Caretaker Service Charges

nozipcode

Hi all,
Hope someone can help me out with this Q.
The apartment block in question has a part-time caretaker service (clean floors/spills when necessary, odd jobs etc). To faciliate this, the unit owners of the building pay rent on an apartment in the block for the caretaker to live in full-time. The unit being rented is owned by one of the building's developer. The other unit owners are effectively paying the mortgage on this apartment.
Can anyone tell me if this is legal? Or is does this go against this MUD act that came in some years ago? Is this scenario common?
Thanks in advance.

athtrasna

I'd be interested to find out if the caretaker is paying benefit in kind taxes on the apartment. Sounds dodgy to me

Arbiter of Good Taste

On what basis do you think it contravenes the MUD Act?

Also, what difference does it make whether or not the owner of the apartment has a mortgage or not? Would you feel happier if the apartment was debt free?

ted1

nozipcode wrote: »

Hi all,
Hope someone can help me out with this Q.
The apartment block in question has a part-time caretaker service (clean floors/spills when necessary, odd jobs etc). To faciliate this, the unit owners of the building pay rent on an apartment in the block for the caretaker to live in full-time. The unit being rented is owned by one of the building's developer. The other unit owners are effectively paying the mortgage on this apartment.
Can anyone tell me if this is legal? Or is does this go against this MUD act that came in some years ago? Is this scenario common?
Thanks in advance.

The developer more than likely doesn't have a mortgage.
The main question is, do you really need a care taker ? Is it cheaper to pay one upfront or by providing accimodation?

nozipcode

athtrasna wrote: »

I'd be interested to find out if the caretaker is paying benefit in kind taxes on the apartment. Sounds dodgy to me

I have no idea. What taxes should be due in this situation?



Arbiter of Good Taste - I believe I read that it goes against the MUD act for developers to charge members for rental for areas used to provide a service such as caretaking, store rooms etc. Anyone know if this is the case or not?

Ted1 - good point - there is unlkely to be a mortgage on this apartment. That's my main problem here really, is that an apartment is being rented out at large cost to the members for a caretaker that maybe does 2-3 hours a week, if even that.

When I questioned the value of the current scenario I was more or less shutdown without any discussion or reasonable explanation. And the caretaker in question is certainly not a good candidate for the job.

_Kaiser_

I'm confused here.. so the owner/developer of the building has an apartment that they let the part-time caretaker stay in to facilitate the performance of the job. This apartment is (probably) owned outright by the developer, so no mortgage to pay in any case.

If the caretaker isn't declaring it for BIK then as athtransa says above, that's an issue for the Revenue alright. If you and the other residents are paying management fees to support this and not getting value for it then you should raise it with the Management Company (and for what it's worth I'd agree that there doesn't seem to be much benefit to the situation alright), but it sounds like you've done that and were outvoted.
The real problem seems to be that you have an issue with this caretaker getting to live rent free while you pay your mortgage?

Victor

athtrasna wrote: »

I'd be interested to find out if the caretaker is paying benefit in kind taxes on the apartment. Sounds dodgy to me

I'm not sure if it's required. It may be that the caretaker is required to reside on the premises.

nozipcode wrote: »

I believe I read that it goes against the MUD act for developers to charge members for rental for areas used to provide a service such as caretaking, store rooms etc. Anyone know if this is the case or not?

Which section of the Act?

I think one has to look at the materiality of the matter, not just the structure.

nozipcode

_Kaiser_ wrote: »

I'm confused here.. so the owner/developer of the building has an apartment that they let the part-time caretaker stay in to facilitate the performance of the job. This apartment is (probably) owned outright by the developer, so no mortgage to pay in any case.

If the caretaker isn't declaring it for BIK then as athtransa says above, that's an issue for the Revenue alright. If you and the other residents are paying management fees to support this and not getting value for it then you should raise it with the Management Company (and for what it's worth I'd agree that there doesn't seem to be much benefit to the situation alright), but it sounds like you've done that and were outvoted.
The real problem seems to be that you have an issue with this caretaker getting to live rent free while you pay your mortgage?

I have ZERO problem with having an on-site caretaker and paying for it if there is value in the arrangement.

The main problem here is that the caretaker in question is not up to the job. We are not seeing value in the arrangement.

What part we're you confused on?

nozipcode

Victor wrote: »

I'm not sure if it's required. It may be that the caretaker is required to reside on the premises.

Which section of the Act?

I think one has to look at the materiality of the matter, not just the structure.

I don't know what section. That is why I came here, to see if anyone knew better than I do.

Arbiter of Good Taste

nozipcode wrote: »

I have ZERO problem with having an on-site caretaker and paying for it if there is value in the arrangement.

The main problem here is that the caretaker in question is not up to the job. We are not seeing value in the arrangement.

What part we're you confused on?

Well for one, there's a few of us confused as to why the developer's debt situation has any bearing on the situation

nozipcode

Arbiter of Good Taste wrote: »

Well for one, there's a few of us confused as to why the developer's debt situation has any bearing on the situation

I couldn't care less as to the developer's bank balance, I don't care if he's in debt of if the proceeds of the rent on his apartment go towards a lavish lifestyle. That's not my business or my concern. The problem is we are all paying for a service that is not being carried out. The caretaker is rarely even on site! I would much rather see this money being spent on a) a caretaker who WILL do the required work, or b) external contractors who will also do their job.

Unless you have something constructive to add to this thread, please don't bother.

Victor

nozipcode wrote: »

Unless you have something constructive to add to this thread, please don't bother.

It's not for you to decide who does or doesn't post on a thread. tone it down a bit.

Moderator

nozipcode

If my previous post's suggest that I am more a busy-body who cares more about other's wealth and good luck rather than for the value I get out of my hard earned cash then I apologise, but this is not the case.

My issue here is that the current arrangement SEEMS to be put in place to benefit a small number of people, and it's the unit owners/paying members that are losing out. It just seems fishy to me, so I asked the question.

CIARAN_BOYLE

well the unit owners are members of the management company. Raise it at the next meeting of the management company and have a vote.

Nothing illegal, no problem with the caretaker getting use of an apartment. If there is no value in it you can just vote as members for the arrangement to end.