€200 levy not paid by management company

Milk & Honey · 06-10-2009 1:40pm #1

I have a long lease (500 years) on an apartment in a block. I discovered today that the management company has not paid the €200 levy due under the Local Government Charges Act 2009, and furthermore does not intend to, saying that it is a matter for the "owners". SInce the management company is recieving rent from me for the apartment it is the owner according to the act surely it should pay the levy.
I am also worried that when the apartment is sold the purchaser will want to see evidence that the levy has been paid or they will refuse to complete. What can I do to force the management company to pay up?

Femgem · 06-10-2009 1:47pm

Are you for real?? :eek:

The management company does not own the apartment, you do. Therefore you are liable for the tax, no question about it.

Paulw · 06-10-2009 1:49pm

Just curious of your view on the act - why would the management company have to pay?

According to the act, from my reading, the charge is on the "person" who owns the unit. Therefore the management company is not liable for the change.

I know the act is long and has lots of conditions, clauses, exemptions, etc, but I fail to see why the management company would be liable for the charge at all.

ZYX · 06-10-2009 1:55pm

Milk & Honey wrote: »

SInce the management company is recieving rent from me for the apartment it is the owner according to the act surely it should pay the levy.

You could try pushing this, but, as you feel the management company is the owner, and you are simply paying rent then expect the management to hugely increase the rent. After all if you are a tenant they are allowed to a yearly rent review and can charge the going market rate. Perhaps €20,000 a year would be fair?

Paulw · 06-10-2009 1:56pm

ZYX wrote: »

You could try pushing this, but, as you feel the management company is the owner, and you are simply paying rent then expect the management to hugely increase the rent.

Rent, per se, is fixed in the Lease Contract and is normally a nominal amount of €1 per annum. It can't be changed.

ZYX · 06-10-2009 1:59pm

Paulw wrote: »

Rent, per se, is fixed in the Lease Contract and is normally a nominal amount of €1 per annum. It can't be changed.

I know that, I was joking. It is just if he is pushing the point that he is a tenant then he has to expect all that goes with being a tenant.

Jo King · 06-10-2009 2:44pm

Paulw wrote: »

Just curious of your view on the act - why would the management company have to pay?

According to the act, from my reading, the charge is on the "person" who owns the unit. Therefore the management company is not liable for the change.

I know the act is long and has lots of conditions, clauses, exemptions, etc, but I fail to see why the management company would be liable for the charge at all.

LOCAL GOVERNMENT (CHARGES) ACT 2009

“owner” means, in relation to a residential property, a person (other
than a mortgagee not in possession) who, whether in that person’s
own right or as trustee or agent for any other person, is entitled to
receive the rent of the property or, where the property is not let,
would be so entitled if it were so let

The management company is renting the apartment. it is recieving rent therefore it is the owner. The o/p should write to the Directors of the management company and tell them he will bring an application under S371of the Companies Act to make the directors comply with their obligations under law.

Paulw · 06-10-2009 2:55pm

Ok, going out on a limb here, but if the Management Company is the owner, and the "owner" is only a tenant, and they are not resident and have the unit let out, then is both the management company and also the "owner" liable for the charges???

It would be interesting, but I'm going to assume here that the management company is not legally liable to pay this charge.

I know our management company hasn't paid it, for sure.

markpb · 06-10-2009 3:05pm

Paulw wrote: »

It would be interesting, but I'm going to assume here that the management company is not legally liable to pay this charge. I know our management company hasn't paid it, for sure.

I'm sure by the spirit of the law, no management company is intended to pay it and I'm fairly sure any judge will see it that way too. In any event, they could pay it and pass the charge back to the owner so I don't see why the OP cares - he'll pay it one way or another.

It's also worth noting that in many cases, the management company does not own the common areas - the developer still does.

Milk & Honey · 06-10-2009 3:42pm

markpb wrote: »

I'm sure by the spirit of the law, no management company is intended to pay it and I'm fairly sure any judge will see it that way too. In any event, they could pay it and pass the charge back to the owner so I don't see why the OP cares - he'll pay it one way or another.

It's also worth noting that in many cases, the management company does not own the common areas - the developer still does.

