In April, we reported on the Multi-Unit Developments Act 2011 which provides a statutory framework for multi-unit developments (both mixed use and residential only) containing at least five residential units with shared amenities, facilities and services.

The Act set 30 September 2011 as the deadline for the transfer of the common areas in existing developments (i.e., developments in which at least one residential unit has already been sold) to the owners’ management company. The Law Society has offered the following guidance on this particular obligation:

• While there is no sanction for non-compliance, there is a continuing obligation to effect the transfer even though the 30 September 2011 deadline has passed. The benefit of the obligation rests with the owners’ management company which can seek to enforce the provisions of the Act. Alternatively, where unit owners do not have control of the owners’ management company, an individual unit owner may, in his/her capacity as a member of the company, take legal proceedings against the developer. However, the costs of such proceedings are likely to be prohibitive for individual unit owners.
• It is possible to acquire good and marketable title to residential units in a multi-unit development, even in circumstances where the common areas have not been transferred. Prior to the introduction of the Act, good and marketable title to such units could be acquired on the basis of there being in place an enforceable contract to transfer the common areas to the owners’ management company at the appropriate stage of the development. The Act does not detract from this position. It provides the unit owners and the management company with additional statutory rights to ensure that the common areas are transferred and, indeed, that they are transferred earlier than might have been the case under the contracts to transfer the common areas (which in many cases require all units to be sold prior to transfer).

Contributed by Tara Rush.

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