Does €2520 seem excessive for management fees including a car parking space?

Sheeps · 27-11-2018 5:21pm #1

Looking in to purchasing an apartment in a block of 14, and management fees are €2520 for the coming year. The block has two lifts, one for residents, and a car lift to the basement carpark and bin area, which may contribute significantly to the cost.

Break down of the fees from last year are:

€750 on accounting fees, €300 on finance charges, €120 on bank charges,
€520 on legal fees, €569 on phones, €977 on fire maintenance, €4000 on repairs, €3975 on electricity, 3822 on insurance, €4171 on waste and cleaning, €6800 on agent fees, €306 on company constitution amendments, and €113 on sundries.

The common areas of the apartment had mould on the ceilings (granted its right beside a river) and the basement smelled of piss, so there has clearly been no cleaning or maintenance recently.

I'm really don't know what to think about the management fees, €7000 for agent fees seems way over the top. Does the break down of the management fees seem ridiculous or am I overreacting?

Sheeps · 27-11-2018 5:28pm

I should note, that this is the expenditure for the accounts for the management company, the company number for which also shows a registered business name for a Chinese Take away in North Dublin City. It's possible the management company is operating a Chinese takeaway and using the management of this building to subsides their costs?

satguy · 27-11-2018 5:29pm

2.5K seems very high, I would give this one a miss, who needs Piss and Mould every time you park the car.

lawred2 · 27-11-2018 5:30pm

Sheeps wrote: »

I should note, that this is the expenditure for the accounts for the management company, the company number for which also shows a registered business name for a Chinese Take away in North Dublin City. It's possible the management company is operating a Chinese takeaway and using the management of this building to subsides their costs?

Isn't the management company comprised of the residents themselves?

27-11-2018 5:31pm

If you do buy it on a 25 year mortgage at 2500 a year that's an extra 63000e on top

witchgirl26 · 27-11-2018 5:34pm

That seems a bit high. I lived in a block that had a lift to an underground carpark etc a few years ago and the fees were €1,800 a year and hadn't changed in about 5 years. I know people still living in the block and they're still the same price.

Also what's the phone charges? If it's agents phones then surely that should be covered in their fee.

Robbo · 27-11-2018 5:34pm

Sheeps wrote: »

I should note, that this is the expenditure for the accounts for the management company, the company number for which also shows a registered business name for a Chinese Take away in North Dublin City. It's possible the management company is operating a Chinese takeaway and using the management of this building to subsides their costs?

There's no connection between the numbers the CRO allocate to Business Names and those allocated to companies.

pinkypinky · 27-11-2018 5:37pm

Phone charges would relate to the legal requirement for phones in lifts but they seem a bit high.
Insurance seems low.
Is there a provision for adding to the sinking fund?

Otherwise fairly standard stuff but the figure per apartment, while seeming high, can't really be compared to other apartment buildings because each one is unique.

It might be a case that the agent could put things out to tender and get costs down.

TG860 · 27-11-2018 5:43pm

I wouldn't say the expenses in your breakdown look too excessive. I suppose the issue is the total cost is split between only 14 units.
Usually I would expect a complex with underground parking and lifts to be larger and have more than 14 units in the building, and thus a lower service charge per unit.

Sheeps · 27-11-2018 5:45pm

pinkypinky wrote: »

Phone charges would relate to the legal requirement for phones in lifts but they seem a bit high.
Insurance seems low.
Is there a provision for adding to the sinking fund?

Otherwise fairly standard stuff but the figure per apartment, while seeming high, can't really be compared to other apartment buildings because each one is unique.

It might be a case that the agent could put things out to tender and get costs down.

There is a provision for the sinking fund, is about €1400 a year by the looks of it. Phone works out at about €50 a month, which is a moderately priced mobile phone plan. They seem to be operating a surplus too.

Sheeps · 27-11-2018 5:45pm

Robbo wrote: »

There's no connection between the numbers the CRO allocate to Business Names and those allocated to companies.

Thanks, wasn't aware of this!

manonboard · 27-11-2018 5:50pm

Op, do you mean an actual lift that lifts your car from the basement to the ground street?
That sounds expensive.

I would agree with the others that its all a little expensive, but for 14 units.. thats a small number of units for such a expensive piece of infrastructure.

in my build (80 units). Building is well looked after.
1100 for 1 beds, 1600 for 2 beds, 2000 odd for larger 2 bed apartments.
The bigger your apartment, the bigger the fee. This was built into our contracts when purchasing.

we have 4 lifts. 1 goes to basement.
Thats 80 units to split the costs. 14 is a very small number.

pinkypinky · 27-11-2018 5:52pm

Sheeps wrote: »

There is a provision for the sinking fund, is about €1400 a year by the looks of it. Phone works out at about €50 a month, which is a moderately priced mobile phone plan. They seem to be operating a surplus too.

€1400 per unit a year? If so, that's very good.

Phones can be done for half that price (my building has 3 lifts and I'm a director).

Sheeps · 27-11-2018 6:17pm

manonboard wrote: »

Op, do you mean an actual lift that lifts your car from the basement to the ground street?
That sounds expensive.

I would agree with the others that its all a little expensive, but for 14 units.. thats a small number of units for such a expensive piece of infrastructure.

in my build (80 units). Building is well looked after.
1100 for 1 beds, 1600 for 2 beds, 2000 odd for larger 2 bed apartments.
The bigger your apartment, the bigger the fee. This was built into our contracts when purchasing.

we have 4 lifts. 1 goes to basement.
Thats 80 units to split the costs. 14 is a very small number.

Yeah, it's a 3 tonne car lift. It's 14 apartments, and 13 debtors, so someone must not be paying. I think the car space might not actually be owned as part of the apartment, but rented, so I could probably sub-let this out (quite close to town) or just not take it, which could offset the cost of the management fee.

Sheeps · 27-11-2018 6:22pm

pinkypinky wrote: »

€1400 per unit a year? If so, that's very good.

Phones can be done for half that price (my building has 3 lifts and I'm a director).

That's €1400 total for the block. It would appear that the sinking fund was only started this year.

I should also add, that when I sent off to the management company for their accounts, the document referenced a completely different block of apartments. The agent assured me this was an error and that it was the correct financial statement for the block I'm interested in purchasing in.

Muahahaha · 27-11-2018 7:36pm

Sheeps wrote: »

Yeah, it's a 3 tonne car lift. It's 14 apartments, and 13 debtors, so someone must not be paying. I think the car space might not actually be owned as part of the apartment, but rented, so I could probably sub-let this out (quite close to town) or just not take it, which could offset the cost of the management fee.

Sounds like an expensive piece of equipment and is likely the reason for the high mgmt charges, that and because it is only a 14 unit development.

re- car park space- who is it owned by? Often apartments were sold with a car park space included but nowadays when people sell the apartment onwards they are carving it out and selling the space separately or else renting it out themselves.

Toots · 27-11-2018 7:39pm

The €4000 on repairs, is this to include lift maintenance or was that repairs for something that went wrong with the block?

Sheeps · 27-11-2018 9:01pm

Toots wrote: »

The €4000 on repairs, is this to include lift maintenance or was that repairs for something that went wrong with the block?

I'm not actually sure, in 2018s report it mentions three different types of repair from structural, electrical and car lift maintenance, so would probably need to enquire and do due dilligance on the building. I havent gone sale agreed yet, or involved a sourveyer yet, but I'm leaning towards backing away from my offer based on the evidence I've obtained since I made it.

the_syco · 27-11-2018 10:26pm

To confirm;

Sheeps wrote: »

The agent assured me this was an error and that it was the correct financial statement for the block I'm interested in purchasing in.

The agent gave you the wrong financial statement for the block

Sheeps wrote: »

The common areas of the apartment had mould on the ceilings (granted its right beside a river) and the basement smelled of piss, so there has clearly been no cleaning or maintenance recently.

Sometimes you have to judge the place on gut instinct. But if you can clearly see that it's gone to hell, and no-one is even trying to maintain it?

I'd say either run away, or have a local surveyor give you the low down on the apartment, and anything else that they can see.

=-=

Is the lift the only way that the cars can get out? How close to the river is it? Has the area nearby you flooded? Are the apartments built on a flood plain (all the rage back in the 90's)?

Caranica · 27-11-2018 10:36pm

Recommendation in MUD was sinking fund of €200 per unit per year so they're only saving half of that, seems nowhere near enough with two lifts. Also the management agent charging 7k seems excessive. Ours charges 11k for 81 units.

