Ireland: Interplay Between The MUD Act And Insolvent Development Companies

Last Updated: 8 January 2019
Article by Kelly O'Hara
Most Read Contributor in Ireland, September 2019

Lee Towers Management Company Limited v Lance Investments Limited (In Liquidation) & Ors [2018] IEHC 444

A recent High Court case, Lee Towers Management Company Limited v Lance Investments Limited (In Liquidation) & Ors serves as a helpful reminder of the extensive statutory rights now available to both unit owners and owners' management companies under the Multi-Unit Developments Act 2011 (the "MUD Act") to help with the running of multi-unit developments. It also highlights limitations in enforcing such rights against insolvent companies. In this case, the High Court rejected an argument by an owners' management company that the liquidator of an insolvent development company could be compelled to carry out remedial works to the common areas of a multi-unit development ahead of paying the preferential and other creditors of the company.


Lance Investments Limited and Lance Holmes Limited (the "Companies") developed the apartment complex known as Lee Towers in Cork in and around 2001 and established Lee Towers Management Company Limited (the "OMC") to take title to (and responsibility for) the common areas of the apartment complex. The title to the common areas was never transferred to the OMC and the Companies were wound up by order of the High Court in May 2010 on foot of a petition of the Revenue Commissioners.

Various defects subsequently came to light in the apartment complex and the OMC obtained leave of the High Court in 2014 to issue Circuit Court proceedings against the Companies (In Liquidation) under s. 24 of the MUD Act to, amongst other things, seek to compel the Companies to remedy the defects.

Circuit Court decision

In July 2017, the Circuit Court made the remedial orders requested under s.24(5) of the MUD Act and ordered the Companies to:

1. carry out various remedial works to the common areas of the apartment complex to comply with planning permission and building control; and

2. reimburse monies already spent by the OMC on repair of the common areas.

The Circuit Court also ordered the Companies to transfer the common areas of the apartment complex to the OMC. As the Companies were grossly insolvent, the liquidator of the Companies did not comply with the Circuit Court's orders.

High Court decision

In seeking to enforce the remedial orders of the Circuit Court, the OMC argued that the making of an order under s. 24 of the MUD Act displaces the statutory scheme of payments on liquidation and provides the OMC with a right to enforce the obligations in priority to other creditors because the remedial orders were mandatory and must be performed.

The High Court did not accept this argument. It examined general legal principles applicable to the status of a company's assets after a winding up order has been made, a liquidator's obligations at law and the provisions of the MUD Act and ultimately determined that:

"the owners' management company is precisely in the position that the MUD Act intended and has available to it statutory remedies, as well as remedies in contract. But the effect of the order of the Circuit Court is that the owners' management company is an unsecured creditor. No provision exists to elevate a remedial order under s. 24(5) to preferential status or to displace the scheme of distributions on an insolvent liquidator. The making of a court order does not in itself give such a priority."

The High Court was also asked to consider if the MUD Act had retrospective effect given that the Lee Towers development was completed long before the MUD Act came into force in 2011. The OMC argued that any other interpretation was inappropriate as it would mean that the MUD Act would only apply to developments commenced after 2011. The High Court determined that the MUD Act has retrospective effect to some extent in that it creates a statutory means of enforcing existing obligations and rights.

With regard to the obligation to transfer the common areas of the apartment complex to the OMC, the High Court held that this obligation was specifically enforceable against the OMC notwithstanding the insolvency of the Companies. It noted that the OMC's right to take the title was a proprietary right and attached to the title of the Companies in the relevant lands prior to such insolvency.

The High Court did not determine who would bear the costs of transferring the title to the common areas, particularly in relation to mapping. Ms Justice Baker parked this pending hearing further arguments on the matter.

General comment

Although the OMC was ultimately unsuccessful in seeking to have the liquidator carry out the remedial works, this case still highlights the value of s.24 of the MUD Act generally. As the High Court noted:

"the MUD Act creates a form of statutory injunction by which a developer can be compelled to carry out works of repair to comply with planning and building regulations requirements. That is, in effect, a statutory form of specific performance."

In addition to issues of disrepair and non-compliance with planning and building control legislation, s.24 of the MUD Act also provides a statutory remedy (via the Circuit Court) for all manner of disputes which might affect multi-unit developments including in relation to service charges, the management of an owners' management company, voting rights, enforcement of lease covenants and the form of the legal documentation for a scheme.

As Circuit Court judgments are not recorded, it is not possible to establish the extent to which the provisions of s.24 of the MUD Act have been invoked since 2011 to help resolve disputes arising in relation to multi-unit developments. It is possible that these powers are being underused at present, however a key takeaway is that there is a lot that can be done under the MUD Act when disputes in relation to multi–unit developments arise.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions