Management fees

SarahMollie

Hi everyone,

I saw this in a previous thread which got out of hand and was subsequently closed by the Mods as ppl were getting a bit smart with each other, but I was wondering what people are paying for management fees, what they include and if people feel like they get any value from them. The thread was fundamentally about something else but people seemed to be paying anything from €600 -€3000, and there didnt seem to be much logic behind it in some cases!

Personally, I pay €1010 annually for a 3 bed duplex in SCD. Includes block insurance, up keep of the communal grounds, bins etc. Every unit in the development has their own front door so there are no communal indoor spaces.

I think its reasonable personally and but that if it was significantly higher, it would have put me off buying into the development.

I'd be interested in hearing others view on this, would it put you off a property does it bother you in the slightest?

athtrasna

All fees are relative and depend on so many factors that you're talking about comparing chalk and cheese.

Things like :
Number of units
Mix of units
Shared entrance units
Lifts
Fountains (Celtic tiger leftovers)
Underground car park
Entrance gates
Location of development
Status of management company
Management fee compliance
Sinking fund status
Cctv
Management agent
External finish (red brick doesn't need to be repainted)
Car park surface
Bins
Insurance
Landscaping

And that's just for starters. There's little benefit to be gained from comparing fees imo. It's up to individual owners to attend their Agm, to find out how the fees are being spent and to seek value. The best way to do this is to get involved.

Michael D Not Higgins

athtrasna wrote: »

There's little benefit to be gained from comparing fees imo.

I think sinking funds can have a big effect, an inadequate sinking fund could be caused by low fees which then cause a spike after the management company need to pay for something.

Before, you'd say it's cheap, after, you'd say it's expensive. On the average, it might work out alright.

SarahMollie

athtrasna wrote: »

All fees are relative and depend on so many factors that you're talking about comparing chalk and cheese.

Things like :
Number of units
Mix of units
Shared entrance units
Lifts
Fountains (Celtic tiger leftovers)
Underground car park
Entrance gates
Location of development
Status of management company
Management fee compliance
Sinking fund status
Cctv
Management agent
External finish (red brick doesn't need to be repainted)
Car park surface
Bins
Insurance
Landscaping

And that's just for starters. There's little benefit to be gained from comparing fees imo. It's up to individual owners to attend their Agm, to find out how the fees are being spent and to seek value. The best way to do this is to get involved.

TBF, I know there are variables, my point was that the overall cost impacts my opinion of a place when looking online/viewing a property. Certain things you've listed above are pretty much always going to be included, ie Bins, Insurance, landscaping if the properties are built in such a way as to be inter dependent.

Where i live, parking is surface level, there are no electronic gates or lifts, so I know these are the main factors keeping it reasonable. i haven't been an owner for long enough to attend an AGM yet, but will definitely be attending when it next rolls around.

I once viewed an apartment (fees €2k plus) where the parking structure was such that if your space wasn't on the ground floor, you had to drive into a car lift to access the correct floor. This immediately put me off as I could see that causing problems and being expensive to fix.

I also viewed a townhouse where the fees were typically €2k, but would be temporarily upped to €3.5k for 2 years as the paving needed to be replaced. Again this put me off as it was obvious they didnt have much of a sinking fund, and it would stick in my throat to pay as a new owner for things that weren't done properly in the past.

athtrasna

SarahMollie wrote: »

TBF, I know there are variables, my point was that the overall cost impacts my opinion of a place when looking online/viewing a property. Certain things you've listed above are pretty much always going to be included, ie Bins, Insurance, landscaping if the properties are built in such a way as to be inter dependent.

Where i live, parking is surface level, there are no electronic gates or lifts, so I know these are the main factors keeping it reasonable. i haven't been an owner for long enough to attend an AGM yet, but will definitely be attending when it next rolls around.

I once viewed an apartment (fees €2k plus) where the parking structure was such that if your space wasn't on the ground floor, you had to drive into a car lift to access the correct floor. This immediately put me off as I could see that causing problems and being expensive to fix.

