Why pay managment fees

Hollister11

I live in a estate that was build just over 10 years ago. It's "managed" by a management company, and they charge €900 a year. I can't see where this is being spent, other then salaries for the suits. Bins are an extra €15 per week, and the security guard was let go. In fairness the fee was reduced by 200 when he was let go, but 900 seems like extortion.

EDIT: This is my parents property not mine. I live with them.

Allinall

Hollister11 wrote: »

I live in a estate that was build just over 10 years ago. It's "managed" by a management company, and they charge €900 a year. I can't see where this is being spent, other then salaries for the suits. Bins are an extra €15 per week, and the security guard was let go. In fairness the fee was reduced by 200 when he was let go, but 900 seems like extortion.

If you own the property you are a member of the management company and should get yearly accounts detailing all their income and expenditure.

Hollister11

Allinall wrote: »

If you own the property you are a member of the management company and should get yearly accounts detailing all their income and expenditure.

It's my parents property. I'm going to enquire about the accounts during the week.

ted1

Hollister11 wrote: »

I live in a estate that was build just over 10 years ago. It's "managed" by a management company, and they charge €900 a year. I can't see where this is being spent, other then salaries for the suits. Bins are an extra €15 per week, and the security guard was let go. In fairness the fee was reduced by 200 when he was let go, but 900 seems like extortion.

If you didn't pay you'd have the following costs.

House insurance 300 euro
Annual maintenance 200 euro
Sinking fund 400, to replace your boiler , pump, roof etc

Garden upkeep et mc

Yourself isit

Hollister11 wrote: »

I live in a estate that was build just over 10 years ago. It's "managed" by a management company, and they charge €900 a year. I can't see where this is being spent, other then salaries for the suits. Bins are an extra €15 per week, and the security guard was let go. In fairness the fee was reduced by 200 when he was let go, but 900 seems like extortion.

Insurance, electricity, maintenance, painting, and a sinking fund (new law since 2011)

Atlantic Dawn

It's a cheap way for the council to not be involved in the maintenance costs of the estate, makes planning permission easier, provides a constant source of income for those living off the backs of others, it's the future.

Hollister11

ted1 wrote: »

If you didn't pay you'd have the following costs.

House insurance 300 euro
Annual maintenance 200 euro
Sinking fund 400, to replace your boiler , pump, roof etc

Garden upkeep et mc

House insurance and repairs are not included and are paid for by the home owner when needed.

Yourself isit

Atlantic Dawn wrote: »

It's a cheap way for the council to not be involved in the maintenance costs of the estate, makes planning permission easier, provides a constant source of income for those living off the backs of others, it's the future.

Don't think anybody is making a huge profit of it.

colm_mcm

ted1 wrote: »

If you didn't pay you'd have the following costs.

House insurance 300 euro
Annual maintenance 200 euro
Sinking fund 400, to replace your boiler , pump, roof etc

Garden upkeep et mc

The management company really covers the above?

Yourself isit

Hollister11 wrote: »

House insurance and repairs are not included and are paid for by the home owner when needed.

That's your internal insurance. The common areas need insurance.

Atlantic Dawn

Yourself isit wrote: »

Don't think anybody is making a huge profit of it.

Councils are making a huge saving from it and they also take the property tax from them the same as an estate they control.

Yourself isit

colm_mcm wrote: »

The management company really covers the above?

I don't think the boiler unless it is shared. The roof for apartments, yes. That's covered.

Hollister11

Yourself isit wrote: »

Insurance, electricity, maintenance, painting, and a sinking fund (new law since 2011)

Certainly not home insurance, fair enough public liability. By electricity, do you mean street lighting. The houses have never been repainted by the management company in the 10 years of operation. In fact the entire estate could do with a pain, every house and apartment has all sorts of red/black colouring all over the properties.

