management company

jimjim23

Hey guys,

Just a quick one. I live in an apartment and the management fees are over 2000 euros. It has a lift and they are based in Howth and I just wondered if I am getting robbed. I have no idea how much they should be and dont know who to ask. I have had major grief with these guys and was in the middle of clearing this years amount when the chairman/secretary guy piped up that there was an additional 100 euro sinking fund aswell. Seems pretty insane to me.

Any advice would be really appreciated

james

Procrastastudy

jimjim23 wrote: »

Hey guys,

Just a quick one. I live in an apartment and the management fees are over 2000 euros. It has a lift and they are based in Howth and I just wondered if I am getting robbed. I have no idea how much they should be and dont know who to ask. I have had major grief with these guys and was in the middle of clearing this years amount when the chairman/secretary guy piped up that there was an additional 100 euro sinking fund aswell. Seems pretty insane to me.

Any advice would be really appreciated

james

You are the management company. What you should have is a board of directors and a managing agent. €2000 is outrageous imho. I'm paying around €1100 for a one bed with lift in the centre of Dublin. We've a semi-full time care taker, night security and an excellent management agent, and equally as excellent board of directors.

Go through the annual reports line by line and question everything at the AGM.

Paulw

jimjim23 wrote: »

I have no idea how much they should be and dont know who to ask.

Do you not get a full copy of the accounts each year? Do you not attend your management company AGM each year? Do you not get a full breakdown on the planned budget for the coming year?

Your management agent should be able to provide you with the documents, since you (as an owner) are a member of the management company.

jimjim23

Ok, a quick explanation. I lived in England the last 10 years and I came back to find my mother was struggling not only with payments but with their treatment of her. She was being bullied and threatened so I decided to make payments and deal with them on her behalf. The guy I met was doing it for free and seemed a bit scatty, I haven't seen a proper breakdown of everything yet and have been arguing with amounts being bounced around.I got involved halfway through the year I'm still not sure how they work out these figures. So I intend on going to my first AGM and seeing what the story is and also talking to a couple of neighbours. I mean, to add an additional 100 euro for sinking fund is a bit mental. Anyone in their right mind would have thought that would be included in the initial statement?

Paulw

There should be plenty of documentation for accounts, budget, invoices, etc.

Make sure that your mother signs a proxy form, allowing you to attend the AGM on her behalf. Otherwise, you have no say and no vote.

Everything should be covered under the Companies Act 1963, plus the Multi-Units Development Act 2011. Plenty of reading for you, never mind your mother's Lease Contract and also the management company articles of association.

Tom Young

Management Company fees are contained in the lease, under which your property is let to you. Pay the fees.

jimjim23

I never said I wasn't going to pay the fees Tom Young... I want to know where I stood and wanted more information. In fact, the majority of this years service is paid.

cheers

listermint

Tom Young wrote: »

Management Company fees are contained in the lease, under which your property is let to you. Pay the fees.

Pretty off the wall comment tbh Tom.

Tom Young

listermint wrote: »

Pretty off the wall comment tbh Tom.

Let me tell you that as a matter of fact, apartment complex management law fee suits are the most common debt recovery cases in the national District Courts.

Invariably the lease holders lose.

It's not an off the wall comment at all, by any stretch of any anyone's imagination.

listermint

Tom Young wrote: »

Let me tell you that as a matter of fact, apartment complex management law fee suits are the most common debt recovery cases in the national District Courts.

Invariably the lease holders lose.

It's not an off the wall comment at all, by any stretch of any anyone's imagination.

I am sure you aware that also contained within the lease is a set agreement as to what services and records are required to operate a management company.

As the OP hasnt determined yet the facts of the situation nor that the MC is operating within the law or retaining relevant records or documentation, praytell Tom why you would have them pay the fees blindly without any facts?

I would prefer to advise the OP to inform themselves and discuss the topic with the other stake holders (neighbours) and attend the AGM.

juan.kerr

Tom Young wrote: »

Let me tell you that as a matter of fact, apartment complex management law fee suits are the most common debt recovery cases in the national District Courts.

Invariably the lease holders lose.

It's not an off the wall comment at all, by any stretch of any anyone's imagination.

Tom, what is the typical amount outstanding in cases like this?

Tom Young

Anything north of €1000.00, would be normal for tenants to simply ignore AGM / MC resolutions, etc.

jimjim23

thanks listermint, that's basically what I was going to do, speak to neighbours and attend the next AGM. I've collected as much documentation as my mother had and I have been going through it. There's nothing detailed as such, but I'll be demanding that kind of stuff when I get a chance.

thanks for your time

Procrastastudy

AFAIK you're not tied to the managing agent. If they are a bunch of incompetent morons, as many are, resolve to get rid of them and hire a new one.

joeguevara

Just a qick question regarding Management companies. If there is no clause in the Memorandum and Articles of Association that allows directors of the company to charge punitive interest for non-payment of fees, would it be ultra vires to include a clause to this effect in the lease? Surely if they don't have the power to do so, it is illegal if they do?

Paulw

Most Lease Contracts have a clause about penalties and interest for unpaid fees.

