THE SUSTAINABLE COMMUNITIES & HOUSING COMMITTEE 

MULTI-UNIT DEVELOPMENTS ACT 2011

IMPLEMENTATION

Dispute Avoidance -

Dispute Resolution: Statutory, Contractual, Voluntary.  

JAMES O’DONOGHUE

SEMINAR DUBLIN CASTLE 5 APRIL 2011

COPYRIGHT RIAI

Structure:

• Dispute Avoidance – Dispute Resolution

• Characteristics of MUDs – from a potential Dispute perspective

• Typical Development Phase agreements & Ownership Model

• Dispute Resolution Provisions in the Act

• The Contracts– Opportunity to close gaps in Dispute Resolution options

• What would we like to happen when something goes wrong ?

• Who might help ?

• Dispute Avoidance.

Dispute Avoidance – Dispute Resolution

• In drafting, think of Avoidance as well as Resolution provisions.

• Techniques well developed:– Negotiations skills, – Mediation, – Conciliation (Mediation – Recommendation) Med-Rec – Expert Determination, – Court Proceedings, – Alternatively, Arbitration.

Characteristics of Multi-unit Developments

• Variety of Developer types: Private Capitalist: Not for Profit Social: Local Authority, etc.

• New Build – Unique design for each location – one-off relationships.

• Buyers are Consumers – High level of trust – Buyers expected to live in close proximity – quiete enjoyment – often family homes – high expectation.

• Technically and aesthetically demanding.

The Legal Architecture – Typical:

• The “ Land” Agreement between;

(1) Developer /Lessor and (2) Management Company and (3) Buyer/Lessee.

With maps, plans and draft Certs of Compliance displayed .

• An Agreement between Management Company and the

Buyer/Lessor whereby the Lessor becomes a Member

• Building Agreement between Building Company (usually the

Developer, not always) and Employer / Buyer - with an Arbitration Clause and with Specifications and Drawings relating to the specific unit in its context.

Typical Development Model

OMC

Developer

Builder

Apartment Purchaser

Land Ownership Entity

Arm of Developer or Contracted Out

Building Contract

Purchase Agreement

Usually owned by Developer

Facilities Manager

Typical Ownership Model

OMC

Membership

Apartment Owner

Landlordship

Facilities Manager

Section 3.—(1) A person to whom this section applies shall not, … transfer his or her interest in a residential unit in a multi-unit development …unless —……..

• (d) a contract in writing is entered into between the developer and the owners’ management company concerned prior to such transfer setting out the rights and obligations of each of those persons relating to the completion of the development and which includes particulars of the arrangements relating to—

• …........– (iv) the process for resolving disputes between the parties to

the contract as respects the completion of the development.

Section 24.—(1) A person specified in section 25 may make, in respect of a multi-unit development, an application to the court—

(a) for an order under this section to enforce any rights conferred, or obligation imposed, by this Act or any rule of law, or

(b) for an order relating to any matter to which reference to making an application under this section is made in this Act.

Section 25.—(1) The following persons may apply for, or appear and be heard at an application for, an order under section 24:

(a) the owners’ management company relating to the relevant

multi-unit development or a part of the relevant multiunit

development;

(b) any member of such an owners’ management company;

(c) any trustee under a will, settlement or other disposition of

land by such member;

(d) the personal representative of a member of such an

owners’ management company;

(e) the developer of the multi-unit development;

(f) with the permission of the court, such other person as the

court sees fit.

Sections 27 and 28 - Mediation

• Mediation Model well developed – similar to PIABs and PRTB models.

• Facilitative Mediation now well established .

• New Court Rules for Mediation.

• Significant increase in number and range of Mediation Service Providers.

Section 29

• Nothing in this Act shall be taken to derogate from any Right or Power which may, whether before or after the passing of this Act be vested in any Person or Court, by Statute or otherwise and the Powers conferred by this Act shall be in addition to and not in substitution for such other Rights or Powers.

Contractual Models – Opportunity to close gaps and Dispute Resolution options.

• Golden opportunity to improve the Agreements– The “Land - / space” element, – The OMC suite of Agreements, – The Building Agreement.

• Ensure that Dispute Resolution Provisions are consistent with the terms of the Act. – i.e; That Arbitration is at the option of the Consumer / Buyer,

• The introduction of stepped Dispute Resolution Clauses providing for Mediation or Conciliation as Step 1 (save for “urgent” applications”).

• Statutory Adjudication – For the future

What would we like to happen when something goes wrong ?

• That the Rights and Obligations of the parties are sufficiently clear to help identify the problem and the responsible party.

• That the problem can be dealt with speedily – preferably without resort to third party help or the Courts.

• That the provisions for Resolution start with Negotiation and escalate to third party help.

Who might help ?

• Facilities Manager,

• The Parties Solicitors,

• Mediators: Legal for predominately legal issues;

Technical for predominately technical issues,

• Arbitrators: Greater emphasis on Party selection,

Dispute Avoidance.

• Good Contracts – Well thought out and comprehensive, legally and technically.

• Good Faith !

Thank you.James O’Donoghue