I have never heard of a sinking fund. Would this include home repairs?

newacc2015

Atlantic Dawn wrote: »

It's a cheap way for the council to not be involved in the maintenance costs of the estate, makes planning permission easier, provides a constant source of income for those living off the backs of others, it's the future.

I agree with the council's though, they should not have to run for the maintenance of these estates. Most developments built in the 1930s/1960s are main roads that we all use. Most modern developments are not far off gated communities ie there is minimal public use, as most cars/people using the footpaths and roads are residents.

The absence of a proper property tax is a massive issues for councils. The token 0.17% that people pay for LPT is not an enough for all these new roads/footpaths, gardens etc for councils to maintain. The cost should be borne by the residents.

Yourself isit

Hollister11 wrote: »

Certainly not home insurance, fair enough public liability. By electricity, do you mean street lighting. The houses have never been repainted by the management company in the 10 years of operation. In fact the entire estate could do with a pain, every house and apartment has all sorts of red/black colouring all over the properties.

I have never heard of a sinking fund. Would this include home repairs?

The common areas in the apartment would have to be lit not sure about external lighting. I really only know the law for appartments but the sinking fund would handle external damage or roof damage there yes. If insurance didn't.

Atlantic Dawn

newacc2015 wrote: »

I agree with the council's though, they should not have to run for the maintenance of these estates. Most developments built in the 1930s/1960s are main roads that we all use. Most modern developments are not far off gated communities ie there is minimal public use, as most cars/people using the footpaths and roads are residents.

The absence of a proper property tax is a massive issues for councils. The token 0.17% that people pay for LPT is not an enough for all these new roads/footpaths, gardens etc for councils to maintain. The cost should be borne by the residents.

What then should LPT be used for? A multi million euro slush fund to look after ducks in the local estuary perhaps?

ted1

newacc2015 wrote: »

I agree with the council's though, they should not have to run for the maintenance of these estates. Most developments built in the 1930s/1960s are main roads that we all use. Most modern developments are not far off gated communities ie there is minimal public use, as most cars/people using the footpaths and roads are residents.

The absence of a proper property tax is a massive issues for councils. The token 0.17% that people pay for LPT is not an enough for all these new roads/footpaths, gardens etc for councils to maintain. The cost should be borne by the residents.

There are development levies to cover infrastructure

8850 per unit in DLRCoCo
http://www.dlrcoco.ie/en/planning/planning-fees-charges/development-contribution-schemes

dubrov

newacc2015 wrote: »

I agree with the council's though, they should not have to run for the maintenance of these estates. Most developments built in the 1930s/1960s are main roads that we all use. Most modern developments are not far off gated communities ie there is minimal public use, as most cars/people using the footpaths and roads are residents.

The absence of a proper property tax is a massive issues for councils. The token 0.17% that people pay for LPT is not an enough for all these new roads/footpaths, gardens etc for councils to maintain. The cost should be borne by the residents.

I disagree with most of the above.
Most new developments (in Dublin anyway) have very small common areas, certainly compared to developments in the 80s.
The buyers in these new development have to pay for the maintenance of the common areas as well as the maintenance of older estates (via taxes).
Either everyone should pay for maintenance of their own estates it should come out of a central pot.

It is also ridiculously inefficient to have a management company for each estate meaning there are costs for setting up the management company, preparing annual accounts etc. I'd imagine this might eat up about €200 of the OPs management fee

Mrs OBumble

Hollister11 wrote: »

EDIT: This is my parents property not mine. I live with them.

So why exactly do you think the details are your business?

Do you scrutinise their work contracts too?

Samuel T. Cogley

The management fee is a fee agreed by all the shareholders of the OMC. All a member needs to do is pitch up at the AGM and make their thoughts known; very, very few do. If a shareholder is being oppressed there is a body of company law, that I have completely forgotten, that allows them to seek relief.

tinkerbell

Your parents are members of the management company. It is THEIR company that are charging management fees. It is none of your business what the fees are used for since you are not a member! If your parents have an issue with the company of which they are part of, then they need to discuss it with other members at an AGM.

