Management companies in private estates

Bid08

hi All,

just wondering if someone can help me with this?

I live in a small development of 5 houses (no more to be built) and we are to take over the management company the developer set up. Now paying the fees is not a concern of mine, we have all agreed to pay a certain amount ever year and no one has any issues

my issue with the formal management company is that as its a 'mgt company' accounts have to be audited annually, which accountants have said takes up alot of time and paperwork (i have contacted about 5) and all charge between 1200 and 1500 a year with so high, there wouldnt even be that money going into the account a year

so im just wondering if anyone else has been in this situation and residents decided not to take over the mgt company? is there anything I can do as I really dont have the additional money to pay for something so stupid really?

Zombienosh

blast it with love

Death and Taxes

Bid08 wrote: »

hi All,

just wondering if someone can help me with this?

I live in a small development of 5 houses (no more to be built) and we are to take over the management company the developer set up. Now paying the fees is not a concern of mine, we have all agreed to pay a certain amount ever year and no one has any issues

my issue with the formal management company is that as its a 'mgt company' accounts have to be audited annually, which accountants have said takes up alot of time and paperwork (i have contacted about 5) and all charge between 1200 and 1500 a year with so high, there wouldnt even be that money going into the account a year

so im just wondering if anyone else has been in this situation and residents decided not to take over the mgt company? is there anything I can do as I really dont have the additional money to pay for something so stupid really?

If the company has a small turnover (less than €100,000 I think), you dont need audited accounts. Check with the CRO.

frankosw

The Developer set up a management company?


I'd be checking for Pyrites in your foundations and fire-safety compliance before paying them a penny.

Ghandee

These companies will all start to become defunct now, what with the property tax and all 'paying for amenities and services'

Couldn't have the people paying twice for something, could we?

Bid08

I told one or two of them the max amount of money going into the account a year will be 1000

Chips Lovell

Should be entitled to an audit exemption.

Death and Taxes

Bid08 wrote: »

I told one or two of them the max amount of money going into the account a year will be 1000

Will that cover everything? I would have thought the insurances would have cost more than that.

Bid08

hopefully should be okay I havent looked into the prices myself one of the other house holds have but may have a look myself, if not then so be it, I dont mind having to pay the money for them sort of things

thanks for the link to the audit exemption link

labradoodlelady

Company is most likely to be limited by guarantee and you won't get audit exemption.

Talk to the company's solicitor. If the company already owns the common areas, or is party to the deeds of transfer on the houses, then you are going to have to keep it going.

keano_afc

WileyCoyote (Accelleratii Incredibus!) wrote: »

If the company has a small turnover (less than €100,000 I think), you dont need audited accounts. Check with the CRO.

Thats true, but I think you have to have a set of accounts available in case they ask you.

Bid08

a property management company id generally set up as a guarentee company and is not exempt from auth review, only a private limited company is so I was told by CRO

blackwhite

WileyCoyote (Accelleratii Incredibus!) wrote: »

If the company has a small turnover (less than €100,000 I think), you dont need audited accounts. Check with the CRO.

Turnover limit is €8.8million .

The issue is possibly arising because a company must be structured as a Private Limited Company to be able to avail of the audit exemption

blacklilly

Op I presume you are talking about the common areas being conveyed from the developer to the members of the management company.
Unfortunately the vast majority of management companies are limited by guarantee and therefore have to have their accounts audited, although the costs seem exceptionally high for a development of 5 units and you should be able to source alternative auditors who will do it for less. You will also need to establish a board of directors for the management company, up until now it is probably the developer that has been acting as the director.
By the sounds of things becoming a director does not sound too time consuming as it is a small development and it may even be possible that all owners there become directors

Bid08

yes the accounts all said the same thing, its the time and paper work involved in completing an audit which causes the costs to be so high and nothin to do the the amount of money which will be passing through the accounts

blacklilly

Bid08 wrote: »

yes the accounts all said the same thing, its the time and paper work involved in completing an audit which causes the costs to be so high and nothin to do the the amount of money which will be passing through the accounts

From my own experience it is also the size of the development which is considered when auditors quote

labradoodlelady

Both will affect the quote. A bigger development will mean more transactions and therefore more audit work. Nonetheless, as it's a full audit, there is a mountain of paperwork to be compiled regardless of the size of the estate. With the Multi Unit Development Act, and auditing standards there is a huge volume of work for what seems like a tiny no of transactions.

You need to ring more businesses for quotes. E1,000 incl VAT is more in line with size of company.

blackwhite

Bid08 wrote: »

yes the accounts all said the same thing, its the time and paper work involved in completing an audit which causes the costs to be so high and nothin to do the the amount of money which will be passing through the accounts

The amount of work in the audit is related to the volume of transactions that the company makes in the year.
On top of that, these are certain minimum standards that auditors will have to adhere to.
These all mean that there will always be a minimum cost - at best €750-1000 plus VAT.

You should possibly look at having the company structure change to a Private Limited Company. You would still need an audit for every year up until (and including) the year you change, but once it was done it'd eliminate the need for an audit.
Find an accountant you feel you can put some faith in. Engage them to do the audit this year, and get them to advise on converting the company structure.

Domo40plus

Just get the estate taken over by local council and that is all you have to do. Friend did the same thing Louth. Simple

ben.schlomo

Domo40plus wrote: »

Just get the estate taken over by local council and that is all you have to do. Friend did the same thing Louth. Simple

Id say that helped the OP......................16 MONTHS AGO!!! :rolleyes: