Developers' Roles and Responsibilities
Developers must secure full local authority planning permission and comply fully with the planning conditions for a new development. If you are having construction work carried out or buying a new property, the work must also fully comply with the building regulations. Proof of this compliance should be contained in your title document at closing of sale.
Primary responsibility for compliance lies with designers, builders and building control authorities. The building control authorities have powers to inspect design documentation and buildings, and can prosecute breaches of the regulations.
Taking in charge
"Taking in charge" refers to the point where a local authority takes on the management and maintenance of public lighting, new roads, open spaces, car parks, sewers, water mains, drains and other common amenities in the development.
Before you buy, you should consult your solicitor about what will be taken in charge by the local authority and what will be the responsibility of the management company.
Developers are legally obliged to provide sales agents with details of:
- The services and public areas to be taken in charge by the local authority
- Services remaining under the sole control of the management company.
Developers and management companies
Developers usually appoint a management company at the outset of a new development, often before the first unit is sold.
The developer is generally the initial controlling member of the management company, and decides on services to be provided and how much owners will be charged for them.
Common areas
The transfer of ownership of common areas from the developer to the management company is set out in a legal document known as the “Management Company Agreement”, or the “Contract for the Sale of the Common Areas”.
Final completion of the development is usually the primary trigger for taking in charge of services by local authorities and the transfer of common areas from the developer to the owners.
Using your purchase contract, your solicitor should be able to explain to you when control of the management company and transfer of common areas are scheduled to take place.
A typical standard phrase in the contract is that this transfer will occur “as and when the last unit has been sold”.
While owners may become members of management companies after buying their units, developers and/or their nominees often continue to control the company until most units are completed or sold.
The wording of your contract to purchase and the management company’s Memorandum and Articles of Association is very important in setting out how the management company is operated and controlled.
These documents should also clarify your rights as a buyer and member of the management company. It is important that your solicitor explains these rights to you.
If you buy and live in your unit before the completion of a development, you may have little or no say in how the development is being managed until completion. Even so, developers should provide half-yearly updates regarding the activities and financial status of the management company.
If you have concerns about services that are or are not being provided by the developer, you should examine what legal options are open to you under your contract with the developer.
Snagging
Snagging involves any potential defects or uncompleted work in a new building. It is generally the last phase of the construction process, and a snag list is compiled prior to final closing of sale.
You may need to hire a competent and qualified construction industry professional to complete your snag list. This list should be presented to the developer in writing so that problems can be rectified before purchase is completed.
Recently built homes and guarantees
Most new houses being built in Ireland are registered by the builder with an insurance scheme such as Homebond or Premier Guarantee. These schemes cover structural defects in new houses for 10 years after completion of the house.
So if your home is less than 10 years old and you then find it has structural problems, get a structural survey and check whether your property is covered by Homebond or Premier Guarantee or a similar guarantee scheme.
Learn more
Read a residents' checklist for snagging common areas of a development
Download a general snag list at Brand-NewHome.co.uk
Read more about snagging at AskAboutMoney
The Irish Homebuilders Association (IHBA) has developed a Code of Practice with the National Consumer Agency for IHBA members. This code sets out best practice guidelines for the maintenance and management of common areas and the provision of common services in multi-unit developments.
Confused? Check out our jargon buster
How well are you doing?
Answer this simple question to see how well you understand service charges.
Question: You might sometimes see the term 'taking in charge'. What does it mean?
Answer A: The management company decides to change agents
Answer B: The management agent takes over a housing/apartment development
Answer C: The local authority takes over some services and infrastructure for the development