Yourself isit

Mrs OBumble wrote: »

So why exactly do you think the details are your business?

Do you scrutinise their work contracts too?

Presumably they might have asked him. Op you can be a proxy for your parents at the next AGM. They should have the details.

Hollister11

Mrs OBumble wrote: »

So why exactly do you think the details are your business?

Do you scrutinise their work contracts too?

Who do you think you are?

My parents share every details of income and expenses with me and my siblings. They always have since we were young teens. That was their way of teaching us the value of money and it shows us how hard our parents work for everything we have. So yes, it is my business.

Yourself isit

Hollister11 wrote: »

Who do you think you are?

My parents share every details of income and expenses with me and my siblings. They always have since we were young teens. That was their way of teaching us the value of money and it shows us how hard our parents work for everything we have. So yes, it is my business.

Well,then. Go to the AGM.

Hollister11

Yourself isit wrote: »

Well,then. Go to the AGM.

I plan too this year.

davo10

Op I live in a small development which has management fees and I was on themanagement committee for 10 years, thankfully I managed to persuade someone else to replace me a few years ago.

It was very common for us to recieve quite narky letters from owners about management fees, but all of these had one thing in common, they never showed up to AGMs so did not know how the fees were decided apon.

You/your parents are members of the management company, you have a right to attend MC meetings and for your opinion to be heard. Where a number of quotes have been recieved for a service like painting, gardening, refuse etc, a vote is taken on which provider to use, the cheapest isn't always the best.

Put simply, your questions would be answered at the AGM and you can forward a motion to change anything you are unhappy with. But if you don't attend, then you cannot complain about the decisions taken.

Incidentally, payment of MF's is part of the purchase contract and a property cannot be sold without confirmation from the MC that all fees are paid. The MC can apply for a lean on the property so that outstanding fees come out of sale price. We had to do this for two properties which were bought as rental units, even though they were always rented the owners didn't pay MF's. The MC got unpaid fees when properties sold.

The sinking fund was brought in in the MUD Act, it's a rainy day fund for repairs, unexpected outlays etc. Every managed development has to have one.

Paulw

ted1 wrote: »

If you didn't pay you'd have the following costs.

Actually, if you don't pay, you will end up in court and be forced to pay. It is very very seldom that an OMC wouldn't win a case and force payment.

Management fees are a legal obligation. You agree to pay them when you buy the property, by the contracts you sign.

Management company makes no profit. All fees gathered are used in the development. This is detailed in the set of accounts produced every year.

All unit owners are members of the management company. They get a set of accounts each year and are invited to the company AGM. There the management fees for the year are discussed and approved.

If you don't understand how a management company works, then it's time you did some research.

April 73

Hollister11 wrote: »

I live in a estate that was build just over 10 years ago. It's "managed" by a management company, and they charge €900 a year. I can't see where this is being spent, other then salaries for the suits. Bins are an extra €15 per week, and the security guard was let go. In fairness the fee was reduced by 200 when he was let go, but 900 seems like extortion.

EDIT: This is my parents property not mine. I live with them.

Going back to the original post - it's not clear what type of development or property this refers to.

If it's a fee for the management company to look after just the green areas (common in Meath & Kildare) then €900 seems a lot on the face of it.

If it's a multi-unit development with building maintenance & open spaces upkeep to fund, it's probably average.

The best way of understanding how the company is being run is by reading the accounts & attending the AGM.

"The suits" are generally unpaid directors who own property in the development & give their time for free to run the company. I was that mug for five years.

athtrasna

Mod note

Posters are reminded to remain civil at all times. A couple of posts in this thread are pushing the "don't be a dick" rule to its limit.

c montgomery

Op educate yourself as to the running of a management company before deciding to have a winge.

They don't make a profit, directors are unpaid and everything is accounted for and audited. They may be rogue ones out there but most are good.

