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Management fee (only few apartments sold)

  • 26-09-2011 11:49pm
    #1
    benki11
    Registered Users, Registered Users 2 Posts: 93 ✭✭


    Hi
    Sorry if already asked but would like to know ...
    Thinking of buying apartment in small town of Claremorris west of Ire..
    The building has over 60 apartments town houses,and i was told that will be paying management fee of 1000€ for first 3 years!!
    Thing is that only 4 of those 've been sold and if others are not sold who will pay fees for rest of the apartments !! Us 4-5 owners or Company??
    I am first time buyer and afraid if others apartments are not sold in few years can my fees rise madly to 2,3,4 or 5000 € after first 3 years!
    Those apartments are there for 4 years now and only 4 been sold??
    Please could anyone explain or share your opinion with me??
    Thanks


Comments

  • #2
    Paulw
    Registered Users, Registered Users 2 Posts: 13,381 ✭✭✭✭Paulw


    Check your Lease Contract. It will detail what you pay.

    Normally you pay a percentage of the total management company running cost, based on the sq ft space of your unit, compared to the total space of the development.

    By law, the developer must pay the management fees of any unsold units.

    Items you should read - your Lease Contract, the articles of association for the management company (available through the CRO for a small fee), and the Multi-Units Development Act (download through govt website). These will give you information on how things are run.


  • #3
    Lantus
    Registered Users, Registered Users 2 Posts: 3,027 ✭✭✭Lantus


    The developer should pay the service fee for any unsold units that he owns. If there is a management company then you really need to get involved if you can. Developers use the first years to enjoy rich easy pickings from buyers before they start to question where the money is going. (By that time the paperwork has been shredded.)

    I would request a detailed breakdown of the fee and what it covers.
    Landscsaping, lifts, insurance, sinkingfund etc. For large elements (in our case it was the landscaping.) make sure you see the official quotations and not just take the word of the developer that it will be 20k a year when in fact they are only paying 5k a year to a friend (where do you suppose the other 15k goes.....)

    Also, developers hate to pay service fees on empty propertys (especially empty commercial units.) and will try to get out of it in any way they can.

    Personally I would question the logic of buying an apartment in a country awash with cheap houses. Your just asking for trouble and a development that has only sold 4 units sounds like an unsafe and unwelcome place to buy into. The annual fees are a lot. Most apartment owners are kicking themselves..

    Service fee's cannot just be raised though at the drop of a hat. They need to be voted in at AGM's which the management company must hold once a year by law. You can all (4 of you) vote against it if you want. Get appointed as directors and run it yourselves. Note that this will be very hard if the developer still owns 90% of the development.


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