Running a management co without an agent

Cyrus

Hi all just looking for some opinions on this.

We moved into a new development about a year ago, small one of only 20 houses or so. The last one has been sold so the management co is being handed over to us soon. The council arent taking the estate in charge (hence the management co). We have communal bins and landscaped grounds and lighting etc (theres a fair bit of green space all nicely landscaped).

We are having a meeting in a few weeks to discuss the set up of the management co, what opinions people have etc and a few people have suggested that we run it ourselves and not appoint an agent to save money.

Its a fine idea in practice but i cant help but feel that a) it would be a lot for whoever takes it on to do effectively for free and b) without a third party involved to officiate or mediate it could potentially lead to row between neighbours.

Any thoughts?

TooObvious

The main question here is - will those who are proposing not having a management agent, volunteer to act as Directors and carry out all tasks usually carried out by the management agent as well as ensuring that the OMC complies with the legislation?

In my experience, those who are against managing agents, are also against volunteering and carrying out the essential work required.

20 units is a small enough development so the management agents fee may be disproportionate to the level of other expenditure items. Not having an agent will save you say minimum €200 per unit on that line item, but you will still have the other costs and associated admin for billing, collections, paying invoices etc.

My view - not worth the hassle or the stress.

Marcusm

Cyrus wrote: »

Hi all just looking for some opinions on this.

We moved into a new development about a year ago, small one of only 20 houses or so. The last one has been sold so the management co is being handed over to us soon. The council arent taking the estate in charge (hence the management co). We have communal bins and landscaped grounds and lighting etc (theres a fair bit of green space all nicely landscaped).

We are having a meeting in a few weeks to discuss the set up of the management co, what opinions people have etc and a few people have suggested that we run it ourselves and not appoint an agent to save money.

Its a fine idea in practice but i cant help but feel that a) it would be a lot for whoever takes it on to do effectively for free and b) without a third party involved to officiate or mediate it could potentially lead to row between neighbours.

Any thoughts?

20 houses, South Dublin if I remember? I would think that once you have sorted insurance, a refuse contract and a grounds keeping company that you will have little extra to do in physically running the development and the admin of a company is not that onerous. Not sure what the minimum mgt agent would cost but I'm going to guess around 3k. That would be better spent on a some nice mature trees.

andekwarhola

I'd say you'll be OK with what sounds like a small development of houses with mature landscaping.

Agent fees could be overkill which such a small development and you could, as said, spend the money elsewhere.

To be honest, I live (and am a resident director) in a large development and really envy you as it would be a relatively easy place to run and keep looking smart.

That said, it'll still be work. Paying (and tendering) service providers, sorting stuff like insurance, collecting fees, communal maintenance and other occasional legal stuff.

It's essential you point out that not getting an agent means everybody must share director duties fairly, perhaps by rotating the board every few years or whatever.

Cyrus

thanks all some very good advice,

its a nice little estate in a nice area and we want to keep it well, looks like its possible to do it ourselves, but as you say its a case of spreading the load around

BrokenArrows

Cyrus wrote: »

thanks all some very good advice,

its a nice little estate in a nice area and we want to keep it well, looks like its possible to do it ourselves, but as you say its a case of spreading the load around

If someone was willing to take on the brunt of the workload there is no need for them to do it for free as long as it still works out significantly cheaper than hiring a management company. Maybe €10 an hour.

Some of the landscaping duties could be handed out to some of the residents who can cut the grass along with their own gardens. Cost of fuel can be claimed back + a little extra to cover wear and tear of the lawn mower.

More complicated duties like tree cutting etc would need to be contracted out.

Tidying up the estate should be a simple enough task if done on a regular basis. Have twice monthly cleanup days where everyone gets involved. Walk around the estate and sweep and pickup rubbish.

happyfriday74

Running it yourself is a great idea but in practice its quite challenging. People who may be all on board at the start may loss all enthusiasm and leave a few people carrying the can for the whole development.

I ran a small development of 8 units and you'd be surprised how time consuming it was. It was only doable as by chance one owner was an accountant and another a building contractor and both these disciplines helped immensely- if your estate is 40 odd houses as you say you have a bigger pool to select from!

Aside from cutting the grass and keeping the lights on there are also accounts to be filed(big fines if not done properly!) , insurance to be arranged and long term maintenance and sinking fund to be reviewed.

Bear in mind that if the estate is run in an ad hoc manner it will bite the owners when the time comes to sell as purchasers, particularly a learned investor, might use an unusual or ad hoc managed management company as a point to price chip.

best of luck with it and hope it goes well.

pinkypinky

I'm going to be a nay sayer and suggest that while it all sounds doable, you're still better off with an agent. Why not put it to tender and get some quotes? You don't have to accept them. What if the one person who agrees to do the lion's share gets sick? Someone else will need to take over straightaway.

I've been a director of my board for 9 years and even with a good agent, I'm still in contact with them at least once a week to check on things.

Cyrus

pinkypinky wrote: »

I'm going to be a nay sayer and suggest that while it all sounds doable, you're still better off with an agent. Why not put it to tender and get some quotes? You don't have to accept them. What if the one person who agrees to do the lion's share gets sick? Someone else will need to take over straightaway.

I've been a director of my board for 9 years and even with a good agent, I'm still in contact with them at least once a week to check on things.

i totally agree, its someone else that has raised the idea, i want to have some proper rebuttals rather than just a general feeling that its not a good idea and that there is more to it than people think :P

seamus

Cyrus wrote: »

i totally agree, its someone else that has raised the idea, i want to have some proper rebuttals rather than just a general feeling that its not a good idea and that there is more to it than people think :P

Price all your options.

As others say, I'd be inclined not to make it voluntary.
If it's a voluntary position, the person acting as the agent will get a pain in their hoop and will take liberties (expenses, anyone), or will just plain disengage and do no work.

In an ideal world, the board of directors would appoint another resident (who is not on the board) as the "agent", and pay them a salary / fee for acting in an agent/caretaker capacity.

Then if the person finds it's more work than the fee allows or the board is not happy with the arrangement, you can change your mind.

Of course, this leaves other issues - one of your neighbours is the agent, and so is privy to all of your dealings with the management company. And the potential for falling out which is there.
People may also be too polite to pull up the agent for poor work, so you end up paying this person a good fee for a bad job.

On the agent's part it means other residents calling to their door at all hours on a Saturday night complaining that a toilet is blocked.

So while you may overpay for a professional management agent, in an estate of just 20 units, having a 3rd party do the dirty work can make for a much happier life.

happyfriday74

Anything over 6 or 7 units and i'd suggest you get an agent. You'd be surprised how much work is done that the typical owner would not notice.

As the poster above says Agent aside an OMC director(and a good agent) generally speak to each other on estate issues quite regularly.

Your dead right about the ones who push for doing it themselves are usually the ones who fade away after the meeting!

the_syco

Cyrus wrote: »

Its a fine idea in practice but i cant help but feel that a) it would be a lot for whoever takes it on to do effectively for free and b) without a third party involved to officiate or mediate it could potentially lead to row between neighbours.

Keep in mind that free can be costly for two reasons;

• The guy doing it doesn't know how to do things properly (because if they did, they'd probably charge!).
• The person doing it gets kickbacks from tradespeople that they know, so on the books it looks like it's all on the up and up, but it isn't.

And as stated above, they could start using the funds for personal use.