I also viewed a townhouse where the fees were typically €2k, but would be temporarily upped to €3.5k for 2 years as the paving needed to be replaced. Again this put me off as it was obvious they didnt have much of a sinking fund, and it would stick in my throat to pay as a new owner for things that weren't done properly in the past.

For a start management fees aren't fixed. They are a percentage of the annual budget so can change dramatically year on year. As a previous poster stated, low fees can be increased a lot when there's a big expense that has to be covered.

Bins are not routinely included either, I have relatives in Dublin and Cork, both all apartment developments, whose bins are not included. Also most all house estates built in the past 15 years have management fees and they almost never include bins.

P. Breathnach

SarahMollie wrote: »

TBF, I know there are variables, my point was that the overall cost impacts my opinion of a place when looking online/viewing a property....

And rightly so. But it's only one ingredient in a complex mix.

Low management fees might be associated with a low annual budget - grounds not particularly well looked after, communal areas not cleaned as well or as often as you might wish, routine maintenance minimal (e.g. re-painting done less often than you might consider good).

Lifts and security gates might be a boon, but they add to the OMC's budget. An older building might need provision for major refurbishment such as renewing a flat roof.

The overall financial health of the OMC is probably a more important consideration than the level of management charges. In some developments, the non-payment of fees is a significant problem.

SarahMollie

P. Breathnach wrote: »

And rightly so. But it's only one ingredient in a complex mix.

Low management fees might be associated with a low annual budget - grounds not particularly well looked after, communal areas not cleaned as well or as often as you might wish, routine maintenance minimal (e.g. re-painting done less often than you might consider good).

Lifts and security gates might be a boon, but they add to the OMC's budget. An older building might need provision for major refurbishment such as renewing a flat roof.

The overall financial health of the OMC is probably a more important consideration than the level of management charges. In some developments, the non-payment of fees is a significant problem.

True, I suppose what I was saying was that management fees (plus the factors that drive them) influenced me when househunting. I thought it a bonus to find a place wiht no electric gates, internal common areas, lifts etc. Therefore I think my fees are low but not unreasonably so. My solicitor said sinking fund was solid and annual income solid. It wasnt a boom time development so I dont think non payment is a major issue, as places sold circa 2007

jayjay2010

My management fees €1,950 for a 2 bed apartment in Tallaght. Only communal areas are 2 small gardens and a gated carpark. I personally don't understand why the fees are so high but I imagine that a percentage of people are not paying their fees, possibly resulting in higher fees for the people who do pay. I don't use the elevators. The fees include the bins though which is really handy -I think of it as unlimited bins!

I would love a much smaller management fee but the average around here is 1.5-2.3k per annum

athtrasna

jayjay2010 wrote: »

My management fees €1,950 for a 2 bed apartment in Tallaght. Only communal areas are 2 small gardens and a gated carpark. I personally don't understand why the fees are so high but I imagine that a percentage of people are not paying their fees, possibly resulting in higher fees for the people who do pay. I don't use the elevators. The fees include the bins though which is really handy -I think of it as unlimited bins!

I would love a much smaller management fee but the average around here is 1.5-2.3k per annum

Have you been to an AGM? Considered becoming a director? This is how you find out what makes the fees as high as they are, and it's how you try to work to change them.

caviardreams

I pay about €1550 for a 2 bed (lifts, electric gates) and actually think a lot of the expenditure based on the accounts represents good value. Some people want much lower fees but then would probably complain if bins weren't emptied as regularly, if the place was only cleaned once a month instead of every week, if light bulbs were not replaced promptly etc.

The only items I am less pleased about having to pay are the (very small) admin and (less small) auditors fees, and the managing agent fee, but unfortunately these are absolutely necessary and you can't do much about them. Also, taking a holistic view, the managing agent gets three quotes for every service/contract so they are probably saving us some of their fees by getting cheaper contracts.

