Help: New Development with Mgt Company? (Newcastle,Co Dublin)

Tom_Walsh · 21-11-2020 6:27pm #1

Hi All,

Hoping someone can over me some guidance on this. We are currently thinking of buying in this new development from Pavement Homes in Newcastle, Co Dublin (saint Finians Way, Newcastle South). All the talks with the agent were going well but now we are being told that there is going to be a management company set up.

It's an 'exclusive' new development of just 18 homes - all 3 and 4 bed to my knowledge, no apartments. I am surprised to hear of a management company? I assumed new build estates would be maintained by the builder until taken in charge by the local county council?

I feel like it will be a lot of added stress now having an Owners management company and paying yearly charges/fees on top of our mortgage. In reality there are not a lot of common areas apart from a small green area/proposed playground.

It seems pointless and unnecessary setting up a mangement company for the 18 new home owners, registering a business, paying an accountant, potentially being a director, chasing management fees, attending meetings etc. Should the Builder not maintain the common areas until council take charge?

Any help/advice is greatly appreciated. Or if your buying in this development please let me know how you feel about this?

godtabh · 21-11-2020 6:29pm

It’s your issue not there’s. If you don’t want the hassle go else where.

SDCC are very pro active about taking in charge if built right. I’d question that

Caranica · 21-11-2020 6:57pm

Lots of house only developments have management companies, the days of Councils taking every development in charge or long gone. Even when they do take some elements in charge, they often don't take landscaping and car parks in charge so you would need a management company to administer those on a statutory basis.

Tom_Walsh · 21-11-2020 7:54pm

godtabh wrote: »

It’s your issue not there’s. If you don’t want the hassle go else where.

SDCC are very pro active about taking in charge if built right. I’d question that

I am well aware of this, I am just asking is this a common practice in the housing industry! Something we could push back on. No need to be so blunt! No point in commenting with the negativity!

Tom_Walsh · 21-11-2020 7:55pm

Caranica wrote: »

Lots of house only developments have management companies, the days of Councils taking every development in charge or long gone. Even when they do take some elements in charge, they often don't take landscaping and car parks in charge so you would need a management company to administer those on a statutory basis.

Thanks Caranica - good to know that it is more common than i thought. We are FTB so just assumed council would be looking after the upkeep. The additional cost of an OMC is just something we had not planned for so wanted some opinions to gain a better understanding. Thanks again!

Tom_Walsh · 21-11-2020 7:56pm

godtabh wrote: »

It’s your issue not there’s. If you don’t want the hassle go else where.

SDCC are very pro active about taking in charge if built right. I’d question that

It might be worth us reaching out to SDCC to see how many years it might take for them to take charge of the estate - what do you think?

DubLad69 · 21-11-2020 11:55pm

I would much rather a management company. I'm buying a house now that will be taken in charge by Kildare CoCo and am worried about the standard they will maintain it at.

At least with a management co you have some control

cronos · 22-11-2020 3:41am

I would suggest trying to use it as a group buying mechanism. Like group window cleaning etc... ours does that and it's useful... also ours covers bins...

dubrov · 22-11-2020 4:30am

If there is a management company being setup, I doubt that SDCC will ever take the public areas in charge.

It's fairly common in dublin now for new developments to have a management company.

It is a real negative for new build estates. Whatever the builder is telling you the fees are, they will likely be double that long term.

You'll need to weigh up if it is worth it to get a new build house. An older estate around the corner might have much more public space with no management fee

Tom_Walsh · 22-11-2020 10:22am

DubLad69 wrote: »

I would much rather a management company. I'm buying a house now that will be taken in charge by Kildare CoCo and am worried about the standard they will maintain it at.

At least with a management co you have some control

Fair point but with such a small estate (18 homes) you would not expect that much work is required for the builder to maintain before SDCC take charge. With a new estate your would expect roads, kerbs, footpaths etc to be good for at least 10+ years. So its literally cutting the grass. Thanks thought for the comment, seems like it's not as bas as i initially thought.

Tom_Walsh · 22-11-2020 10:22am

cronos wrote: »

I would suggest trying to use it as a group buying mechanism. Like group window cleaning etc... ours does that and it's useful... also ours covers bins...

Thats another good point/positive. Thanks

Tom_Walsh · 22-11-2020 10:25am

dubrov wrote: »

If there is a management company being setup, I doubt that SDCC will ever take the public areas in charge.

It's fairly common in dublin now for new developments to have a management company.

It is a real negative for new build estates. Whatever the builder is telling you the fees are, they will likely be double that long term.