Lantus · 27-11-2018 10:56pm

Sheeps wrote:

â‚¬750 on accounting fees, â‚¬300 on finance charges, â‚¬120 on bank charges, â‚¬520 on legal fees, â‚¬569 on phones, â‚¬977 on fire maintenance, â‚¬4000 on repairs, â‚¬3975 on electricity, 3822 on insurance, â‚¬4171 on waste and cleaning, â‚¬6800 on agent fees, â‚¬306 on company constitution amendments, and â‚¬113 on sundries.

Finance charge? On a loan? 569 on lift phone seems a little steep. 4k on power? The car lift presumably is the consumer. Agent fees seem OK.

The issue is only 14 units. Low economy of scale. Any non payment would be crippling.

L1011 · 27-11-2018 11:02pm

Caranica wrote: »

Recommendation in MUD was sinking fund of €200 per unit per year so they're only saving half of that, seems nowhere near enough with two lifts. Also the management agent charging 7k seems excessive. Ours charges 11k for 81 units.

Three lifts, one of which is vastly more complicated than the others.

Is there a way to get cars out should the car lift fail? I would not want to park an even vaguely valuable or urgently required car someone with a single car lift and no real cash to replace/repair it.

Victor · 27-11-2018 11:11pm

Sheeps wrote: »

I should note, that this is the expenditure for the accounts for the management company, the company number for which also shows a registered business name for a Chinese Take away in North Dublin City. It's possible the management company is operating a Chinese takeaway and using the management of this building to subsides their costs?

Check if it is a registered business number, not a company number - tick "Business Name" here: https://search.cro.ie/company/CompanySearch.aspx

ouxbbkqtswdfaw · 27-11-2018 11:25pm

Sheeps wrote: »

I'm not actually sure, in 2018s report it mentions three different types of repair from structural, electrical and car lift maintenance, so would probably need to enquire and do due dilligance on the building. I havent gone sale agreed yet, or involved a sourveyer yet, but I'm leaning towards backing away from my offer based on the evidence I've obtained since I made it.

Is it too late to buy a house?

Sheeps · 28-11-2018 8:27pm

I actually put an offer on it for about 20% under asking and it was rejected. The asking was 285, but decided not to pursue with another higher offer based on feedback from this thread, so thanks everyone! Think I may have dodged a bullet there.

4ensic15 · 28-11-2018 10:15pm

lawred2 wrote: »

Isn't the management company comprised of the residents themselves?

No. A company is a distinct legal entity from its shareholders.

happyfriday74 · 29-11-2018 11:06am

Recommendation in MUD was sinking fund of €200 per unit per year so they're only saving half of that, seems nowhere near enough with two lifts. Also the management agent charging 7k seems excessive. Ours charges 11k for 81 units.

The 200 per unit is absolute minimum and its often not suitable for the block. as every building is constructed different. Sinking fund is best based on a repair and maintenance report carried out by a building surveyor. It will pump out a 20-25 years view of repair costs and give an aggregate annual figure to keep up with them

Two lifts broken down between 14 units is also a big bill to swallow.

Agents fee not unusual. Most will charge a minimum fee as no matter how many units in the block they still need a licensed property manager to go to 4 annual late night directors meetings , deal with issues by email and phone, inspect the site throughout the year, get the accounts filed and prep the budget. Its a business at the end of the day.

You might get a lads coming in on a sub 5k who will put a admin on the job instead of a licensed PM but you find they will be taking cream off the top from the service providers- they will be making a loss otherwise.

Graniteville · 29-11-2018 11:20am

Sheeps wrote: »

I should note, that this is the expenditure for the accounts for the management company, the company number for which also shows a registered business name for a Chinese Take away in North Dublin City. It's possible the management company is operating a Chinese takeaway and using the management of this building to subsides their costs?

My company's registered office is my accountants office. Many of his clients use his address too and his clients are quite varied to say the least.

The most important figures I'd be checking is

1. The amount currently in the sinking fund. (this is what paying for major maintenance works)

2. The amount currently owed by other apartment owners. (debtors)

The figures in the 1st post are there or thereabouts.

happyfriday74 · 29-11-2018 11:54am

I should note, that this is the expenditure for the accounts for the management company, the company number for which also shows a registered business name for a Chinese Take away in North Dublin City.

Could well be one of the directors is acting as company Secretary for the omc and also happens to have his own takeaway business.

Would be too concerned.

Does €2520 seem excessive for management fees including a car parking space?

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