I think if a block is very well maintained, with healthy accounts, I would not mind paying a bit more. Services cost money unfortunately. That said, paying €3k or more a year (no matter how good the service) would put me off a little bit, as having to factor in a recurring cost like that every year as a running expense would be challenging. Also I would be concerned it might put some potential buyers off if I were to sell down the line.

Michael D Not Higgins

jayjay2010 wrote: »

My management fees €1,950 for a 2 bed apartment in Tallaght. Only communal areas are 2 small gardens and a gated carpark. I personally don't understand why the fees are so high but I imagine that a percentage of people are not paying their fees, possibly resulting in higher fees for the people who do pay. I don't use the elevators. The fees include the bins though which is really handy -I think of it as unlimited bins!

I would love a much smaller management fee but the average around here is 1.5-2.3k per annum

And corridors, doors, lifts, roof, exterior walls, stairwells, etc. Just because you don't use the lifts doesn't mean that you shouldn't have to pay for them.

SarahMollie

Michael D Not Higgins wrote: »

And corridors, doors, lifts, roof, exterior walls, stairwells, etc. Just because you don't use the lifts doesn't mean that you shouldn't have to pay for them.

Yes, this is true, once you buy into a development youre buying into collective responsibility for the good of all the residents. I've no real issue with this, none at all actually, as not having the maintenance that comes with a house suits me and my lifestyle presently.

My real interest here is that I was house hunting for almost 4 years (3x sale agreeds fell through for a variety of reasons... some of which didnt happen until I was already a 4-6 months invested in the process) so in my time I've viewed a lot of properties, way more than anyone would ever want! I've definitely seen that some developments represent better value for money than others, some by design (lifts, gates, etc) but some are very hard to understand where the money is going.

I've no major concerns regarding where I bought, but I think I will look to get involved in the board of management when the opportunity arises.

caviardreams

SarahMollie wrote: »

Yes, this is true, once you buy into a development youre buying into collective responsibility for the good of all the residents. I've no real issue with this, none at all actually, as not having the maintenance that comes with a house suits me and my lifestyle presently.

My real interest here is that I was house hunting for almost 4 years (3x sale agreeds fell through for a variety of reasons... some of which didnt happen until I was already a 4-6 months invested in the process) so in my time I've viewed a lot of properties, way more than anyone would ever want! I've definitely seen that some developments represent better value for money than others, some by design (lifts, gates, etc) but some are very hard to understand where the money is going.

I've no major concerns regarding where I bought, but I think I will look to get involved in the board of management when the opportunity arises.

I agree with this. I remember viewing a 2 bed with 3k per year fees and thought they were high because it was a reasonably sized block (approx 45-50 apartments) and there was no lift, no gates, surface parking and no green areas. If some of those services had been attached to the property it would have seemed far more reasonable. Also, it wasn't a once-off levy type fee which I could have understood (e.g. an extra 1k for 2-3 years to pay for major work) as I queried it.

SarahMollie

caviardreams wrote: »

I agree with this. I remember viewing a 2 bed with 3k per year fees and thought they were high because it was a reasonably sized block (approx 45-50 apartments) and there was no lift, no gates, surface parking and no green areas. If some of those services had been attached to the property it would have seemed far more reasonable. Also, it wasn't a once-off levy type fee which I could have understood (e.g. an extra 1k for 2-3 years to pay for major work) as I queried it.

Do you mind me asking where this place was? Im assuming SCD or similar, as otherwise that would surely just be disproportionate to the value of the property.

Places with gates never really held much interest for me. I have a friend who lives in a gated development, her buzzer in intermittent and she lived right down the back. Most times I tend to just hang around for a minute of two, and because of the size of the development (140 approx 2-3 bed units) the comings and goings mean that the gates are being opened all the time anyway and its easy to just slip in behind someone. Not much of a security deterrent.

Can BTL landlords write off the entire management fees against tax?

L1011

athtrasna wrote: »

Also most all house estates built in the past 15 years have management fees and they almost never include bins.

