The Mega **Management Company** thread

silja

Are lifts really expensive? Because I pay half that in Dublin city (those with parking spaces pay a tad more), and we have a live-in caretaker, but only stairs.

The_Conductor

silja wrote: »

Are lifts really expensive? Because I pay half that in Dublin city (those with parking spaces pay a tad more), and we have a live-in caretaker, but only stairs.

I'm familiar with one development in Dublin who earlier this year had to spend 200k to renovate three lifts in their complex (and believe you me- they spent 50-60k in callouts and maintenance last year, so its probably a good investment).

Basically anything mechanical can and does break, and costs to keep in working order. Even a relatively simple gate system- could be expected to cost 4-5k per annum in upkeep.

The big killer this year for management companies is 40-50% hikes in insurance costs. The insurers are blaming a spate of claims after the bad weather earlier this year- alongside other factors. When you factor much lower restitution costs into the equation with the collapse of the construction sector, it is a bitter pill for many to swallow.

spirityboy

I know some of you have acted as directors before etc. How did you guys approach the subject of offering credit on service charges?

I'm director of a very large estate, we owe our suppliers a lot, and some haven't been paid in 6 months. A lot of shareholders owe us money, the good news if i can call it that is we are owed more than we owe. The bad news is a lot of those that owe us have debts outstanding more than one year. I'd estimate 50% of what is owed to us is over 24 months old. So IF we managed to call in all debt we'd be home and safe, but considering most of those that owe have owed for years, with times tight it's looking less likely that we will get that money in.


With the new financial year approaching I’m getting ready for the flood of "I don't have it" letters from people when we invoice them and say there will be no credit given in 2011. I know times are tough for people, I know people are out of work. I sympathise, I was out of work too for over a year, but I still managed to pay off my service charge within 3 months, mortgage etc. granted I have no savings left in the bank and sold my 3 year old car to get a 10 year old one. But that's life i guess.


What would others do in relation to extending credit? Would you only allow 2-3 months to pay in full after that off to collection? What about folks that come back and have been out of work? I really do sympathise with them, but I know of one that walked out of a job and is now claiming that he can't pay his debt. This person gets no sympathy from me as the money owed fell due in Jan 2010, they bought a new car, went on holiday and then quit their job and they are only coming to us now in November looking for credit, up till now they ignored all communications. They’re telling us they can only pay €50 a month, come January their debt will be over 2K. What about those that never bothered coming to the company looking for credit but as soon as we file in court come running with letters from the social welfare claiming unemployment?

Just looking for some advice on how to best handle credit without pissing off too many shareholders and also keeping the company afloat as best we can, one option is to obviously raise service charges so we can clear our debt but that seems unfair to those that do actually pay their fees on time each year. as it stands we have already had to cut some services like internal cleaning, window cleaning and grass cutting bin collection looks like it might be next or else general maintenance as it stands we take in just enough to cover insurance end electricity, even our agent hasn't been paid in months

markpb

We try to be as firm with people as possible, sending out reminders, etc and pointing out that we charge interest and pursue people through the courts. However, if someone claims they can't pay and tell us a believable story, we try to get as much as possible. If they'll commit to paying at least €40 per week, we usually settle for that. As long as they keep chipping away at it, we leave them alone.

You need to take the opposite approach with repeat offenders who simply choose not to pay. Interest needs to be applied to their account. Reminders need to be sent out showing how much the interest has increased their outstanding amount. They need to be taken to court and the board need to keep reviewing the solicitors results to make sure they don't slack. Those people will trip you up and cause pain for everyone else and dealing with them is never an easy task.

The_Conductor

I think a lot of us are now in the situation where we have to face running down services, and only keeping the bare core of necessary expenditure (such as insurance). Window cleaning, gardening, painting and all other general upkeep is probably going to fall by the wayside. Its simply no longer possible to run a management company when a sizeable portion of the members are in default- and try as we may- there is precious little we can do.

d125

Hi im just wondering where i stand any help would be greatful

The management company looks after 3 blocks of apartment (94) with underground car park, think around 20 have not payed,its a on going thing, last summer there was very little money and last week we got a letter say all services would be cut off as the company is running out of money

- structural insurance
- internal cleaning
- common lighting
- lifts
- access to the car park cut off
- bins

As im payin my fees where do i stand if the company run out of money

Paulw

d125 wrote: »

As im payin my fees where do i stand if the company run out of money

You'll be in the same place as those who haven't paid their fees, except you won't be chased for fees.

While those who are not paying are to blame, but everyone will be without the services.

It's a horrible situation, and you have my sympathy. Most management companies struggle with a number of people who don't pay their fees.

The sooner the better the Multi-unit Developements Bill is brought in the better, so that the courts can quickly rule on such situations.

How Strange

I reckon non payment of mangement fees and disruption to services will become a bigger problem over the next few years with owners either losing their jobs or as landlords struggling to pay fees.

