Multi-Unit Developments Act 2011

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Recent changes to legislation under the new Multi-Unit Developments Act 2011 will affect residential and mixed property developments.

The Multi-Unit Developments Act 2011 which was signed into law in January of this year imposes new obligations on property management companies and Developers.

This legislation provides a statutory framework for the operation and governance of multi-unit developments and the duties and obligations of developers have been clearly defined. The rights and obligations of members have been established and a framework for dispute resolution is provided for in the Act.

What are the main provisions of the act?

• Requirement to establish an Owner Management Company (“OMC”) for all Multi-Unit Development (“MUD”) at the expense of the developer.
• Strict conditions for the sale of units and obligation for developers to transfer ownership of common areas to OMC’s – The common areas must be transferred within 6 months of 1^st April 2011.
• New Regulations for Mixed Use Multi-Unit Developments.
• Automatic membership of the OMC.
• One vote is attached to each residential unit.
• Requirement to hold annual meetings and prepare annual reports to members – The format of these annual reports are defined in the Act.
• Establishment of a scheme of annual service charges & expenditure categories.
• Establishment of a sinking fund within 18 months of enactment of the Act.
• Making house rules
• Dispute resolution, mediation & rehabilitation of multi-unit development
• Restoration of struck off OMC’s to Register of Companies within 6 years of strike off

What must the Management Company Do?

The Directors of the Property Management Company are required to ensure that the Management Company complies with all legislation that applies to the Company. The main requirements that must be complied with under the Act are

• The common areas must be transferred to the Management Company by 1^st October 2011
• Amend the Memorandum and Articles of Association to provide for the new provisions of the Act
• The unit owners are automatically registered as members of the company and membership certificates must be issued to each member.
• Establish procedures for setting the Annual Service Charge and contribution to the Sinking Fund

Please contact Brian Dignam to arrange a meeting to discuss how the new Act affects your Management Company in more detail.

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