Only in certain council areas, and even then some of those councils are willing to assist owners in winding up management companies, having owners move to freehold and take the estate in charge like normal.

It was a brief fixation with trying to reduce council costs by not having to take estates in charge that lead to there being quite a few managed house-only estates built (that weren't of the cost grade to be gated developments, these will always exist). Managed estates don't cost the council to maintain the roads, the mains water/sewerage and possibly even the lighting; or to make their paltry contribution to grass cutting and landscaping.

caviardreams

SarahMollie wrote: »

Do you mind me asking where this place was? Im assuming SCD or similar, as otherwise that would surely just be disproportionate to the value of the property.

Places with gates never really held much interest for me. I have a friend who lives in a gated development, her buzzer in intermittent and she lived right down the back. Most times I tend to just hang around for a minute of two, and because of the size of the development (140 approx 2-3 bed units) the comings and goings mean that the gates are being opened all the time anyway and its easy to just slip in behind someone. Not much of a security deterrent.

Can BTL landlords write off the entire management fees against tax?

It was in Ballsbridge, priced around 350k.

intheclouds

Personally wouldnt touch a property with management fees again.

I currently pay about 1k, bins are included (never heard of anywhere where they arent actually), buildings insurance, grounds and communal area maintenance, window cleaning etc...

But while I feel the fees themselves represent value for money, the "collective" responsibility is not equally shared and there are constant problems with non payers resulting in higher fees for all.

There are also a lot of minor niggling problems that dont exist in non managed estates - people messing up the bin sheds, people dumping rubbish outside the bin sheds, parking messing, cars being abandoned in car parking spaces (if it was a public road you could get it removed) etc...

Dumb things like people being threatened by solicitor letter for painting their front door a different shade while they have no teeth to go after people who are causing real problems like noise disturbance.

Overall, democratic living is not for me, Id prefer a dictatorship.

SarahMollie

intheclouds wrote: »

Personally wouldnt touch a property with management fees again.

I currently pay about 1k, bins are included (never heard of anywhere where they arent actually), buildings insurance, grounds and communal area maintenance, window cleaning etc...

But while I feel the fees themselves represent value for money, the "collective" responsibility is not equally shared and there are constant problems with non payers resulting in higher fees for all.

There are also a lot of minor niggling problems that dont exist in non managed estates - people messing up the bin sheds, people dumping rubbish outside the bin sheds, parking messing, cars being abandoned in car parking spaces (if it was a public road you could get it removed) etc...

Dumb things like people being threatened by solicitor letter for painting their front door a different shade while they have no teeth to go after people who are causing real problems like noise disturbance.

Overall, democratic living is not for me, Id prefer a dictatorship.

Yeah there can be problems alright. So far so decent for me, but I've witnessed some of the things you've described. Some people just wont take care of communal areas like bins. If they were individually assigned to each unit, I'm sure they wouldnt want a mess outside their own door and would take more care.

I'm only planning on staying where I am for the next 5ish years (10 max) and then hopefully to be able to buy a proper house without being tied to other people!

ckblackrock

intheclouds wrote: »

Personally wouldnt touch a property with management fees again.

I currently pay about 1k, bins are included (never heard of anywhere where they arent actually), buildings insurance, grounds and communal area maintenance, window cleaning etc...

But while I feel the fees themselves represent value for money, the "collective" responsibility is not equally shared and there are constant problems with non payers resulting in higher fees for all.

I live in a block where there is 100% fees compliance, and have an interest in another apartment also now with 100% compliance after a lot of hassle - because the agents actively pursued non-payers and refuse to deal with sale of properties until late fees are dealt with. Also, we have a system whereby you get a discount for paying on time or for setting up a monthly direct debit to pay in instalments - as a lot of people always intend to pay, but without the incentive, just put it on the long finger and then the year goes by and they owe twice as much. For those who won't pay, we go legal and all of the costs are added to the fees and finally if necessary a judgement entered against the property (never had to go this far). Where the bank takes possession, again, sale of property is blocked unless the bank guarantees all of the back fees due (obviously, 2007 to 2014 there were a number of properties that fell into that category). The agent of one block actually attended an Alsops auction and stood up to warn bidders that bank had not paid fees and so he would not be assisting in the process to transfer title, and the property was withdrawn and the bank decided to sit up and pay attention! it is up to the decent folk to pay up to keep up the property, ensure you get actively involved in at least attending the AGM and pressuring the agent to do his job, and eventually you will get full compliance for all units.

