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Non-payment of Management fees in an apartment complex.

Cupra280

What are people's views on the non-payment of fees?

When I bought my apartment, I was advised by my solicitor about the fees, and what they covered. I was then happy to pay, as it saved me having to worry about insurance, refuse, and all the rest.

However, shortly afterwards, our Management Agent stated that in their experience, 25% of people pay in full, 25% quarterly, 25% monthly, and 25% not at all. (This would eventually be paid to the Company when the ownership of the particular apartment changes).

I do have a problem with non-payment. Especially if people go out of their way to avoid paying.

I would be interested to here others views on the matter. In particular, it would be interesting to here what initiatives others took in order to secure payment by defaulters.

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foxatron

Im in a development with about 150 apartments....at our agm each year we get a whooping turnout, usually about 8 people and thats including the directors!

seamus

foxatron wrote: »

Im in a development with about 150 apartments....at our agm each year we get a whooping turnout, usually about 8 people and thats including the directors!

And then people wonder why the chairman and the directors always seem to be able to do whatever the hell they want around the complex.

My sister-in-law lives in a block where a guy living in the penthouse apartment - which was the only apartment on the top floor - was basically in control of of the OMC for years. Like something out of a Mafia film, "his" floor was painted an entirely different colour to the rest of the floors and had furniture and paintings hung in the common area leading to his door. All he missing was marble floors and orchestral music

He consistently got things that he wanted like having trees chopped down that were spoiling his view and getting parking spaces moved around/renumbered to suit where he wanted to park. The other directors just let him at it because they didn't want to deal with his whinging and nonsense when he didn't get his way.

Cupra280

P. Breathnach wrote: »

Non-payment of fees is a problem for every MUD. I looked at the accounts for a number of complexes, all of them in areas where you might expect relatively few low-income households. Unpaid fees ranged from about 10% to about 25%. I suspect it might be higher in areas where incomes are low.

The most important - and usually the largest - item in the budget is block insurance. Probably next is refuse disposal.

I think that even the most grasping managing agent would not let the insurance lapse, even if that meant not getting paid. I suspect that no agent would entirely eliminate refuse disposal services.

I'd have some sympathy for an agent who took the position that his/her fees be paid before anything is spent on repainting the common areas.

My Agents actually did this a few years ago.

Cupra280

<MOD SNIP >

Awarding contracts selectively only costs Directors as well. Remember, Director have to pay fees for their own apartments too.

I know in my complex, the Directors of the OMC work in conjunction with the agents every year, and that the agent has to provide at least 3 quotations for the Directors to consider for each service.

And as regards becoming a Director, the Multi-Unit Development Act states that there is a time limit that a Director can serve on the Committee. I have served as a Director for a number of years. And there is always someone willing to take over.

Paulw

Cupra280 wrote: »

And as regards becoming a Director, the Multi-Unit Development Act states that there is a time limit that a Director can serve on the Committee.

There is no committee, only a board of directors.

In the MUD, a director must step down after 3 years, however, that same director can be re-elected if nominated again to stand.

In our place, it is very hard to get people to stand up to be directors. I have been a director for 7 years (of the 8 years we have had control). I step down every year, but always seem to be nominated, seconded and approved by the floor. I would gladly step down. We usually have 3 directors elected to make the decisions.

We have 112 units, our AGM quorum is 7, but usually get about 10-12 people attending. I do wish we had more, but most years the place just ticks over. Our fees have only fluctuated a little over the years, going up and down a little, depending on the big items - insurance and refuse collection.