You'll need to weigh up if it is worth it to get a new build house. An older estate around the corner might have much more public space with no management fee

This is it. I might check on some of the other new developments in Newcastle, Rathcoole to see if there is management fees. Did not realise it was common. Like you take a loan of say 300K or 1100 PM to buy a house for 350-380K. A Mgt Fee of 100e PM will be 12K Per annum or 32K over term of mortgage. So like you said maybe look at second hand now. Pros and cons to both, good point thank you! Obviously no HTB and A Rating so higher energy costs, the Joys!

Wildly Boaring · 22-11-2020 10:34am

In Meath a new estate
Builder cut grass for one year.
Looking like Meath will take over after 2 or 2.5.
They will not landscape.

We do not have a management company.
The residents have formed a management committee.
A company has been voted against by a considerable margin.

The committee have hired a guy to cut the grass.
It's coming in at 200 annually.
Will obviously have to contribute if upkeep outside Meath remit occurs.

Meath will be responsible for public lighting, sewers, drainage. That's about it as far as I can see.
A council taking in charge is not the big bonus it once was.

dubrov · 22-11-2020 11:27am

I assume they own the shared areas as well and will cover insurance. This is key as it means you don't need a management company then with all the associated administrative costs.

Your management fee would be likely 3 times higher without the council

Wildly Boaring · 22-11-2020 2:55pm

dubrov wrote: »

I assume they own the shares areas as well and will cover insurance. This is key as it means you don't need a management company then with all the associated administrative costs.

Your management fee would be likely 3 times higher without the council

Yes.
Got it one.
And they take a hammering for it unfortunately.
Plenty claims in recent years have paid out substantial sums for cuts and bruises on green areas

Tom_Walsh · 22-11-2020 10:03pm

Wildly Boaring wrote: »

In Meath a new estate
Builder cut grass for one year.
Looking like Meath will take over after 2 or 2.5.
They will not landscape.

We do not have a management company.
The residents have formed a management committee.
A company has been voted against by a considerable margin.

The committee have hired a guy to cut the grass.
It's coming in at 200 annually.
Will obviously have to contribute if upkeep outside Meath remit occurs.

Meath will be responsible for public lighting, sewers, drainage. That's about it as far as I can see.
A council taking in charge is not the big bonus it once was.

Yeah this situation seems ideal. No owners management company, just a committee. So you don't have to register a company, pay for insurance, pay an accountant etc. Just seem like stress that you don't want when buying your first home! Thanks for the post man!

Tom_Walsh · 22-11-2020 10:05pm

dubrov wrote: »

I assume they own the shared areas as well and will cover insurance. This is key as it means you don't need a management company then with all the associated administrative costs.

Your management fee would be likely 3 times higher without the council

Exactly. I know it is hard to tell but what would you estimate for a small 18 house development with only a small common green area. Looking at minimum 50e PM anyways ? Thanks

kippy · 22-11-2020 10:15pm

Management companies and all of the BS around them are the one of the many failures of housing policy in the past two decades, particularly when you:
1. Pay a housing tax.
2. The developer paid significant fees to the council on building etc.
The whole are is a disaster if you ask me and mainly because of the overhead costs.

In a previous estate, of 20 odd semi and terraced houses we would have paid about 600,per annum which covered minimal grass cutting, and feck all else, mostly admin, insurance and ESB for lights. External house maintenance to a point was covered but painting usually a bigger amount of money every five years. The place hadn't been taken in charge and the developer was long outta business.
Where we are now there's no management company as the council have taken the shared areas, lights etc in charge but we pay 150 or so a year into fund grass cutting, tree maintenance, flower planting etc on a much bigger scale than last estate with about 30 detached houses.
So I think a mix is a good option, council take in charge but residents manage most of the maintenance.
I know places with apartments and bigger mixed estates have much higher fees as well as bills with lifts, on site sewerage systems etc often having to be paid for by residents.

Anyway, if you are going in with your eyes open( you have been told there is a management fee/structue) don't assume it's a short term thing.

Tom_Walsh · 22-11-2020 11:18pm

kippy wrote: »

Management companies and all of the BS around them are the one of the many failures of housing policy in the past two decades, particularly when you:
1. Pay a housing tax.
2. The developer paid significant fees to the council on building etc.
The whole are is a disaster if you ask me and mainly because of the overhead costs.