intheclouds

ckblackrock wrote: »

....ensure you get actively involved in at least attending the AGM and pressuring the agent to do his job, and eventually you will get full compliance for all units.

I do.

ckblackrock wrote: »

For those who won't pay, we go legal and all of the costs are added to the fees and finally if necessary a judgement entered against the property (never had to go this far). Where the bank takes possession, again, sale of property is blocked unless the bank guarantees all of the back fees due

We do all of this and we still have a small number of persistant non payers who now have judgements on their property. That still doesnt pay the management fees!

ckblackrock

intheclouds wrote: »

I do.



We do all of this and we still have a small number of persistant non payers who now have judgements on their property. That still doesnt pay the management fees!

As long as it is only a small number of non-payers, afraid the rest of you will have to make up the difference in the medium term. In the long term, you will get your money back, when people move (which owner-occupiers will most likely do eventually). Make sure that the maximum interest and all admin charges are added to the debt. Also, if you don't already do so, set the management fees at 10% or 15% above what you need to run the development, and introduce 10% or 15% discounts for prompt payment - at least this way you will eventually receive "interest" on the "loan" which the rest of you are making to the non-payers. If the non-payers are landlords, it may be possible to take a lien on the rent, or to seek an order for bankruptcy (you can do this even with a small debt). If you feel the defaulter is really dicking you around and you have the energy for it: If the apt is mortgaged or was used as security for a loan, advise the bank that the fees are not being paid and that therefore the owner is not paying their insurance premium on the property. Also, make sure the bank knows if an apartment is let and what the market rent is (some landlords in hock to the banks collect rent in cash and pocket it rather than paying off the bank). There are probably other pressures you can apply, such as applying high charges for re-issue of keys and fob cards to occupants of non-paying units, etc and making sure tenants know that their landlord is not paying the charges and that their services will be affected as a result, etc. (just make sure it is all legal and set out in the rules for everyone). As far as I know, the management charges debt stays with the property (would have to re-read the relevant legislation on MUD) so even if the apartment is sold privately, the debt would transfer to the new owner, and if it is sold on the open market, the purchaser's solicitor will insist that the debt is paid from the sale proceeds before completion. It is a major hassle, but the managing agents in the south get paid a fortune so they should be doing all this work (fees on a small apt block in Northern Ireland are £1,100 p.a. which includes insuring and maintaining 2 lifts (a major cost) and sinking fund contribution, and the agent fees are only £3,000 p.a. to manage the development - dont know how he does it, as he has put in huge work to get the place sorted, including chasing a bankrupt builder who failed to complete the common areas, chasing Homebond for liability for some structural issues, and chasing bankrupt owners and banks who weren't paying fees. All sorted now, though, and fair play to him, and all for a fee of £3,000 a year including VAT, as opposed to a fee of €19,000 + vat we are being charged for management of an admittedly larger block in Dublin.)

intheclouds

ckblackrock, all of the above that you have suggested is already in place, however this still leaves you with the problem that people are currently not paying. Yes, the money will come when the property is sold but that could be 20 years away! That doesnt solve the immediate problem for the rest of us. Plus if I sell up and move on, I will not get a refund on the extra I had to pay to cover the non payers when they eventually sell and pay up.