We have our agm next week and I'm going to ask the management agent what are they doing to manage the debts because if an owner hasn't paid for last year then its unlikely they'll pay for the next year and then the debt becomes unmanagable. We have a significant debt from unpaid charges and I don't want it getting worse in 2011.

I think most conscientious owners will pay but there will be the minority who see the current economic situation as an opportunity to say they can't pay. I've got every sympathy for people on the dole or on reduced incomes but they are availing of services so they have to pay for them.

I just wonder what stance the courts would take on an owner who's on the dole perhaps with a family who has unpaid management fees. You'd hope that they would instruct the owners to pay anyway even if it's a certain amount per week to manage the debt.

The_Conductor

Even people who haven't lost their jobs are finding the going incredibly tough- how/why should they carry the non-paying company members? Ultimately you have a lease on a property- you do not own it. There are a hierarchy of debtors- the bank, the management company, other unsecured debtors. You are in breach of your mortgage covenants, by not paying your management charge- and everyone who does pay but does not have block insurance- is also in breach- which ultimately could be used as just cause to call in the mortgage.......

Without being callous, ignoring those who have lost their jobs- once interest rates go up- 80-90% of apartment owners are going to be totally screwed.

We have a massive problem, that needs to be addressed urgently.

How Strange

Exactly. Our household income will be down at least €200 per month (that's on top of approx €500 we're already down since 2008), we'll be paying creche fees of €900 from Sept next year so we'll be very much poorer. That said I 100% understand and accept that owning an apartment means I'm contractually obliged to pay service charges so one way or another we'll always find the money to pay them. We are fortunate (touch wood etc etc) that we both still have jobs but in general it will be tighter all round.

My concern is that the courts, if/when cases get to court, will go easy on people for not paying service charges because of their personal financial situation. Previously the courts took a very dim view of such cases and forced the owners to pay up including interests and costs or a sherriff would be sent in.

On the bus a few weeks ago I heard a man who lives in our development telling another man that he hadn't paid his charges for 2010 yet. He seemed quite proud of the fact. It took a lot of self restraint not to turn around and say something to him.

It's something I'm definitely bringing up at our agm because if bad debts are let slide for another year then they are most probably unrecoverable especially in cases where people would owe €3k+. You might collect the money in dribs and drabs but you'll probably never recover the full debt. Previously, owners had to pay bad debts when selling the property but the management company doesn't even have this advantage anymore.

Also at the risk of sounding callous, management companies and agents will have to be very aggressive from now on in collecting service charges.

The_Conductor

Courts are unlikely to be particularly lenient on people who don't pay- for the simple reason, these are leaseholds, not freeholds, and in the event of a breach of lease, it simply reverts to the Management Company. Unless there is an alternate arrangement setup- we will have management companies owning increasing numbers of properties, and with the adjacent issues associated with evicting people from 'their' properties. Of course- the leases could in theory be converted into longterm rental agreements- which might somehow qualify for rent-allowance (to be paid directly to the Management Company)- but I don't see this happening in the current straightened times.

We're in a similar situation to you- net income down 30-35%, creche fees shortly to start up, and a large number of people not paying their fees. Hell- today is the first day in almost 3 weeks that anyone could get their cars in or out of here- as the Management Company had no money for salt (and the entrance to our carpark is an exposed slope, with about 4 inches of compacted ice). Some residents chipped together and bought a few spades to try to keep access open, but gave up when external water pipes burst, and the place turned into an ice rink. Even 4x4s couldn't navigate it- and we haven't had post in over 2 weeks as the postie doesn't have a suicide wish......

Things are only going to get worse nationwide- and I don't hear any politicians coming up with any ideas on what to do with our development's of the last 10-15 years- other than ghost estates, and they are an entirely different issue.

silja

We just had our AGM last week, we'll be breaking even this year and thankfully, despite an insurance increase, there won't be a service charge increase. Wondering if this is standard or are most seeing an increase/ decrease? I just popped my cheque for 2011 charges in the post today- more than a month's rent worth- almost 2 month's after my 20% foreign landlord tax- but it is what it is. Just happy not to be making a loss.

Living abroad I wasn't there personally, but I hope the AGM minutes will state how many owners have not payed 2010 service charges... can they be "named and shamed" in AGM minutes?

Paulw

silja wrote: »

can they be "named and shamed" in AGM minutes?

Yes, they most certainly can.

d125

That was interesting reading. The problem of non-payment is getting worst. So the management company can cut all services if the are running out of money even if some of us have fees pay. Some people where saying get a solicitor on to the management company to get a injuction not clear on what this would do. Also the want the management to reduce some of the cost landscape and tv free air system 250 a year

Thank you for your help

Paulw

d125 wrote: »

So the management company can cut all services if the are running out of money even if some of us have fees pay. Some people where saying get a solicitor on to the management company to get a injuction not clear on what this would do.