In a previous estate, of 20 odd semi and terraced houses we would have paid about 600,per annum which covered minimal grass cutting, and feck all else, mostly admin, insurance and ESB for lights. External house maintenance to a point was covered but painting usually a bigger amount of money every five years. The place hadn't been taken in charge and the developer was long outta business.
Where we are now there's no management company as the council have taken the shared areas, lights etc in charge but we pay 150 or so a year into fund grass cutting, tree maintenance, flower planting etc on a much bigger scale than last estate with about 30 detached houses.
So I think a mix is a good option, council take in charge but residents manage most of the maintenance.
I know places with apartments and bigger mixed estates have much higher fees as well as bills with lifts, on site sewerage systems etc often having to be paid for by residents.

Anyway, if you are going in with your eyes open( you have been told there is a management fee/structue) don't assume it's a short term thing.

This is excellent help, many thanks for writing. I honestly think it will stop us from proceeding. As you mentioned above its just BS really. Your second house you ended up in sounds like the more ideal scenario. Paying app 600e Per annum for not much i'd imagine it will be! And i could end up being sucked into becoming a director as that's in my nature. Thanks again really insightful!

kippy · 22-11-2020 11:42pm

Tom_Walsh wrote: »

This is excellent help, many thanks for writing. I honestly think it will stop us from proceeding. As you mentioned above its just BS really. Your second house you ended up in sounds like the more ideal scenario. Paying app 600e Per annum for not much i'd imagine it will be! And i could end up being sucked into becoming a director as that's in my nature. Thanks again really insightful!

No problem.
I'd say that the biggest challenge is getting the council to take parts of the estate/the estate in charge. Often times there are things the builder has over looked or not fully completed that stop the council doing this.

The second estate is definetly the best case scenario but I do know a good few residents put in a lot of work to make sure the council took responsibility for the tricky parts. As I said, there's a LOT more shared area and a lot more landscaping than the old estate so the €150 that goes to the 2 person (voluntary) residents committe is well spent.
A lot of these issues are made worse/better by the people in the estate and what they can and will do to improve things for the entire estate.

The issue with the first estate was essentially no one knew or was able to do what was needed to get the council involved and the management agent (who definely had the wherwithall to assist) didn't have an encentive to do this.

Caranica · 23-11-2020 12:08am

Tom_Walsh wrote: »

Yeah this situation seems ideal. No owners management company, just a committee. So you don't have to register a company, pay for insurance, pay an accountant etc. Just seem like stress that you don't want when buying your first home! Thanks for the post man!

You're very wrong if you think that is ideal. A committee has no statutory basis, a management company does. You sign legal documents committing to pay management fees and they are 100% enforceable. Residents committee contributions are not.

Management fees for house only developments are rarely huge, a couple of hundred euro a year. Small price to pay to keep your development looking attractive and help keep property values up.

Wildly Boaring · 23-11-2020 12:13am

None of the companies I know of only are changing 200 quid. 3 or 4 times that

kippy · 23-11-2020 12:19am

Caranica wrote: »

You're very wrong if you think that is ideal. A committee has no statutory basis, a management company does. You sign legal documents committing to pay management fees and they are 100% enforceable. Residents committee contributions are not.

Management fees for house only developments are rarely huge, a couple of hundred euro a year. Small price to pay to keep your development looking attractive and help keep property values up.

I'm not aware of any management companies that keep their fees that low......
Not to say it isn't happenig out there but it's hard to see how.
The management agents fees on a regular year would go into a couple of grand, fairly easily.

Agree with you on the "ideal" scenario. However as I said, a lot of how easy these things are in practice are down to the people and the type of estate.

dubrov · 23-11-2020 12:56am

Caranica wrote: »

Management fees for house only developments are rarely huge, a couple of hundred euro a year. Small price to pay to keep your development looking attractive and help keep property values up.

I doubt there is a management fee in the country only costing 200 per year. Even if it delivered zero services, that sort of fee would be absorbed pretty quickly on the administrative side. Think annual report filings, audits, GDPR, dealing with members etc.

It is sad to see that councils have penny-pinched to save on costs for new developments even though their economy of scale could deliver the same thing for a fraction of the price.

irlrobins · 23-11-2020 3:09pm

Tom_Walsh wrote: »

This is it. I might check on some of the other new developments in Newcastle, Rathcoole to see if there is management fees. Did not realise it was common. Like you take a loan of say 300K or 1100 PM to buy a house for 350-380K. A Mgt Fee of 100e PM will be 12K Per annum or 32K over term of mortgage. So like you said maybe look at second hand now. Pros and cons to both, good point thank you! Obviously no HTB and A Rating so higher energy costs, the Joys!

