Management Companies - please explain

mel123

Ok, here is how i think it works:

The developers appoint a mgt agent.
The mgt co is actually all the people who own a house/apt in the estate.
The mgt co cant get rid of the agent until a specified time has lapsed?? Is this in the contract that we would have signed by the way?
Have the develops anything to do with the mgt co/agent now that the estate is finished being built (for about the past year)??
If you get rid of ur mgt agent, u must apply to the council who will then 'take over' the estate??

Any websites in relation to this would come in useful for me also.

Thanks in advance.

Sponge Bob

middle of the home page


http://www.odce.ie/

a murky situation but you are basically dead right, if the guidelines there are not followed to the letter complain immediately to the odce .

councils "take in charge" actually but wait 2 or 3 years after the place is fully finished first

markpb

Normally what happens is the developer and owners form the management company but, until all the units are sold, only the developer has a vote in the running of the estate. One of the things they do, while in charge, is hire a management agent to look after the estate. While you're in this phase you have no control over the agent or anything else.

If you're not happy, you need to wait until the developer resigns from the management company and the contract with the managment agent lapses (a year I think) to appoint a new one or look after the running of the estate yourself. At this time you can also apply to the LA for a taking in charge.

The developer of my esatate stood down a month ago. The estate was started in 1999, the first units were occupied in 2002 and the last ones finished in 2003. I'm not sure why it took them so long to sell the last unit or what reason they had for waiting. Thankfully the only contact we have with them now is the loan they gave to the management company at the start.

Oracle

The word murky has been used already and I can't think of a better word to describe the relationship between management agents and developers. I've no direct proof, but anecdotal evidence suggests there's often more than meets the eye when it comes to these arrangements.

For example, the same managing agents being chosen to run many newly built estates, sometimes with less than great track records. Who decides what company to choose? and how do they come to that decision? It would be easy to see how deals could be struck between agents and developers. Considering I suspect, that most agents are in a complex for life once they get in at the beginning; so that's something that has to be worth a lot to the agents.

The water becomes even muddier when the management agents are also letting units within the new development and taking a letting fee. Then there's a conflict of interest; who are the management agents acting in the interests of "the owners" who employ them to run their properties, or the "the landlords" own pay them letting fees? For example, say you're an owner who is unable to sleep due to noise from the tenants upstairs. You complain to the management company, but the tenants you're complaining about are renting from them. It's not in their interest to upset the tenants they have rented to. So the situation is less than clear cut. Also when rented properties comprise a large proportion of the properties within one development it becomes the job of the agent to keep the money coming in for their landlords rather than ensuring the owner occupiers are happy. Whose interests take priority?

Of course that's not all that's going on in the managing agents game. There's also the oldest trick in the book of agents invoicing the management company (i.e you the owners) €X for a service (for example cleaning) but actually paying €Y for the service to the contractor. There's a tidy little profit to be made every time that's done. Multiply this by the number of different blocks under one agents management and I'd say the sums could be considerable. Take a look at the annual accounts of your management company, there'll probably be a lot of services been billed for separately. I'm not saying this is going on in every case, but I suspect in a lot.

The relationship between agents and developers reminds me of the one between estate agents and mortgage brokers, recently so effectively exposed by the Prime Time Investigates television programme. There's the temptation of "you scratch my back , I'll scratch yours"; for them to enter mutually beneficial arrangements, to the detriment of property owners. Owners need to take matters into their own hands if they're not satisfied with the running of their developments. What the Prime Time programme advised is also applicable to property owners, who are in effect, buying a service from these managing agents- buyer beware.

mel123

I have also heard of a 'trick' where the developers hang onto a few properties and not sell/finish them, and therefore it takes longer to get rid of the management agents, is this true??

RainyDay

mel123 wrote:

I have also heard of a 'trick' where the developers hang onto a few properties and not sell/finish them, and therefore it takes longer to get rid of the management agents, is this true??

Yes, though to be honest, I don't know that the objective of this trick is really to retain control. The theory is that the management company remains in control of the developer until the last unit is sold. In theory, this isn't a bad idea, as it ensure that someone is in charge of the estate while the buyers are moving in.

The problem arises when the developer opts to keep a few units and rent them out himself. He can therefore retain control of the management company for ever!

Buyers should work with their solicitors BEFORE making the final purchase to ensure that there is some time limit placed on the developer's control of the management company.