SPEECH ON ALLIANCE MOTION - from Kieran McCarthy MLA on rights for apartment owners

4.32.00pm GMT Mon 9th Nov 2009

Kieran McCarthy ahead of the debate

Here is the speech from Alliance Chief Whip Kieran McCarthy MLA on his motion which aims to give apartment owners rights and protect them against rogue management agents that charge fees for maintenance and cleaning work they often don't complete.

Since I first approached you Mr. Speaker over a year ago to let you know I was planning to introduce a Private Members' Bill on behalf of the 40,000 apartment and townhouse owners in Northern Ireland and on behalf of property management companies of good repute, I have been gathering evidence on the extent of this problem.

One resident was told by their estate agent that their apartment was worth up to 20% less than it should because the corridors and gardens weren't maintained properly.

Another resident who uses a wheelchair came to see me and explained that although he and his fellow residents paid their monthly service charge each month. , the lift he depended on to access the car park had been out of order for many months After months of being brushed off by the management company to which he paid his monthly service charge, this wheel chair user contacted the lift company and was told the lift contract was years out of date. This is despite the fact that the company he paid his service charge to claimed it had paid many thousands of pounds to the lift company.

Yet, another resident from yet another apartment block came to me to explain that tens-of-thousands of pounds was missing from their apartment block's bank account. And when they attempted to fire the management agent to which they paid their service charge, that management agent fraudulently sought to change records in Companies House.

Among the hundreds of written testimonies I have received, much of what I have uncovered really is shocking.

And, it has further convinced me not only of the need for law reform in this area, but also of the precise measures we need to enact in order to solve this problem. One of the great advantages of the solution I have come up with after my research is that my preferred solution involves changes which are entirely within this Assembly's competence to enact.

Let me tell you the story of how it was I came to be involved with the plight of apartment owners all over Northern Ireland.

One rainy Tuesday over a year ago now I was visited by a constituent who was at his wits end.

He and his wife had sold their family home and decided, now their children had fled the nest, to live in an apartment they had bought in my constituency.

Within days of closing the deal and moving in, my constituents, I'll call them Mr and Mrs A, realised there was a problem with the management of their development.

A fire engine had been called to one of their neighbours' apartments, but as the access road within their development was too narrow, the only way the fire engine could get in was by having a brick wall knocked down.

When my constituents and their fellow residents contacted their insurance company which supposedly covered the commonparts of the development to report the accident, the insurance company informed them that no premium had in fact been paid for years and there was no insurance policy in place.

My constituents had been paying a management company to purchase an insurance policy for the development, yet that company had been pocketing the money and no insurance policy had been put in place.

This unfortunate situation was resolved when the original developer agreed to replace the wall. My constituent of course called the police - yet was told they did not have the resources to deal with such a problem. My constituent also called in trading standards but was told trading standards didn't cover contractual commitments in leases. My constituent spoke to their solicitor, but was advised the legislation currently in place here was not of any use. But that if we lived in England and Wales recent law reforms there meant we would have been better protected.

Despite these knock-backs Mr A decided to investigate where all the money he and his fellow residents paid for their service charge fees had gone.

Many months after beginning these investigations Mr. A came to me to say not only that he was at a dead end, but also that he was being sued by the management company which he had reluctantly decided to stop paying his monthly service charge to. Even though they had not been doing the job they were paid for.

Most apartment and many townhouse owners in Northern Ireland must undertake to pay a monthly service charge to a management company for servicing the common parts of their development. It is often impossible to renege on this commitment legally, even if the company to which you pay this money is not using the money properly.

In this case, I of course advised my constituent that he must not put himself in the wrong by refusing to pay his service charge.

After several court appearances, the precise circumstances of his particular case led the magistrate to conclude that the company which had brought proceedings against Mr. A was not in fact entitled to do so and my constituent won.

And now after a lot of work my constituent and his fellow apartment residents have managed to fire their incompetent management agent and they have hired another whose business practices appear to be a lot better.

Yet they are still owed many tens of thousands of pounds by their former incompetent management agent. They are still trying to obtain their money, as yet to no avail.

I have looked into this problem from a number of angles and the way matters currently stand management agents have the right to demand how ever much money they want as service charges for apartment developments. Yet apartment owners have very little capacity to challenge such demands even if they are unreasonable.

We need to restore balance to the relationship between apartment resident and management agent. And it is this restoration of balance which my private members' bill will seek to achieve.

Finally, let me ask this House to vote in favour of this motion so apartment owners all over Northern Ireland - and I see many of them today in the public gallery - know we are concerned by their concerns. And this issue does not just affect apartment owners, it also affects management agents of good repute and there are some here today in the public gallery. They have said top me 'we are sick of being tarred with the same brush as the worst. Please help us by introducing reasonable regulation'.

It is with these pleas in mind Mr. Speaker that in the coming month I will be publishing my draft Bill. In the meantime, please vote for the motion.

ENDS

NOTES TO EDITORS

Here is the Alliance motion to be debated in the Assembly on Monday 9 November.

Multi-unit Development Management Company Reform

That this Assembly notes that the regulations on multi-unit development management companies are not currently adequate; notes that Northern Ireland has fallen behind the rest of the United Kingdom and the Republic of Ireland in legislating on this issue; and calls on the Executive to reform the regulations along similar lines to those in operation in neighbouring jurisdictions.

[Mr K McCarthy, Mr D Ford]