Thousands of apartment owners could see their homes devalued and, in the long run, demolished if the complexes in which they are located are not properly run, the Director of Corporate Enforcement has warned.
Paul Appleby said an effective management structure was critical to the future value of apartment complexes. If the management company responsible for the care of common areas and the provision of waste, security and other services did not maintain properties to a high standard, the resale value of every apartment in a development would suffer.
"It's the owners' pockets which will be hardest hit if the place becomes a shambles in 20 years. They have most to lose by the management company failing to discharge their duties."
To fill the "knowledge void" among apartment owners, the Office of the Director of Corporate Enforcement (ODCE) yesterday launched a draft guide on the running of management companies. Public comment is being sought on the guidelines (available on www.odce.ie) by next March 30th.
In extreme cases, Mr Appleby said, where management companies have been struck off for failing to discharge their legal duties, apartment owners have found themselves in a legal limbo, unable to sell their properties.
A number of management companies have been struck off and 75 more are facing this threat.
He said some apartment owners were unaware of the existence of a management company in their complex, while others had no understanding of its role or the part they could play. A failure to invest adequately in maintaining and refurbishing multi-unit developments could lead to demolition and refurbishment of the site.
The ODCE received 11 complaints about apartment owners' management companies last year and 19 so far this year. While more attention had been paid to the area, it was clear substantial problems remained to be addressed, Mr Appleby said.
On at least one occasion, the ODCE has gone to the High Court to order that an agm be held on proper terms. It has also directed management companies to make accounts available to members who own apartments, and to force a company to hold an agm.
Mr Appleby advised consumers who intended to purchase apartments to do due diligence to ensure the terms of their contract would be adhered to.
