Campaign groups are raising serious concerns about how owners' management companies run apartment and housing complexes.
While some are well run, many are struggling to deal with a legacy of bad debt, insufficient sinking funds and a lack of expertise as the rules around OMCs get more onerous each year.
Owners' management companies - or OMCs - are firms that manage apartment buildings and houses in private developments, with residents often serving as directors on them.
Pat Montague, who co-ordinates a campaign group called MUN Act Reform Group, appeared before the Oireachtas Housing Committee on the issue yesterday.
He told Fran McNulty and Jackie Fox apartment complexes need bigger reserves as they age.
"The concern I have is particularly because of the age of the apartment stock," he said.
"There were about 150,000 apartments built during the Celtic Tiger era – they are now coming to maturity in terms of age.
"That's the time at which issues like roof problems start manifesting themselves, lifts have to be replaced, where windows have to be replaced and this is where the costs kick in."
Mr Montague said one of the big issues is that there is no register of such management companies.
"Nobody actually knows how many there are - the State doesn’t have a register of owners' management companies," he said.
"It’s not actually required by law. It’s very indirect and very, very problematic."
Mr Montague said in many cases people serving on such companies do not have a background in the sector.
"The vast majority of people who are directors are volunteers," he said.
"Under the legislation, they have legal responsibility for the health and wellbeing of everybody living in that complex - as well as lots of other legal responsibilities - and the vast majority of directors haven’t a clue that’s what they signed up to.
"These are people who don’t receive any training."
Sinking fund
Mr Montague said the issue of a sinking fund - which is usually built up for specific purposes including refurbishment, improvement or maintenance - "becomes imperative".
"The problem is if we don’t deal with the leaky roofs, that impacts on the apartments - you get damp and mould - it also undermines the fabric of the building and becomes more costly to address".
Mr Montague said the shortfall in sinking funds "could potentially make the cost of defects look like a teddy bear’s picnic" owing to rising costs if issues are not addressed.
Mr Montague said a 2019 report found that a number of owner management companies were on the verge of insolvency.
"It is a grave situation" he said.
"You have to look at having proper oversight and regulation."
Mr Montague said there needs to be a regulatory unit established in the Housing Agency but is being held up as responsibility is split between the Department of Justice and Housing.
"The Housing Agency are ready to go on this, but nothing can happen until responsibility is transferred," he added.
You can listen to Behind the Story which is available on the RTÉ Radio Player.
You can also find episodes on Apple here, or on Spotify here.