How Strange

We've had a brilliant managing agent for the last 3 years and there's a big difference in our development. They aggressively pursued non payers and have been very successful. Their vans are always on the development doing maintenance, landscaping etc and if you complain about anti social behaviour they follow up on it. We've always paid our charges but it was very demoralising to hear at the AGM 3 years ago that we were on the point of bankruptcy due to large scale non payment and the insurance and bins may have to be cancelled.

crooked_feet

its hardly surprising that people question what they are getting , fees are in the majority of cases far too high , ive checked the past two years set of accounts for a development ive recently bought into , 1100 euro per anum for a development which doesnt even have a lift or electric gates ( mine is a ground floor two bed with a parking space )

claims of electricity costs having risen when energy costs have gone down , refuse charges which would be more expensive than in the wilds of leitrim

serious taking the proverbial and cosy arrangements between service providers and directors

athtrasna

crooked_feet wrote: »

its hardly surprising that people question what they are getting , fees are in the majority of cases far too high , ive checked the past two years set of accounts for a development ive recently bought into , 1100 euro per anum for a development which doesnt even have a lift or electric gates ( mine is a ground floor two bed with a parking space )

claims of electricity costs having risen when energy costs have gone down , refuse charges which would be more expensive than in the wilds of leitrim

serious taking the proverbial and cosy arrangements between service providers and directors

If you have a problem you should get involved! I've been a Director of our management company for 12 years and can assure you there's nothing untoward or cosy arrangements. I give upwards of 50 hours a year for free to make our development a better place. I pay full fees so any cost issues affect me too.

April 73

crooked_feet wrote: »

well many situations occur where the directors get their fees waived , this increases the charges for everyone else

I have never seen this happen in any management company I've been a member of. I was also a management company director for 5 years and paid the same fees as everyone else. My services & time were donated for free.

If directors were to have their fees waived this would have to be voted on at an AGM where all members have a vote.

ongarboy

seamus wrote: »

And then people wonder why the chairman and the directors always seem to be able to do whatever the hell they want around the complex.

My sister-in-law lives in a block where a guy living in the penthouse apartment - which was the only apartment on the top floor - was basically in control of of the OMC for years. Like something out of a Mafia film, "his" floor was painted an entirely different colour to the rest of the floors and had furniture and paintings hung in the common area leading to his door. All he missing was marble floors and orchestral music

He consistently got things that he wanted like having trees chopped down that were spoiling his view and getting parking spaces moved around/renumbered to suit where he wanted to park. The other directors just let him at it because they didn't want to deal with his whinging and nonsense when he didn't get his way.

Ha ha...that sounds very familiar!!:D;)

Where I live, they also introduced parking permits that would only be issued to compliant management fee payers and those that didn't found their cars clamped. There was a lot of groaning about it and Socialist TDs running to the aid of the clamped car owners for cheap publicitiy (same TDs having zero regard for the compliant residents of their constituency who suffered for years due to their neighbours non compliance). As a result of the parking permit system, compliance rose from under 50% to almost 80% and the effects were visible as regards more frequent common area lawns cut, common walls painted, better landscaping and litter picking so it was a good idea. Oddly enough, the permit system has been scrapped this year so my concern is that non compliance will creep up again resulting in past deterioration of the area resuming. I support management fees in such developments as long as the costs are completely transparent and that it is clear that all legal route efforts are being used to chase non payers.

Fiona

I have always paid my mgt fees in full and on time even when I had the property rented out.

Makes me sick people sense of entitlement in this country, I shouldn't have to pay because lark.....

I would however love my windows to be cleaned more, I live on the top floor and I am back in my apt 6 months and they have not been touched, so I just bought an extendable window washer thingy in Aldi for a tenner I gave up asking for them to be done.

I have no problem paying for a service when it's delivered, it annoys me paying and not getting the full value for money. But doesn't mean I will stop paying my fees.

andekwarhola

It beggars belief when you read that people that have paid hundreds of thousands of euro on a property in a managed developmrnt (and are therefore contractually part of the company and liable for fees) but they are so misinformed or disinterested as to not even grasp the difference between the agents and the company itself.

Our development now has about 90% payment rates (albeit some on pretty low repayments) but when we took over it was much lower with no sinking fund (now have one) and significant debts (now on track to be cleared in a year or so). That said, none of us have ever been thanked by anybody despite not being able to stand down because nobody else will do it.

Had to introduce permit parking /clamping (now stopped) and locked waste facilities to get people to pay up.

