Tuesday, 27 June 2006
Dáil Eireann Debate
Mr. McCormack: The practice of local authorities making it a condition of planning permissions for housing developments that an estate management company be established has got out of hand. Young first-time buyers and all purchasers in such estates are letting themselves in for an annual penalty which is much more dangerous than when rates were imposed on houses.
The management companies, which are set up by the developer, are charging householders figures ranging from €450 per annum in housing estates to €2,000 per annum in apartments. In some cases the fees can be doubled from year to year with no right of appeal for the householder. A year ago, when this matter was brought to the attention of the Minister for the Environment and Local Government, he said he would do something about it. More than seven months ago, when I again raised this matter with the Minister in a parliamentary question, he stated: “The Law Reform Commission working group is currently examining a range of legal issues relating to management of multi-unit structures”. What about householders in detached or semi-detached houses who are locked into the management company system set up by developers?
In the same reply, the Minister indicated that he did not approve of local authorities including a management company clause in planning permissions and noted that his Department had asked planning authorities to report on their policy on the attachment of such conditions on planning permissions. Nothing has happened since. Two weeks ago, the Taoiseach shed crocodile tears in the House about how this practice penalises householders and indicated it could not continue but neither he nor the Minister is doing anything to address the problem. It did not take me seven months to determine that the practice continues in planning authorities.
Last week, Galway County Council granted permission for the construction of 61 houses in Loughrea — planning reference No. 05/3642 — in a development in which standard houses account for more than 80% of the units. It will include three detached and 42 semi-detached houses, six terraced houses and ten apartments, yet the developer is obliged to establish a management company under a condition of the permission.
Similarly, in Galway City, I can cite two examples of recent decisions to grant permission where such conditions were included. Planning reference No. 05/470 relates to an application at Ballyburcach for four detached houses. Condition 19 of the permission states: “The proposed communal open spaces, car parking areas and access road within the site of the development shall be retained in private ownership and control shall be maintained by a properly constituted management company”.
Also in Galway city, a recent decision — planning reference No. 05/833 — to grant permission for a development, including seven town houses at Newcastle Road, featured a condition requiring the establishment of a management company. All annual management company charges imposed as a result of these decisions will be borne by householders who have no control over the charges they will face. Will the Minister get his finger out and, if necessary, introduce legislation to end this practice of local authorities conspiring with developers to impose this additional financial burden on householders?
Is it right that I, a resident of an estate, receive free of charge a service for which all buyers of new houses in similar estates must pay, sometimes at exorbitant rates? The curious aspect of the management company clause in planning permissions is that the developer must set up the management company and these frequently consist of the same personnel as the construction company. In many cases, purchasers of homes in these developments commit to purchasing the house before they know the extra annual charges they will be required to pay to management companies.
It is time this Government woke up. How much more does it think first-time buyers can take? The Government has already added €40,000 to the cost of a house, abolished the first-time buyer’s grant, raised VAT charges to 13% and made provision for development charges of up to €9,000 on every house. The annual management fee is equivalent to house rates except that the rates go to the developer rather than the local authority. What will the Minister do about it?
Minister of State at the Department of the Environment, Heritage and Local Government (Mr. N. Ahern): The Planning and Development Act 2000 allows for the attachment of management company conditions to planning permissions for residential estates. This recognises the fact that management companies have been traditionally set up for the maintenance of apartment buildings and their attendant private grounds. In late 2005 my Department requested that a survey of planning authorities be carried out regarding their policy on attaching planning conditions relating to management companies in different types of residential estates. The responses to that survey indicate that the majority of planning authorities do not attach management company conditions to planning permissions for estates comprising houses only. A number do so in very specific circumstances, for example, where there is a shared facility between those houses such as a playground that will need ongoing management arrangements. It is not appropriate to attach planning conditions regarding management companies in the case of traditional housing estates——
Mr. N. Ahern: By this I mean estates of houses with their own front and back gardens. Planning authorities should take in charge the public roads, no matter what type of residential estate is in question. On 25 January 2006, my Department issued circular letter PD 1/06 reminding local authorities of their obligations under section 180 of the Planning and Development Act 2000 regarding taking in charge of estates. The circular letter states that the existence of a management company to maintain elements of common buildings and carry out landscaping must not impact upon the decision by the authority to take in charge roads and related infrastructure where a request to do so is made. My Department has also asked all local authorities to prepare a policy on the matter. Councillors should be vigilant in upholding that policy.
The issue of planning authorities attaching conditions relating to management companies is not straightforward. This is because the traditional housing estate is, in many areas, being replaced by the mixed estate which contains apartments, duplex houses and terraced houses with shared facilities such as car-parking and gardens. High specification paving, lighting and landscaping are frequently features of such estates. Genuine questions arise as to whether it is appropriate that all these facilities should be taken in charge and maintained at public expense. Many of these facilities are replacing the traditional gardens which, in a conventional housing estate, would fall to be maintained by the residents rather than the local authority.
It is unreasonable to say it might never be appropriate for planning authorities to require the formation of a management company; this would contradict the enabling provisions in this regard decided by the Oireachtas in 2000. There may be instances, say in smaller developments, where the residents might prefer a management company to manage the facilities. In other cases they may have facilities, such as a children’s playground or a shared sewage treatment plant, which they want to keep for their own use but which have to be managed.
It is not an exaggeration to say that the face of housing in Ireland is being totally transformed. This transformation has been underpinned by the 2000 Act. Some 35% of all dwellings built in the greater Dublin area are apartments, and that increases to over 50% in Dublin. That demands new policy responses from my Department and from local authorities. As the Deputy knows, I published last December the Housing Policy Framework: Building Sustainable Communities. This sets out an agenda for an integrated package of policy initiatives on matters which included supporting higher densities and compact urban settlement through design innovation in the creation of new homes, new urban spaces and new neighbourhoods.
The Department will also update the residential density guidelines and it is intended to examine the issue of management companies in that context. To do that the Department will shortly set up a working group representing the many interests involved to start considering these complex issues. Consideration will also be given to whether interim guidance should issue to planning authorities regarding planning conditions in relation to management companies. There are issues relating to the operation and control of management companies. My Department has raised ways to try to address those issues with the Department of Justice, Equality and Law Reform, which has certain responsibilities in this area.
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