Go to an agm and you might even be able to become a director yourself. It's a thankless job that takes up some of your free time and as you have clearly demonstrated is unappreciated.

Tea drinker

c montgomery wrote: »

Op educate yourself as to the running of a management company before deciding to have a winge.

They don't make a profit, directors are unpaid and everything is accounted for and audited. They may be rogue ones out there but most are good.

Go to an agm and you might even be able to become a director yourself. It's a thankless job that takes up some of your free time and as you have clearly demonstrated is unappreciated.

This. The most common issue with these funds is a low or non existent sinking fund. I think any "cowboys" taking people for a ride got outed post celtic tiger.

quadrifoglio verde

Op is it an estate consisting of apartments and houses, just houses or just apartments

If it's just apartments it's very cheap, if it's houses it's very expensive and if it's a mixture, there's a good chance the house owners are subsidising the apartment owners

Paulw

quadrifoglio verde wrote: »

If it's just apartments it's very cheap, if it's houses it's very expensive and if it's a mixture, there's a good chance the house owners are subsidising the apartment owners

No one is subsidising anyone. You sign a legal contract to be part of the management company and your fees (or usually your percentage of the whole management company fee) are clearly displayed in the contracts.

Also, there is no way to know if fees are cheap or expensive, without fully knowing the makeup of the development and how fees are spent.

Blanket statements like this cause more anger and confusion and don't help anyone constructively.

Delacent

I used to manage a small omc in a estate of 10 houses.

Annual fee was €900.

Main expense was

Public liability insurance for common areas - €800

Common area maintenance - grass cutting etc, - €1,200

Lighting - €1000

Sinking fund - €2-3000

Repairs - was usually about €1000 a year - includes any sewage issues, lighting issues, potholes, additional one-off landscaping etc.

Audited accounts (obligatory until last year) €1500.

All costs include vat which was not reclaimable as it was not vat registered.

If there were apartments, then building insurance (not contents) would also be included as would cost of maintaining interior common areas.

Mrs OBumble

Yourself isit wrote: »

Well,then. Go to the AGM.

The OP is not an owner, so has no automatic right thing to attend, unless the parents nominate him/her as their proxy.

I dont know if most management companies allow spectators at their meetings, but i doubt it.

If the property owners really did share all their financial information with the OP, then s/he should already be well aware of the company's accounts and what the money is spent on.

Yourself isit

Mrs OBumble wrote: »

The OP is not an owner, so has no automatic right thing to attend, unless the parents nominate him/her as their proxy.

I dont know if most management companies allow spectators at their meetings, but i doubt it.

If the property owners really did share all their financial information with the OP, then s/he should already be well aware of the company's accounts and what the money is spent on.

We had already discussed being a proxy in my previous reply.

c montgomery

Tea drinker wrote: »

This. The most common issue with these funds is a low or non existent sinking fund. I think any "cowboys" taking people for a ride got outed post celtic tiger.

Indeed, we try to have 1.5 times annual collected fees in the sinking fund.
I have seen developments where the sinking fund is zero.

CIARAN_BOYLE

c montgomery wrote: »

Indeed, we try to have 1.5 times annual collected fees in the sinking fund.
I have seen developments where the sinking fund is zero.

In a previous job we audited management companies. Our rule was the company had to have sufficient funds in the sinking fund.

Our rule was

If it's apartments and there is a lift the company needed 10k. We had a list of other features in common areas and we added up what was relevant.

Tea drinker

Paulw wrote: »

No one is subsidising anyone. You sign a legal contract to be part of the management company and your fees (or usually your percentage of the whole management company fee) are clearly displayed in the contracts.

Also, there is no way to know if fees are cheap or expensive, without fully knowing the makeup of the development and how fees are spent.

Blanket statements like this cause more anger and confusion and don't help anyone constructively.

Depends, some of the apartment owners get away with paying nothing, even now with sky high rents. We are subsidising them. It's a legal issue.
I also pay a much higher fee than the smaller apartments.... so I'm getting boned there too.