Nobody in their right mind wants to do this stuff but the amount of people that will brazenly use paid communal facilities without paying (despite being well able to) is staggering.

You can say it's not anybody's business if you pay your bills but it is when you're having your waste disposal, landscaping, lighting and block insurance paid for by other people.

If services are shoddy in a development, chances are there's no money in the company so not paying your fees just makes it worse.

/rant

SarahMollie

Yeah have to say, I'm also surprised at ppl not knowing the difference, especially those who live/own in these types of developments.

My development has almost full compliance, but I've previously lived in places where that was not the case. Our MA offers quarterly direct debit options etc, and seem to be willing to work with people once they pay over time, but non payment is acted against aggressively.

Back when I was renting, my landlord wasnt paying his fees and I went to go to work one morning and my car was clamped as my parking permit had been revoked. Also when I would ring the MA to notify them of a safety/security issue (ie, door to the complex being broken and neighbourhood kids coming in and hanging out on our stairs/lift making strange noises etc) I had to pretend to be from another unit, or they would hang up on me.

Ultimately I started withholding €100 from my rent each month. Landlord (via his lettings agent) didnt even seem to notice, and I eventually moved out because I'd just had enough

pinkypinky

I became a director of my mngt company a year after I moved. We've changed agent twice in the intervening 8 years and at this stage have a good system with about 90% compliance. The remaining 10% all owed money when we started in 2007 and it has increased over the years. We've obtained judgments against them all but a problem with that system is that if a person pays a bit or owes more, we have to re-do the judgement. One person on that list defaulted and we got all his fees when the place was sold by the bank. It's a very long game. We currently have someone else sale agreed who owes us a fortune. All that money will go back into the development - either as upgrades or the sinking fund.

I give my time free - I'm protecting my own investment, and I know that my building is run well and better maintained than when I moved in. If I were moving, I'd try not to buy in a development with this setup again because I know I'd want to be involved!

SarahMollie

Actually, just while there are some fellow directors on here - quick question.

I was appointed as a director at our last AGM about a month ago. I notices that in the "Directors Report and Financial Statement" document, there is a subsection entitles Transactions with Directors" where each appears to be paid a sum of money (few hundred each). I'm assuming this is some sort of compensation for time and effort, as most owners don't even turn up to the AGM, let alone volunteer to take on the work of being a director.

Is this normal? I've not asked about it yet in my own case, but it would be nice to have our work rewarded and I could use it to offset some of my own costs.

dubrov

SarahMollie wrote:

I was appointed as a director at our last AGM about a month ago. I notices that in the "Directors Report and Financial Statement" document, there is a subsection entitles Transactions with Directors" where each appears to be paid a sum of money (few hundred each). I'm assuming this is some sort of compensation for time and effort, as most owners don't even turn up to the AGM, let alone volunteer to take on the work of being a director.

That's not normal at all.

The managing agent should do pretty much all the legwork. The directors should only have to make the odd decision here and there.

A few hundred might be fair pay for the work but I'm surprised it got approved

SarahMollie

From what I can tell, the MA does do most of the leg work. We might have a few once off repair issues to decide on this year which might mean increased number of board meetings I suppose, but most day to day things are handled by the MA, and we just ran through the expenditure and approved it.

It was my first ever AGM so I suppose it didnt necessarily strike me as strange that the few people who bother to take part get compensated for their time. Mostly the attendees were outgoing members of the board, with 2/3 others. Total of about 10 people in the room, out of 85ish owners.

We've another meeting coming up next week so I'll ask the MA about it then. I agreed to join the board before I copped on about the payment, but happy to take it if its going and above board!

foxatron

In my development we get very few at the agm. I think we have 4 or 5 directors and they get their management fees covered as a token for the work involved. I figured this was pretty standard. In fairness to the directors they do seem to have the best interests of the complex at heart.

SarahMollie

So its maybe more unusual than just unheard of?

In our case, the amount might cover the maybe cover the majority of the fees for the house owners (they've smaller fees as they don't contribute to the block insurance costs or other costs that are specific to the apartments), and for apartment owners, its about half of their annual fees.

