Publishing Date; Thursday the 5th day of September 2024.

 

Q Both my apartment, and my neighbour’s apartment, are suffering significant water ingress as a result of a defect from an external wall. The Management Company has agreed to fix the source of the leak and repairs to the external wall are currently underway via scaffolding etc. They are refusing to carry out internal repairs to my apartment, stating they do not carry out internal repairs and that we can submit a claim through the block insurance policy.

Given the water ingress is originating from a common area is the Management Company responsible for internal repairs.  The Lease / Management Agreement is silent on this point. The damage is significant, affects two rooms making them almost uninhabitable, an estimate received to repair one room details stripping and packing walls etc and is €6,000, I expect the second room will cost the same.

There is an excess of €5,000 on the insurance policy, my experience has taught me that insurers do not pay out for building defects. In any event, I do not feel this should be the solution. Does the Management Company have any responsibility for internal repairs and how do can I compel them to carry out same.

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A. Block insurance policies are held in the name of the owners’ management company (OMC), cover certain unforeseen risks, but do not cover latent defects and it is unlikely to yield any relief for you. Latent Defect Insurance would be the policy to submit your claim if one exists and cover extends beyond the repair of the defect itself. This policy would traditionally stand for ten years from completion of the development with only five years available to claim for say a Homebond policy.

 

The OMC is responsible for the common areas and its performance if they have been transferred from the development company. The ability for your OMC to rectify the damage in your property would be affected by many factors anchored in pragmatism. Where the common areas are not transferred you may be able to make a claim against the development company who remains the owner of the common areas. Litigation would be costly, time consuming and exhausting in either scenario where no agreeable resolution is obtained. Evaluate the cost of litigation to that of the remedial works.

 

It is not uncommon for OMCs to hold an insurance policy for the development even when the common areas have not yet transferred and remain in the ownership of the development company. This is because of the failure to transfer the common areas from the development company to the OMC. Section 5 of The Multi-Unit Developments Act 2011 requires that as of the 1st day of October 2011 all common areas should be vested in the OMC.

 

There is a planned scheme to fund the fixing of defects in apartments built between 1991 and 2013. This system is being rolled out when local authorities are currently only required to inspect between 12 and 15% of new buildings notified to them. This is a dangerous failure in policy where the current cost is expected to be €5 billion for Mica, Pyrite and apartment defects combined. Many expect this figure to balloon. Increasing the statute of limitations, proportionate accountability, accessible and cost-effective relief from the responsible parties of construction defects is greatly needed.

 

Paul Huberman FSCSI FRICS is a chartered property and facilities manager, and a Fellow of the Society of Chartered Surveyors Ireland and the Royal Institute of Chartered Surveyors. 

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Author: Paul Huberman of H&H Property Management Consultants Ltd

Publish Date: 04/09/2024