An injunction to do what?

You ARE the management company.

If there is not enough money to pay for services, then what is the management agent supposed to do? They can only pay for services when revenue comes in from the management fees paid by the unit owners. They can't spend what they don't have.

Most budgets for a management company are based on all units paying their share.

d125

Thank you Paulw im new to this whole management stuff so what happend if the management company go bust. How deer is to set one up and what other problem could there be in setting one

The_Conductor

d125 wrote: »

Thank you Paulw im new to this whole management stuff so what happend if the management company go bust. How deer is to set one up and what other problem could there be in setting one

The entire development is vested in the Management Company. If the Management Company are struck off the Company Register- legally it is no longer an entity, and in theory all the property becomes the property of the Minister for Finance. It is a long and convoluted process to have a company re-instated, and can take years.

If the company simply goes bust, but still continues to submit audited accounts and complies with company law (though obviously the laws governing trading while insolvent would become an issue- and could result in the directors being struck off), then it continues to be a valid company, and its transactions are simply curtailed.

It is in no-bodies interests to have a management company struck off!!!!!

d125

Are the any healty and safelty issue with cutting off the light in common area and all other services ie bins and lifts

Paulw

d125 wrote: »

Are the any healty and safelty issue with cutting off the light in common area and all other services ie bins and lifts

Maybe they didn't cut off power, maybe the ESB (or other power company) did? In that case, there is no way around it.

I know in our development, we didn't pay the ESB for a while, due to shortage of funds, then the ESB cut us off.

As for bins, again, it can be down to the collecting company not being paid.

All services must be paid for.

d125

what solicitors are good with dealing with management company thank you

Paulw

I don't get your question.

Are you taking action against the management company? If so, for what?

Don't forget that you ARE the management company, you're a member of it.

markpb

d125 wrote: »

Are the any healty and safelty issue with cutting off the light in common area and all other services ie bins and lifts

Yes, but if there's no money, there's mo money. People (not aimed at you) seem to think that some menacing profit making company is keeping their cash and threatening them. They think the agent should be paying the bills if the owners don't.

Chiqqi

We have 18 units in our development located in Laytown Co. Meath and are self-managed. This includes our insurance, gates to the garage, a lift, and lights. the lift is rarely used but we have to maintain a maintenance contract on it and the gates. The rest is for accountant/auditor (necessary for CRO filing) and filing fees.

We organize a monthly clean up rota for the garage but it is hard to get most people to partake in 2 hours each unit monthly but they don't want to use a management company. Those who don't partake pay an extra 200 per year. Otherwise, we have no problems. We keep in touch with each other via emails when anything arises. We are all owners since 2006 and with no insurance claims have reduced our insurance costs.

If you are using a management company you need to review their charges - most increases are for their own managing fee. You must have at least two of your own residence owners as Directors of your management company who should be watching the costs. If you have an AGM vote you can change your management company or decide to do it yourselves. If you have unemployed people as owners now you could actually create a job for someone if you have a bigger complex that needs more maintenance.

d125

To answer your question paulw. We are having a problem with non payment of fees 94 apartments about 25 have not payed this year not sure of the number for last year. The management company are running out of money and some people are sayin get a solicitors, im just trying to find out where we stand on different issue. Some are sayin service beening cut are a healty and safety issue like light to get to ur apartment and bins collection.The management company are not easy to deal with surely its in we the tenants and the manangement company to trim money from the budget to keep it running


does anyone have these free to air system in aparment and paying year fees, we are paying 250 a year now ther very little maintance on 3 dish on top of a build can i be charged this for the next 40 years, this would cost the 94 apartments 940,000????

The_Conductor

Chiqqi wrote: »

We have 18 units in our development located in Laytown Co. Meath and are self-managed. This includes our insurance, gates to the garage, a lift, and lights. the lift is rarely used but we have to maintain a maintenance contract on it and the gates. The rest is for accountant/auditor (necessary for CRO filing) and filing fees.

We organize a monthly clean up rota for the garage but it is hard to get most people to partake in 2 hours each unit monthly but they don't want to use a management company. Those who don't partake pay an extra 200 per year. Otherwise, we have no problems. We keep in touch with each other via emails when anything arises. We are all owners since 2006 and with no insurance claims have reduced our insurance costs.

If you are using a management company you need to review their charges - most increases are for their own managing fee. You must have at least two of your own residence owners as Directors of your management company who should be watching the costs. If you have an AGM vote you can change your management company or decide to do it yourselves. If you have unemployed people as owners now you could actually create a job for someone if you have a bigger complex that needs more maintenance.

To be honest- I'm guessing you've never had an insurance claim- our insurance alone per unit is over a grand....... Burst water pipes last year that damaged property, a litigious visitor who slipped on steps, a drunken driver who decided to drive through our security gates and barriers, fire/smoke damage from a failed DIY session etc- I could go on and on......