Paulw

Tea drinker wrote: »

Depends, some of the apartment owners get away with paying nothing, even now with sky high rents. We are subsidising them. It's a legal issue.
I also pay a much higher fee than the smaller apartments.... so I'm getting boned there too.

Your fees are a set percentage of the overall budget. It doesn't change depending on who pays and who doesn't. Those who don't pay must eventually pay, either through court proceedings or when a property is sold. How the fees are gathered depends on how your management company decide on how to pursue those fees.

Again, the amount you pay is a fixed rate, which is clearly stated in your contracts. Their rate is also fixed. While it will be different, it is what you legally agreed to when you signed the contracts and bought.

You pay a higher fee based on the contracts you signed, normally based on the floor space or similar of your place.

So, please understand how a management company is funded and what everyone's legal obligation is. Read your own contracts and you will see how your fee is arrived at, combined with your company budget, as detailed at your AGM.

There are only two things you need to understand - the overall fee for the whole management company budget, and what percentage of that you are legally obliged to pay.

Del2005

quadrifoglio verde wrote: »

Op is it an estate consisting of apartments and houses, just houses or just apartments

If it's just apartments it's very cheap, if it's houses it's very expensive and if it's a mixture, there's a good chance the house owners are subsidising the apartment owners

We don't know if the complex has electric gates or what other expensive items are in the development, I know when I was looking to buy I avoided anywhere with lifts, electric gates and underground parking as these make the management fees high.

We also don't know if they have been paying the same amount since they bought or if it's just this year that is high. The MC could be trying to build its sinking fund if it wasn't doing it before.

But as said all these will have been sent to the OPs parents. So the first thing they should do is to read the minutes of the AGM and the accounts that their parents received.

andekwarhola

I'm an unpaid resident director on a management company. I'd be interested about how I could make a living from it by being a 'suit'.

Can you elaborate on that part from your obvious position of expertise?

Sleeper12

I'm not a fan of management fees. To me it's a continuation of the old ground rates we used to pay but you agree to pay it when you buy the property. I don't get the winging years later.
The fees usually include parking. I see some companies are thinking outside the box and are clamping people who won't pay.

Joe222

Can anyone tell me is there an easy to understand booklet out there that lays down the do's and the don'ts of running a management company.

I have seen the MUD Act but much of it refers to company law (endless pages to read) with very little finer detail, e.g.

How are common areas designated, e.g. if A has a bigger area outside their apartment than B is B entitled to use the space outside A's apartment and let's say put their bike there or their barbecue. Where does the occupier's entitlement to personal space outside their property extend, e.g. to put their own table and chairs.

Are all fees laid out in purchase contracts? If contracts are lost would the sale solicitor have them?

How is voting decided at meetings? Is it majority rule?

What should be in house rules?

Thanks

Del2005

Joe222 wrote: »

Can anyone tell me is there an easy to understand booklet out there that lays down the do's and the don'ts of running a management company.

I have seen the MUD Act but much of it refers to company law (endless pages to read) with very little finer detail, e.g.

How are common areas designated, e.g. if A has a bigger area outside their apartment than B is B entitled to use the space outside A's apartment and let's say put their bike there or their barbecue. Where does the occupier's entitlement to personal space outside their property extend, e.g. to put their own table and chairs.

Are all fees laid out in purchase contracts? If contracts are lost would the sale solicitor have them?

How is voting decided at meetings? Is it majority rule?

What should be in house rules?

Thanks

You either have a balcony or terrace for your own use, everywhere else is common areas so you can't store anything there unless it is designated as a storage location ie bike racks.

Fees change every year. You get a copy of the accounts and voting would be layed out in the company documents.

Samuel T. Cogley

andekwarhola wrote: »

I'm an unpaid resident director on a management company. I'd be interested about how I could make a living from it by being a 'suit'.