Why should the owner occupier of an apartment have to pay a charge when the owner occupier of a house does not, all because he is not allowed to buy out the freehold interest. The fact that a developer may have to pay in some cases is no help to owners. When the apartment is being sold the purchaser will want evidence of all charges being paid. Most purchasers will not be content with a statement like "a judge will see it this way". Look at the Mallon case. A judge saw it differently to many contributors to this site.

markpb · 06-10-2009 3:44pm

Milk & Honey wrote: »

Why should the owner occupier of an apartment have to pay a charge when the owner occupier of a house does not, all because he is not allowed to buy out the freehold interest.

Say hypothetically you are right and the management company has to pay the charge - where do you think the €200 is coming from? Your service change. So you'll end up paying it and probably more because the managing agents will charge extra for the extra admin work involved. What's your point here?

Milk & Honey · 06-10-2009 4:09pm

markpb wrote: »

Say hypothetically you are right and the management company has to pay the charge - where do you think the €200 is coming from? Your service change. So you'll end up paying it and probably more because the managing agents will charge extra for the extra admin work involved. What's your point here?

There are two points.
1. I have to pay a charge that a house owner who owns his fee simple does not have to pay. Surely that is unfair for a start.

2. If the management company do not pay it the charge increases by €20 a month until it is paid. There will also be conveyancing difficulties down the line until it is paid. The management company should surely pay the charge now and then try and get a refund if it is not supposed to pay it. Why should they risk all the problems non payment will bring?

Paulw · 06-10-2009 4:09pm

Milk & Honey wrote: »

Why should the owner occupier of an apartment have to pay a charge when the owner occupier of a house does not, all because he is not allowed to buy out the freehold interest. The fact that a developer may have to pay in some cases is no help to owners. When the apartment is being sold the purchaser will want evidence of all charges being paid. Most purchasers will not be content with a statement like "a judge will see it this way". Look at the Mallon case. A judge saw it differently to many contributors to this site.

Until a judge rules, I doubt any management company will pay.

If you are the owner occupier, and it is your primary residence, then you do not have to pay, since you are already paying a mortgage on the property. That is clear in the act.

According to the act -

“owner” means, in relation to a residential property, a person (other
than a mortgagee not in possession) who, whether in that person’s
own right or as trustee or agent for any other person, is entitled to
receive the rent of the property or, where the property is not let,
would be so entitled if it were so let;

So, if you're the mortgagee in possession, and living there, then you are not liable for the charge. The management company isn't a mortgagee.

D3PO · 06-10-2009 4:51pm

Femgem wrote: »

Are you for real?? :eek:

The management company does not own the apartment, you do. Therefore you are liable for the tax, no question about it.

no technically he doesnt own the apartment he owns a long lease on it.

Victor · 06-10-2009 4:54pm

If you have concerns, you should get legal advice or demand that your managemnt agent / company get advice.

https://www.nppr.ie/FAQ.aspx#faq20

I own an apartment/bedsit - am I liable for the charge?
Apartments and bedsits are liable for the charge. Unless one of the exemptions apply in your case (e.g it's your principal private residence), you will be liable for the charge.

Paulw · 06-10-2009 4:55pm

D3PO wrote: »

no technically he doesnt own the apartment he owns a long lease on it.

While, in general, you're correct, technically under this act, the management company isn't considered the "owner".

But, legally, you are totally correct. The management company own the apartment, and the "owner" just has a lease.

The_Conductor · 06-10-2009 7:34pm

On the bright side- its my understanding that the levy is a tax deductable expense

It only applies on second properties, and does not apply to your PPR- so if you're livng in your apartment- you're not liable (but if you own other property- it is).

Jo King · 06-10-2009 9:01pm

Paulw wrote: »

Until a judge rules, I doubt any management company will pay.

If you are the owner occupier, and it is your primary residence, then you do not have to pay, since you are already paying a mortgage on the property. That is clear in the act.

According to the act -

“owner” means, in relation to a residential property, a person (other
than a mortgagee not in possession) who, whether in that person’s
own right or as trustee or agent for any other person, is entitled to
receive the rent of the property or, where the property is not let,
would be so entitled if it were so let;

So, if you're the mortgagee in possession, and living there, then you are not liable for the charge. The management company isn't a mortgagee.

A mortgagee is the person or company who lends the money i.e a bank or building society. If they repossess someone they have to pay.
An apartment is let. The management company receives the rent even if it is €1.00 per annum!

€200 levy not paid by management company

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