020, to 61,880.
- 25 of 31 local authorities recorded fewer households on their lists than in 2019. An additional 354 households were identified across the six local authorities where the number with an unmet need for social housing had increased.
- More than four-in-ten households with an unmet social housing need live in the four Dublin local authorities.
- The majority of unmet need is in small households: single adult households account for over half of those with an unmet need for social housing (52%), while nearly a quarter are lone parent households (24%).
- The number of households waiting longer is falling; the share of households waiting for more than four years fell by almost four percentage points (from 48.7% to 44.8%). Conversely, the share of households waiting for fewer than two years increased by 1.6 percentage points (from 33.8% to 35.4%).
The Minister for Housing, Local Government and Heritage, Darragh O’Brien TD, has given approval in principle for Ireland’s first Cost Rental Homes, delivering on a key commitment in the Programme for Government, under Housing for All.
It is intended that the Housing Agency will manage and administer the Scheme on behalf of the Department of Housing, Local Government and Heritage. The Housing Agency will oversee the administration of the loan arrangements including the drafting of the Agreement for the Cost Rental Equity Loan (“CREL”) and will manage the due diligence on each proposal up until the signing of the CREL Loan.
In Budget 2021, €35 million was made available to Approved Housing Bodies (AHBs) to deliver approximately 350 cost rental homes in 2021 at rates which are a minimum 25% below open market values. An additional 50 cost rental homes at Enniskerry Road, Dun Laoghaire Rathdown are also due to be completed this year supported by the Department’s Serviced Sites Fund.
Following a competitive assessment process, approval has been given to three AHBs, Clúid, Respond and Tuath, for a total of 390 cost rental homes. These developments are spread across Dublin, the GDA and Cork, with precise locations to be published on completion of commercial and contractual arrangements. Subject to the application, the Housing Finance Agency has also made financing of up to €100m available to support schemes approved under this measure.
Minister O’Brien commented: “Shortly before Christmas I put out a call to our AHBs asking them to submit proposals for Cost Rental homes. They responded enthusiastically and the standard of the proposals received is extremely high. I believe this is really encouraging for the future expansion of the scheme.
“Cost Rental is a new form of tenure in Ireland where tenants will pay rent that covers the costs of delivering, managing, and maintaining the homes only. Through the Affordable Housing Bill 2020, Cost Rental will be placed on a statutory footing and the conditions and operational matters for cost rental are being finalised as part of this process.
“The collective experience in bringing on stream these first cost rental homes in the State will be used to inform the ongoing policy development process. This will support the wider roll out of the model across local authorities, the Land Development Agency and Approved Housing Bodies.
“These homes will be made available to middle income households with a reduction of at least 25% on open market rental values. It is my firm commitment that we build on this new scheme and expand it further so that many more tenants live securely in cost rental homes,” he concluded.
The Housing Agency recently presented a webinar of international experts delivering insights into the regulation and management of apartments and multi-unit developments.
With apartment living on the rise, this recording will be of interest to a wide audience including housing practitioners, professionals, regulators and officials, scholars, and providers.
Speakers explored innovations and trends affecting apartment/condominium living in their countries, and what the future may hold. The implications of the pandemic for apartment living will be considered.
All information correct as of broadcast date. The views expressed in the recording below do not necessarily represent the views of The Housing Agency. Broadcast date: 15 December 2020. Click below to watch:
This webinar featured contributions from the following international speakers, followed by roundtable/Q&A
|
Country |
Speaker |
|---|---|
|
Australia |
Dr. Hazel Easthope, Associate Professor, University of New South Wales, Sydney |
|
Canada |
Robin Dafoe, CEO and Registrar, Condominium Authority of Ontario |
|
Ireland |
Enda McGuane, Residential Committee, Society of Chartered Surveyors Ireland |
|
New Zealand |
Susan O’Neill, Principal Policy Advisor, Tenures & Housing Quality, |
|
UK |
Dr. Nigel Glen, CEO, Association of Residential Managing Agents |
|
USA |
Tom Skiba, CEO Community Associations Institute |
This report features case studies from Switzerland, Austria, France, Germany, the Netherlands and Denmark into innovations in design and construction of social, affordable and co-operative housing in Europe.
The Housing Agency and the Residential Tenancies Board (RTB) jointly hosted a lunchtime webinar on the rights and responsibilities of landlords and tenants in managed residential estates, such as apartment developments.
David Rouse, advisor with The Housing Agency, discussed legal relationships in managed estates, and the relevance of the Multi-Unit Developments Act 2011 to landlords and tenants. Emer Morrissey, Assistant Director, Head of Dispute Resolution at the RTB, addressed rights and responsibilities of landlords and tenants and dispute resolution in the context of managed estates.
The views expressed by the speakers in this video are not necessarily those of The Housing Agency. All information correct as of broadcast date: 3 November 2020.