So my original point still stands. Non payers cost the rest of us more money.

riclad

if you wanna live or buy an apartment you,ll have to pay service charges.
if You want to buy a house on a Managed estate you pay service charges .
IF you buy a house you have to pay insurance,
service charges = insurance, plus payment for basic maintenance ,repairs,
Some people who do not pay will not be allowed to use a car parking space,
depending on the management .
I would assume house,s on a managed estate would be cheaper to buy than the local
non managed estate .some blocks in rural area,s have only half the residents who
pay the service charges .
Could the money owed not be taken out of the money you recieve for selling the apartment plus 2 per cent interest per year.
if you want to sell a house you Will need to pay your esb,gas bill, upc bill ,property tax , before the sale goe,s through .

Some people will pay 2k plus services charges for lift maintenance or underground car park ,
even though they they live in block a with no lifts , and they have no car ,
they never use the car park .
eg lifts are only in block b and c .

JillyQ

I live in a mixed development of apartments, duplexes, semi detached, terraced and detached houses. I pay €460 approx per year. We have a full time caretaker, with a big open landscaped green area, carparking is on the surface. fees are well worth it in my opinion. Apartments and duplexes pay more.

Benny122

Ok I need advise please.

I'm thinking of buying a two bed apartment in 10 block complex in the outskirts of a town. It was built in 1978 pre fire regulations.

The estate agent is stating that the management fees are €900-€1000 a year.

Can someone please advise me what questions I need to ask about the feed and what are covered?

He has already confirmed that the management feed cover insurance, public liability, does not cover the refuse/rubbish, does not cover content of apartment. What else should I be asking him?

andekwarhola

Live in a house in a multi unit development. Pay just under 500. The most expensive fee is just under a 1000 for some apartments depending on the size of the communal areas, amount if units in the block etc.

I'm on the board myself and we do advise the agent to review or lower the fees if the chance presents itself, obviously without taking away from the maintenance budget and sinking fund.

andekwarhola

intheclouds wrote: »

Dumb things like people being threatened by solicitor letter for painting their front door a different shade while they have no teeth to go after people who are causing real problems like noise disturbance.

There's little the management company can do about noise disturbance, beyond maybe writing to them, which as you can guess is pretty useless. Writing to a landlord is usually useless as well. It's basically a civil/local authority issue. Even the guards can't do a massive amount save tell them to turn it down before leaving.

Hear your pain about the management company model though, and I'm a director on one. Most are down to basically an abdication of responsibility from local authorities during the Celtic tiger and you're in the horrible situation where it's incumbent on residents to behave with the best interests of the development in mind (primarily by paying their agreed fees) but many don't, and the management company has few resources to recoup them bar lengthy legal proceedings or unpopular measures like clamping.

Sadly a lot of people aren't ready for democratic living.

Bitter, moi?

riclad

Management Fee,s cover insurance,
repairs ,refuse collection,
general maintenance,
eg new gates, or locks on main entrance .
Painting of external walls .
Ask is there sky tv, upc, cable tv avaidable .
Are you limited to one cable tv provider .

ckblackrock

intheclouds wrote: »

ckblackrock, all of the above that you have suggested is already in place, however this still leaves you with the problem that people are currently not paying. Yes, the money will come when the property is sold but that could be 20 years away! That doesnt solve the immediate problem for the rest of us. Plus if I sell up and move on, I will not get a refund on the extra I had to pay to cover the non payers when they eventually sell and pay up.

So my original point still stands. Non payers cost the rest of us more money.

The thing you can do is to penalise the non-payers heavily. Unfortunately, this only works where the majority are paying, so that enough fees come in to keep the estate going. If it is a serious problem where you live, best thing to do is to raise the fees sky high, and then give a massive incentive for paying on time, by way of a big discount - say 20% - to those who pay up front or by regular standing order. That's what happens in our block. It doesn't whip everyone in to shape, but it means we get 20% extra when people eventually pay - either because the sell the apartment or because they are settle before being taken to court. We have a pair of dipsticks who have to be chased regularly for payment, they dont pay for a year, then after being threatened eventually pay up, having cost themselves maybe 50% more (in solicitors fees, interest and forfeited discount) than if they'd paid in the first instance; then 6 months later it starts all over again - has been happening now for 5 or 6 years.