Can you elaborate on that part from your obvious position of expertise?

To be fair, although smartly dressed I can never remember if he's in a suit or not - our managing agent is very well remunerated and functions as the OMC's company secretary. Worth every single penny and more though.

So I think it's some sort of qualification and running your own business, which will involve dealing with quite a few nutters and many, many whingers.

Your, rather amusingly put, point though is well made.

Joe222

Del2005 wrote: »

You either have a balcony or terrace for your own use, everywhere else is common areas so you can't store anything there unless it is designated as a storage location ie bike racks.

Fees change every year. You get a copy of the accounts and voting would be layed out in the company documents.

Not every development has a balcony/terrace for each unit. Some I have seen have a common outside balcony but some units have more space outside their door than others.

Can anyone answer the other questions I posted above?

If there is a lift or a security gate in the development does everyone in the mgt company have to pay into its service?

What about bins? If someone says they dispose of their own waste can they exempt themselves from that fee?

I wish this stuff was written down somewhere as contracts don't mention this stuff in detail and neither does the MUD Act. It seems to leave it upto the mgt company to make house rules.

Paulw

Every unit owner makes up the management company. "They" don't make up rules.

Normally these "house rules" are actually terms of contract - made from the Lease Contract signed when buying. So, people need to read this Lease Contract, and any other contracts they signed when buying their property. They also should read the Articles of Association of their management company.

Every development is different. Every company is different. Different things apply to some companies and not others. Gates, bins, common area, etc will all differ.

There are no separate fees. There is one fee - your management company fee. What you pay is a percentage of the total budget for running the company for the year. You can't pick and choose what parts you would like to pay and what you wouldn't. You are legally bound to pay your management fee, no matter what it is made up of.

Everything is written down. Everything is covered by documentation and law.

Samuel T. Cogley

Joe222 wrote: »

Not every development has a balcony/terrace for each unit. Some I have seen have a common outside balcony but some units have more space outside their door than others.

Can anyone answer the other questions I posted above?

If there is a lift or a security gate in the development does everyone in the mgt company have to pay into its service?

What about bins? If someone says they dispose of their own waste can they exempt themselves from that fee?

I wish this stuff was written down somewhere as contracts don't mention this stuff in detail and neither does the MUD Act. It seems to leave it upto the mgt company to make house rules.

I'm going to trademark the following term as I use it some much.

YOU are the management company. (TM)

There is nothing to stop YOU exercising your vote that blocks without lifts should not have to pay for them, for example. I raise it every year that people on the ground floor in two of our blocks shouldn't have to pay for the lifts. I honestly don't care, it would actually cost me money but I'm a director with our OMC sdo feel if it's said to me it should be raised.

Every year I raise it, every year the people that ask me to raise it don't turn up to the AGM to vote on it. It would literally take 2 or 3 people to carry the vote in a complex of almost 200 units where the same 8 or 9 people turn up every year. (Assuming it doesn't need a special resolution or unanimous vote, which it might come to think of it.)

If you don't want to live on a managed complex/estate don't move into one, simples!

gerarda

We recently sold our first house and always paid mgmt fees (cannot sell otherwise). Our neighbours of 10 years never paid a cent and was wondering if this will eventually catch up with them? He was contacted by the company who threatened him with a court appearance, that was 4 years ago and it never happened.

Samuel T. Cogley

gerarda wrote: »

We recently sold our first house and always paid mgmt fees (cannot sell otherwise). Our neighbours of 10 years never paid a cent and was wondering if this will eventually catch up with them? He was contacted by the company who threatened him with a court appearance, that was 4 years ago and it never happened.

We have a very small number of people that don't. I'll admit it's satisfying seeing our managing agent get every cent out of them and interest when they're selling.

Unless it gets chronic, we've found it better to wait it out and deal with it at the selling stage. In many cases people aren't in a position to pay them and as the old adage goes, you can't get blood out of a stone.