The Multi-Unit Developments Act 2011

Author:Ms Deidre Sheehan
Profession:Arthur Cox

The Multi-Unit Developments Act 2011 (the "Act") was signed into law by President McAleese on 24 January 2011 and all sections were commenced with effect from 1 April 2011 by virtue of a Commencement Order dated 2 March 2011 by the Minister for Justice and Law Reform.

The stated aims of the Act are:

to seek to address problems relating to the ownership and management of the common areas of both existing and future developments containing a multitude of units; and to facilitate the fair and effective management of bodies responsible for the management of those areas. The Act applies to any "Multi-Unit Development" ("MUD"), being a development on land on which there stands a building or buildings comprising a unit or units where it is intended that the units share amenities, facilities and services and where the development contains not less than five units intended for residential use. In tangible terms, the Act applies to apartment blocks, housing estates and mixed use developments where there are five or more residential units1. The Act does not apply to developments that comprise solely commercial units or to those parts of a mixed use development that solely serve commercial units.

A "residential unit" is characterised by the existence of self-contained bathroom and cooking facilities intended for exclusive use by the occupants of that unit. Interestingly, particular reference is made to childcare facilities which do not principally share facilities and amenities with commercial units in a development and so are included in the definition and treatment of "residential unit" for the purpose of calculating the number of units within a development.

Of most immediate concern for property practitioners are those parts of the Act that deal with the transfer of ownership of the common areas in a MUD. These provisions only apply to MUDs where there are five or more residential units.

The simplest scenario, being a MUD (yet to be constructed, already completed or anywhere in between) where no sale has yet occurred, is governed by Section 3 of the Act. That section provides that a person shall not transfer a residential unit in a MUD prior to (i) the establishment of an owners management company ('OMC') at the developer's expense, (ii) the transfer of the legal interest in the relevant parts of the common areas and any reversionary interest in the residential unit to the OMC, (iii) the provision of construction and fire safety certification and...

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