Once its all above board, and the sinking fund is also being contributed to, then I don't see the harm in rewarding the few that take an interest.

andekwarhola

I've been told (by our agent) of directors being remunerated or getting expenses before.

I might be wrong (as we've never done it ourselves) but I presume there's nothing to stop a board of directors remunerating temselves as long as it above board, declared and approved and so on.

dubrov wrote: »

The managing agent should do pretty much all the legwork. The directors should only have to make the odd decision here and there.

True but not the full story.

Depends on the development.

The hours spent checking tenders, meeting the agent and generally keeping an eye on stuff adds up. When we tendered for a new agent, we had to do all the research and interviews ourselves.

I myself have went into town twice this month (on my own time) to sign legal documents related to sales and other things.

We also took legal action against the developer which although conducted on our behalf, still required a fair bit of input.

Overall as well, it's a big responsibility and the residents know who you are so will approach you about stuff you don't really have much control over.

Personally though, I think it's a bad idea to award yourself any type of remuneration. Not because it's that wrong but it gives the wrong impression to other residents (who are as ever quick to complain and slow to help) and no development is ever so flush with money that you couldn't find a way to spend money on it.

athtrasna

Any contribution to the Directors would be unusual and something I would feel strongly against. Money should not be a motivation.

pinkypinky

The most I've ever gotten is a free lunch paid for by the managing agent! I'm amazed an AGM passed something like that. I'd definitely query it. Would that have to be declared as other income on a tax return?

SarahMollie

Those who've said they're against any remuneration to Directors - are you Directors yourselves or just ordinary members of your MC's?

I'll definitely be asking about it when we meet next Tuesday.

I'm a PAYE worker myself so would hope that I wouldn't have to file a separate tax return for such a nominal amount of money. Happy to pay tax on it though of course, as with any income.

athtrasna

SarahMollie wrote: »

Those who've said they're against any remuneration to Directors - are you Directors yourselves or just ordinary members of your MC's?

Director since 2005!

andekwarhola

Director also.

Paulw

SarahMollie wrote: »

Those who've said they're against any remuneration to Directors - are you Directors yourselves or just ordinary members of your MC's?

I'm a PAYE worker myself so would hope that I wouldn't have to file a separate tax return for such a nominal amount of money. Happy to pay tax on it though of course, as with any income.

I'm a director too, would be against it, and have never received a cent for the time and effort I put in to maintain our development.

Yes, it would be considered additional income, so you would have to declare it.

ted1

crooked_feet wrote: »

its hardly surprising that people question what they are getting , fees are in the majority of cases far too high , ive checked the past two years set of accounts for a development ive recently bought into , 1100 euro per anum for a development which doesnt even have a lift or electric gates ( mine is a ground floor two bed with a parking space )

claims of electricity costs having risen when energy costs have gone down , refuse charges which would be more expensive than in the wilds of leitrim

serious taking the proverbial and cosy arrangements between service providers and directors

Bins and insurance alone would be 600 euro if you are to pay them yourself

CollyFlower

Can owners get a list of the units who are not paying their management fees? If so who would you go to, to get the information, the MA or the MC?

athtrasna

CollyFlower wrote: »

Can owners get a list of the units who are not paying their management fees? If so who would you go to, to get the information, the MA or the MC?

Not according to data protection. We used to publish it with the accounts but got legal advice to stop doing so. I know of one development that does a thank you page with their accounts which lists all paying units. People had to opt in for that and by a process of elimination it was easy to tell who wasn't paying

blacklilly

Just on the publishing of details of non payers, this is not permitted as per Data Protection Act, additional to this, it is also not permitted to publish details of payers....both contravene data protection.

Interestingly, however I have heard recently of a Mgt Co, whom after having judgement mortgages registered against various non payers, they then published their details in the Stubbs Gazette (or similar) and subsequent to this, published their names at the AGM. The argument being, their details are already in public forum due to be published in Stubbs Gazette.