Unlikely that your Management Fees are going to be anywhere near €100 a month. My house in an estate in Dublin is €600 for the year, but that includes all waste charges. If each house in your estate has their own bins, then you're prob talking €300-400 a year, maybe less.

Main expenses on the OMC would be

Electricity for public lighting
Landscaping
Insurance
Administration (accountants, etc)
Maintenance
Sinking fund contribution
Security/CCTV

The OMC could save money by not appointing a management agent and deal with contractors directly, but that assumes one or more owners are happy to take this on without compensation.

And as others pointed out, it's pretty much the norm to have an OMC in new developments, even if they are houses only.

Tom_Walsh · 23-11-2020 9:38pm

kippy wrote: »

No problem.
I'd say that the biggest challenge is getting the council to take parts of the estate/the estate in charge. Often times there are things the builder has over looked or not fully completed that stop the council doing this.

The second estate is definetly the best case scenario but I do know a good few residents put in a lot of work to make sure the council took responsibility for the tricky parts. As I said, there's a LOT more shared area and a lot more landscaping than the old estate so the €150 that goes to the 2 person (voluntary) residents committe is well spent.
A lot of these issues are made worse/better by the people in the estate and what they can and will do to improve things for the entire estate.

The issue with the first estate was essentially no one knew or was able to do what was needed to get the council involved and the management agent (who definely had the wherwithall to assist) didn't have an encentive to do this.

Thats the thing , you don't know what builder your getting. They might build you your house and as soon as last one is sold they are gone and never to be heard. OMC picks up the pieces for any works not completed to a high / safe standard.

100% agree it's going to help with the characters living in the estate and there willingness to help. I have no issues helping with a residents association but OMC just seems like different ball game. I know people are saying its the new norm but i know of multiple developments at the moment where builder is maintaining estate until council take over same. Think i'll look into those, thanks again

Tom_Walsh · 23-11-2020 9:43pm

Caranica wrote: »

You're very wrong if you think that is ideal. A committee has no statutory basis, a management company does. You sign legal documents committing to pay management fees and they are 100% enforceable. Residents committee contributions are not.

Management fees for house only developments are rarely huge, a couple of hundred euro a year. Small price to pay to keep your development looking attractive and help keep property values up.

I suppose the ideal scenario in my opinion is the builder maintains their work until council take charge. If your spending 370K on a house the last thing you want to do is start paying for the electricity on the street and the landscaping of the area - you've just spent your life savings and taking a massive mortgage for 35 years. Your taking on a big monthly repayment you dont want another 50-100e extra on top of that. Thats the way i feel anyways, I have no interest in chasing people people for management fees trying to enforce it. Couple of hundred a year seems way off too IMO when you think of the things that need to be covered - insurance, registering business name, accounting fees, electricity, maintenance, landscaping....potential road, kerb, footpath work down the line all between 18 households. I think more like 70-100 PM.

Tom_Walsh · 23-11-2020 9:44pm

Wildly Boaring wrote: »

None of the companies I know of only are changing 200 quid. 3 or 4 times that

^^^This , ive only ever heard of mgt fees being around 800-2K per annume

Tom_Walsh · 23-11-2020 9:44pm

irlrobins wrote: »

Unlikely that your Management Fees are going to be anywhere near €100 a month. My house in an estate in Dublin is €600 for the year, but that includes all waste charges. If each house in your estate has their own bins, then you're prob talking €300-400 a year, maybe less.

Main expenses on the OMC would be
Electricity for public lighting

Landscaping

Insurance

Administration (accountants, etc)

Maintenance

Sinking fund contribution

Security/CCTV

The OMC could save money by not appointing a management agent and deal with contractors directly, but that assumes one or more owners are happy to take this on without compensation.

And as others pointed out, it's pretty much the norm to have an OMC in new developments, even if they are houses only.

Very good and useful post thanks for sharing. Appreciate that

Graham · 23-11-2020 10:00pm

Tom_Walsh wrote: »

^^^This , ive only ever heard of mgt fees being around 800-2K per annume

That sounds more like apartment service charges that a house on an estate.

kippy · 23-11-2020 10:13pm

Graham wrote: »

That sounds more like apartment service charges that a house on an estate.

Same difference really. Last place I was in, very small estate 18 or 20 houses, very little greenery. 600 odd per year and had been going up.
Once you have an agent involved you are probably looking at a fee of no less than 2k per annum (which is roughly what our estate were paying)
Granted apartment blocks can be significantly lower cost per unit paid to agent but generally more costs for stuff like lifts, shared fire and security equipment etc.

Help: New Development with Mgt Company? (Newcastle,Co Dublin)

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