I do agree with you- its a great idea for owners to take over the running of a development- however, what often happens is the same core bunch of people end up getting tasked with everything- and if you are unlucky enough to be an owner/occupier and a director- its like waving a flag in your window for people to turn up at any time, day or night, to bitch about whatever their current bugbear might be. Its also an invitation from the non-resident directors for abuse- who wants to be surpervising a blocked sewage pipe in a blizzard, or opening security gates at 4AM because some idiots have put the wrong code in more than 6 times and its locked shut as a security precaution.......

We've been managing our own complex for 13 years now, but are really getting into trouble now. Due to insurance claims- our premia have soared. We have cut the bones out of activities, everyone takes care of their own bins, just about the only activity that the management company do is insurance and a maintenance contract for our insurance systems, along with 2-3 times a year clearing out gutters and window cleaning (by the same local guy).

Its great in theory to run the company yourself- and indeed it can work very very well- however sometimes it would be easier to have an agent willing to pick up the slack.

A big big problem with self-management- is complexes with large numbers of let units- where the owners only care about their monthly rent, never ever lend a hand when its needed, and their only concern is minimising any expenditure the company possibly can- to the extent that you get 6 or 7 additions under AOB at the AGM questioning just how necessary it is to maintain a security system, or can't we wait until several lights are out before replacing them (we have street lights in the carpark), or why is anti-slip paint necessary on concrete slopes? It really can get soul destroying. It tends to be the owner occupiers who really care about the complex- no-one else gives a damn, but they're only too happy to let the couple of enthusiastic folk do all the chores year in, year out......

We really need to have the question of management companies satisfactorily dealt with by someone soon- because ghost estates are only the tip of the problem with developments over the last decade.........

Paulw

d125 wrote: »

To answer your question paulw. We are having a problem with non payment of fees 94 apartments about 25 have not payed this year not sure of the number for last year. The management company are running out of money and some people are sayin get a solicitors, im just trying to find out where we stand on different issue. Some are sayin service beening cut are a healty and safety issue like light to get to ur apartment and bins collection.The management company are not easy to deal with surely its in we the tenants and the manangement company to trim money from the budget to keep it running

Sorry, but you really need to go and do some research. Understand your own situation before you make a fool of yourself. Educate yourself as to what a management company is, how it's funded, etc.

If people are not paying and the management company have no money, they clearly they can't provide services. Bins aren't collected for free. Electricity for lights isn't free. If they don't have the money, how are they supposed to pay for such services? Even if it is a health and safety issue, if they've no money, they've no money. They can't just pay for services with nothing.

Bottom line, your issue is not with the management agent, nor management company, but it's with the 25 or so who haven't paid. Those are the people you should be taking to court (and it's a long and complex process too).

Yes, sure they can trim some things in the budget. Will that solve everything? In short, no, it won't. You will still be short of funds.

As I said before, the budget is drawn up on the basis of what the company plans to spend in a year on services, and is then divided up, so that each unit pays it's appropriate share. If just one person doesn't pay then some service will be effected.

At your next AGM, you can certainly propose that some services are cut/reduced. You should go through your management company finances and budget and see where costs can be trimmed. But again, no matter how much you trim, the issue is really with those who are not paying.

d125

i have read up on the office of the director and corporate enforecement and was on the cro website. The account where due on the 11/11/10 and have not be list on the website not sure what this must as i know there are some reason the can get longer. we have 5 director and each have 30 vote each and there are only 94 apartment are we not out voted for everthing as 23 have not payed fees.

thank you im slowly learning about this, someone should do management company for dummies

Paulw

d125 wrote: »

we have 5 director and each have 30 vote each and there are only 94 apartment are we not out voted for everthing as 23 have not payed fees.

Each director should have 1 vote, the same as any other member of the management company.

That's unless the directors are the developers who have not handed over control of the management company to the members.

At each AGM every member can vote, and each vote is equal. Members can also propose items for the AGM to be voted on. This should be done 14 days prior to the AGM, and you should receive notice for the AGM at least 21 days before the event.

You really need to read your Lease Contract (your solicitor should have a full copy) and also the Articles of Association for your management company.

pinkypinky

d125 wrote: »

someone should do management company for dummies

http://www.amazon.com/Essential-Guide-Apartment-Living-Ireland/dp/0955097428

This is the best summary I have found, but you should also look at the National Consumer Agency's guides on their website.

spirityboy

Paulw wrote: »

At each AGM every member can vote, and each vote is equal. .

Paulw should that not be each fully paid up member can vote and all votes are equal. I mean someone that owes outstanding service charges should not be allowed propose themselves as a director and sure as hell shouldn't be in any poisition to influence how the company is run and how money is spent.