Check that contract too.

joeguevara

Paulw wrote: »

Most Lease Contracts have a clause about penalties and interest for unpaid fees.

Check that contract too.

But if they don't have explicit power to do so in their Memorandum and Articles of Association, would this clause be ultra vires? I was under the impression, that you can't do something unless you have the power to do so.

joeguevara

Bump

cred

Hi James,
Seems a lot of money is going out and not too much value coming back. Your fees certainly are one of highest I've come across. You should expect full transparency on accounts, excellent service and replies on all inquiries. My business partner and myself both live in apartments and just under two years ago established a new managing agent company based on our experiences of having to 'put up' with poor value and service. We now manage four complexes and all our business came about through referral. We'd be happy to answer queries or help with some guidance. Take a look at our website and even from there you'll be able to garner some valuable info on how a multi-unit development should be managed. All the best. Conn. [REDACTED by ADMIN]

anncoates

2k is a lot.

My guess is that they may have cash issues due to defaulting resudents and they're trying to claw back money for services.

We had a huge problem with non payers and the management company kept lumping on extra stuff like sinking fund increases to cover shortfall.

Whatever the case is you should really keep more up to date with goings on in a company that you are a member of.

SimonPRepublic

Tom you are assuming she's renting and the landlord has outlined she pays. She is an owner and the management charges change each year based the costs of the management.

Procrastastudy

SimonPRepublic wrote: »

Tom you are assuming she's renting and the landlord has outlined she pays. She is an owner and the management charges change each year based the costs of the management.

Apartment owners are tenants in Ireland. I've never heard of an apartment owned in Fee Simple.

SimonPRepublic

He's talking as if she is renting, which is she isn't as she's an owner and, therefore, a director of the management company. Under the provisions of the MUD Act she has every right to question the amounts she is being charged.

Paulw

SimonPRepublic wrote: »

He's talking as if she is renting, which is she isn't as she's an owner and, therefore, a director of the management company. Under the provisions of the MUD Act she has every right to question the amounts she is being charged.

The OP hasn't said that they are a director of the management company, but if they own a unit then they are, at least, a member of the management company. Any member has the right to query the budget at an AGM.

Procrastastudy

SimonPRepublic wrote: »

He's talking as if she is renting, which is she isn't as she's an owner and, therefore, a director of the management company. Under the provisions of the MUD Act she has every right to question the amounts she is being charged.

Well fair enough it's not for me to try and talk for Tom tbh my interpretation is very possibly faulty.

SimonPRepublic

All management companies are limited companies, therefore, the property owners are directors/shareholders of their developments company. I think possibly thought I was assuming she was on the board of the management company that runs the development, which I wasn't.

Before the next AGM she should get as many of the owners as possible to attend the AGM and query the budget. If they're not happy with the budget for the next year then they should not approve it until everything has been clarified and they're sure that they're getting the best value for all the services, which should be provided by independent companies and most importantly should not be sub-companies of the managing agents (a lot of them feather their own nests by providing services in-house and charging whatever fees they want). All services, including insurance, should be put out to tender. As rebuild costs have fallen dramatically they should also ensure that the insurance is based on an up to date valuation of the building and rebuild costs. Charlie Weston wrote about the need for owners to attend the AGMs and query the budget of management companies in December in The Irish Independent.

Lantus

Jimjim,

Since the MUD act which came into force april 2011 management companys (OMC) MUST follow the following procedure: -

Once a year they must hold an AGM. AT least 21 days prior to the AGM they must provide to each member a copy of the last accounts submitted (an annual report) a proxy form for voting and critically importantly the budget for the year ahead. This must be detailed as per the requirements of the MUD act for various costs like insurance, lifts, landscaping etc. and outline the sinking fund seperate to this (typically it is all part and parcel of the service fee cost.) There is a range of info required and its all laid out in the act. It not optional, OMCs MUST comply.

At this AGM members eligible to vote (typically those who have paid) will vote to approve this budget and it must be approved by 60% of the members present and eligible.

Only then can service fee bills be issued. If the budget fails then the directors need to hold another AGM (which costs money so theres no incentive to screw this up.)

2k would be at the upper end of the scale for apartment buildings. It is not possible to say why this is as costs are specific to each development.

If there has been no vote taken then the budget is not legal under the provisions of the mUD act.

The application of interest is contained in the lease docs. it can vary.

The amount you pay is never in the lease docs as it can and often will vary year on year. The manner of how it is apportioned between units will be though. i.e 2 beds pay x amount, 3 beds pay x amount or however it is done.

You can get your articles of association on line at CRO. Also refer to the ODCE handbook for specific answers. The MUD act completes the set of info you will need.

Request minutes from the last meeting which you are legall entitled to and see how business was conducted.

A lot of OMCs are still operating far short of the requirements of the MUD act and company law because not enough people make enough noise about it and hold them to account.

If the OMC has failed to provide a breakdown of the costs for each area then they are in breach of the MUD act. Its also pretty shoddy and a posible indication of less than honest accounting. If you dont have a copy of the most recent accounts then you can also get a copy off the CRO. This 'may' indicate where money is being spent if they provide additional info.


Let us know how it goes.