Management Fees 2010

eden_my_ass

Apologies if similar exists, I couldn't find it if it does....management company AGM time again for my mixed apartment/house complex and we've been issued with an invoice for 1200 for this year, same as 2009 and 2008. It was argued last year that there should have been more leeway for savings in a recession and we were assured by the management agent that it would depend how the year went and certainly 2010 should be different.

So, how has your fee changed from 2008-2009-2010....assuming completed developments where the needs and services for those years haven't changed (for simplicity). I'd be interested also in knowing where savings were made if possible??

athtrasna

Did you get a breakdown of the budget with the invoice for fees? I know we're about to agree budgets and this year's fees for our development (I am an owner-director) and the plan is not to decrease fees but to increase contribution to the sinking fund as we have a €30k expense coming up in the next 12-18 months and we need to make sure there's money to pay that and still something left in the sinking fund. It's better than introducing a levy to pay that bill (re-paint).

BTW we've made savings by switching landscaping contractor, common area cleaners and refuse collection providers.

irlrobins

Like Athtrasna, my MC has reduced costs in several areas (refuse, landscaping, auditor, etc) but have kept fees the same to allow for more money to enter the sinking fund. Also bear in mind that insurance is one area where prices have gone up. But again, ask for the breakdown in budget to see where the revenue from fees is going. If you're not happy with any portion of it, raise it at the AGM.

eden_my_ass

athtrasna wrote: »

Did you get a breakdown of the budget with the invoice for fees? I know we're about to agree budgets and this year's fees for our development (I am an owner-director) and the plan is not to decrease fees but to increase contribution to the sinking fund as we have a €30k expense coming up in the next 12-18 months and we need to make sure there's money to pay that and still something left in the sinking fund. It's better than introducing a levy to pay that bill (re-paint).

BTW we've made savings by switching landscaping contractor, common area cleaners and refuse collection providers.

Have the budget and last years figures in front of me now;

Landscaping, no change (would have assumed a more aggressive price this year)

Cleaning, slight decrease (odd breakdown but seems to be a saving)
Block Policy, slightly up (no claims last year I'm aware of, cost to rebuild should be down)
ESB, significantly up (note 'ESB', not 'Electrcity'...time to change I think)
Phone, slightly up (legal requirement for lift phones apparently)
Refuse, slightly up

Sinking fund contribution hasn't changed....

Interestly one of the few things that came down is the management agents fee itself

Cookie_Monster

eden_my_ass wrote: »

Landscaping, no change (would have assumed a more aggressive price this year)
Cleaning, slight decrease (odd breakdown but seems to be a saving)
ESB, significantly up (note 'ESB', not 'Electrcity'...time to change I think)
Phone, slightly up (legal requirement for lift phones apparently)
Refuse, slightly up

I'd be questioning these, why haven't they fallen/fallen further, especially Landscaping and ESB?

Even the phone shouldn't really be up despite the lift phone (which would have been in the lifts from day 1 surely?)

eden_my_ass

Cookie_Monster wrote: »

I'd be questioning these, why haven't they fallen/fallen further, especially Landscaping and ESB?

Even the phone shouldn't really be up despite the lift phone (which would have been in the lifts from day 1 surely?)

I'll be questioning alright don't worry.

Theres 4 lifts, which cost 11,500 a year for maintenance contract and 1,200 a year for phones (line rental/subscription I guess?)

godtabh

I'm a director and we had a change halfway through last year. The change resulted in an inital €200 reduction and that price is been maintained this year despite lower costs.

Savings are been used to pay our debts and the sinking fund. We have lots of fees owed. Hoepfully we'll get out standing fees paid some day!

eden_my_ass

godtabh wrote: »

I'm a director and we had a change halfway through last year. The change resulted in an inital €200 reduction and that price is been maintained this year despite lower costs.

Savings are been used to pay our debts and the sinking fund. We have lots of fees owed. Hoepfully we'll get out standing fees paid some day!

That sounds like a more progressive attitude, even this policy of issuing invoices before the agm seems to be cart before horse to me. As much as I don't want to be a director, I'm feeling its the only way to know whats happening and push progress along.

On a side issue, last years agm documents included a list of outstanding fees (and property numbers). This is missing this year, and although I will find out why later, I'm wondering is there any good legal reason or other not to identify properties (there isn't even an outstanding amount stated though!)

pinkypinky

I'm also an owner-director and we've just approved a budget for next year, which has not been made public yet at the AGM. We are making a small reduction across the board this year in recognition of the difficult times and we're giving a further reduction to anyone who can pay their whole management fee within the first 3 months of the year to encourage quick payment. We had no sinking fund due years of bad management up to 2 years and, though we have massively reduced outstanding management fees, we still have a large amount owed, some of which is being dealt with through court, so a large reduction isn't possible at this time.

eden_my_ass

pinkypinky wrote: »

I'm also an owner-director and we've just approved a budget for next year, which has not been made public yet at the AGM. We are making a small reduction across the board this year in recognition of the difficult times and we're giving a further reduction to anyone who can pay their whole management fee within the first 3 months of the year to encourage quick payment. We had no sinking fund due years of bad management up to 2 years and, though we have massively reduced outstanding management fees, we still have a large amount owed, some of which is being dealt with through court, so a large reduction isn't possible at this time.

So I take it your boards policy is not to invoice until the budget has been presented and debated at the agm? I wonder is the idea of invoicing first meant to dissuade people from bothering going to the agm (damage already done mentality of many would have them pay rather than discuss). Less hassle for the management agent and a shorter meeting Yes I think the worlds that cynical!

athtrasna

I think it's a matter of practicality. Our year end is end of March. Allowing for accounts to be audited, clarified, and signed off, the earliest possible AGM we could schedule would be September. So do we debate next year's budget in September (all quotes will be totally out of date come April) or this year's budget (for which fees have already been invoiced)?

We discuss the current year, but the directors must approve the budget before the MA issues invoices for fees. We won't agree an unfair budget or one with blatant overspending, errors etc

eden_my_ass

athtrasna wrote: »

I think it's a matter of practicality. Our year end is end of March. Allowing for accounts to be audited, clarified, and signed off, the earliest possible AGM we could schedule would be September. So do we debate next year's budget in September (all quotes will be totally out of date come April) or this year's budget (for which fees have already been invoiced)?

We discuss the current year, but the directors must approve the budget before the MA issues invoices for fees. We won't agree an unfair budget or one with blatant overspending, errors etc

Seems the issue so is owner-directors with perhaps too much money on their hands or too little willingness to push for cost efficiencies for the rest of us....looks like theres only one option so

pinkypinky

eden_my_ass wrote: »

So I take it your boards policy is not to invoice until the budget has been presented and debated at the agm? I wonder is the idea of invoicing first meant to dissuade people from bothering going to the agm (damage already done mentality of many would have them pay rather than discuss). Less hassle for the management agent and a shorter meeting Yes I think the worlds that cynical!

Well, as Athtrasna said, the board sets the budget and then we present it at the AGM. We do not require a quorum to approve the budget. Our management agents sits on the side at the AGM and we (directors) chair the meeting. We refer to the agent for back up details but are actively involved on a daily basis with the running of the block. We don't approve unfair or unrealistic budgets. We have our AGM in April and invoices will be sent out in May.

At the end of the day, if you're not happy: get involved. I did and I'm satisfied with how my development is being run now.

athtrasna

eden_my_ass wrote: »

Seems the issue so is owner-directors with perhaps too much money on their hands or too little willingness to push for cost efficiencies for the rest of us....looks like theres only one option so

I don't get what you're implying here? I and the other owner directors insist that the MA get at least three quotes for every aspect of the budget and we also undertake our own research to make sure we can save every cent possible while still maintaining the development.

Or are you referring to your own development? If so then you are correct, the best way to protect your investment in your property is to get involved yourself. I've been a director since the MC was handed over to the owners and we've reduced fees by about 33% in that time and increased services at least 200%.

eden_my_ass

athtrasna wrote: »

I don't get what you're implying here? I and the other owner directors insist that the MA get at least three quotes for every aspect of the budget and we also undertake our own research to make sure we can save every cent possible while still maintaining the development.

Or are you referring to your own development? If so then you are correct, the best way to protect your investment in your property is to get involved yourself. I've been a director since the MC was handed over to the owners and we've reduced fees by about 33% in that time and increased services at least 200%.

Bingo with the latter, I was referring to the incumbent directors who have been sitting for a couple of years at least but seem to have had no involvement. Had a heated exchange at the agm and although fees are not going to come down (this year) we've formed a committee of directors who will meet soon to start slashing some costs. We'll also be proposing an early agm to allow open discussion BEFORE invoicing in future. Its a fine line though between keeping the management agent on his toes (and he is good at what he does) and doing his job for him

markpb

From my own experience as a director in my estate:

eden_my_ass wrote: »

Landscaping, no change (would have assumed a more aggressive price this year)

Ours was reduced by combining it with other services from one company (a package of landscaping and refuse collection)

Cleaning, slight decrease (odd breakdown but seems to be a saving)

I wouldn't expect much change here. There's a JLC ruling which states that janitors are entitled to an average wage higher than the national average wage. It's illegal to pay them less so contract cleaning companies costs won't have reduced much. We ended up hiring our janitor (more or less) directly which was a lot cheaper.

Block Policy, slightly up (no claims last year I'm aware of, cost to rebuild should be down)

Almost everyone's insurance is going up this year because insurers are making less money from investments. Estates with a bad claims history in the last five years are suffering particularly badly. In my case, the premium didn't go up but the excesses more than trebled.

ESB, significantly up (note 'ESB', not 'Electrcity'...time to change I think)

We changed to Airtricity and then to Energia. Haven't seen the figures yet but there should be a decent savings. Apparently some estates can't move away from ESB because they offer the longest payment window which is good for companies with poor cash flow.

Like others have said, the best way to make sure it's well run is to join the board of directors and *sit* on the managing agent. The more pressure you put them under and the more work you do, the more you'll benefit. We found out after changing agents that the previous agent were paying huge money for unnecessary call-outs (€160/hr for sweeping leaves off an automated gate track for example) or paying more for call-outs than was actually necessary (2 hours for a 15 minute job).

It might also be worth looking at hiring a maintenance manager a few hours a week if your estate is big enough. Having someone on-site who can fix small things himself can make a big difference.

AARRRRGH

My brother was telling me that his committee asked their current agents to tender again this year, along with a few other agents.
The result was that the yearly management fee went down by a whopping 45%. Just shows you how much you get ripped off until you introduce some competition.

Their existing agent dropped it by 40% but were beaten by the new management agents who quoted 45% less than last years fees.

They are now going to do the same exercise each year.
Id advise everyone to get their committee to do this right away.