The Mega **Management Company** thread

RainyDay

Caribs wrote:

Due to the prehistoric state of the infrastructure we also have a waste treatment plant. The estate is only 3/4 years old but we just got a letter from the council stating that the treatment plant isnt in compliance with the discharge licence. As this would have been a condition of the original planning permission granted to the developer does the onus for the correction of this fall to the developer or the house owners. They are looking for €1k per house but they can swing for it as far as I'm concerned.

Very interesting & tricky case. The first step might be to contact the solicitor who purchased the property for you to see how he left you exposed to this. Ask what steps he took to protect your interests. Did you get a survey done at time of purchase, and did this highlight any risks?

You might also want to contact local councillors to help you engage with the council on this matter

McSpud wrote:

That sounds like standard practice. AFAIK the builders need to run the company initially (someone has to insure the buildings etc...) before handing over to Agent. They should then step down as Directors of the Mgt company & by law they supposed to appear at the AGM for that but don't hold your breath.

This is fine in theory, but is often exploited by developers. Often, the lease will contain a clause allowing the developers to run the management company until the last unit is sold. So if the developer decides not to sell the last 1 or 2 units, rent them out for himself, he can retain control of the management company for ever.

If you are ever buying a property in a managed development, work with your solicitor to get some time limit on the developer's control of the management company.

badbrian

McSpud wrote:

If your Management Company pays the wage bill they can give you a receipt for your portion which you can reclaim against tax.

Can you expand on this. I've never heard of tax relief on anything other for refuse collection.

McSpud

badbrian wrote:

Can you expand on this. I've never heard of tax relief on anything other for refuse collection.

Sorry, typo above. That should have been waste

MarinoMark

Quick Q..Who pays service charges if you are renting an apt ?

markpb

MarinoMark wrote:

Quick Q..Who pays service charges if you are renting an apt ?

The owner is ultimately (legally) responsible for paying but many pass those charges onto their tenants.

The_Conductor

MarinoMark wrote:

Quick Q..Who pays service charges if you are renting an apt ?

As its a tax deductable expense for the landlord, and ultimately the landlords responsibility to the Management Company- in most cases its the landlord who pays it. In some cases landlords seek a contribution from the tenants towards the fees (to reflect that portion of which they are unable to write off against tax) or in other cases they require the tenant to pay the entire sum (which isn't very fair in my opinion).

antoinolachtnai

Which part can a landlord not write off against tax?

The_Conductor

antoinolachtnai wrote:

Which part can a landlord not write off against tax?

Sorry Antoin, I was in a PM with a Landlord whose costs exceed his income.
Obviously most landlords should not be in that position. In that case the costs may not be fully tax deductable, as there is insufficient income on which to deduct the tax against. I got things muddled on this thread.

Victor

smccarrick wrote:

Sorry Antoin, I was in a PM with a Landlord whose costs exceed his income.
Obviously most landlords should not be in that position. In that case the costs may not be fully tax deductable, as there is insufficient income on which to deduct the tax against. I got things muddled on this thread.

Such lossses should be capable of being offset against similar income and/or future profit.

Also only the interest part of a mortgage repayment is an expense, not the capital repayment.

The_Conductor

Maybe I should clarify- its a 100% interest only mortgage on a property bought for the buy-to-let market 18 months ago. Outgoings have risen sharply as interest rates have gone up, however the landlord is only allowed an annual rent review, and even then the rent review must be in keeping with the area. Losses can be carried and offset over a 4 year period, but it looks extremely likely that even over this time frame the losses will not claimed against tax, as the income will be insufficient to cover them. The property is backed by a guarantee on the landlords principle residence, so the bank aren't worried, the landlord is though.......

Costs can be offset, but there is a time limit on the offsetting.

stringy

Just got my first bill, 1395 for 2 bed apt in North County Dublin. now I have a problem....

I have my own entrance on ground floor and do not use communal lobby or lift. Therefore should I have to pay the lift maintenance as part of my fee? Since I have no need to ever use it and it isnt connected to my apartment, should I be liable to be charged for this as part of my fee?

I have asked the mngmt co for a breakdown of my fee so I know exactly what I'm being charged for.

Just want to get opinions and see if anyone has experienced same.

markpb

Most management companies split the fees payable according to the type of apartment the owner has. Own door units (mine too) usually pay less because of there's no lift, cleaning services, fire alarms, etc. I'd be surprised if yours didn't but you'll just have to keep asking the company for a split.

Borzoi

stringy wrote:

I have asked the mngmt co for a breakdown of my fee so I know exactly what I'm being charged for.

Just want to get opinions and see if anyone has experienced same.

The proportion of the overall charge that's paid by each dwelling is usually set in stone long before anybody takes up residence. If you're not on a differnet rate now, you never will be.

TBH It sounds like though you have your own door, your apartment is still part of a block. By logical extension to your arguement - those on the higher floors in the block should pay more towards lift maintenance than those lower down:D

markpb

Borzoi wrote:

The proportion of the overall charge that's paid by each dwelling is usually set in stone long before anybody takes up residence. If you're not on a differnet rate now, you never will be.

That's not true for any estate I'm familiar with. Each year when the budget is drawn up, the costs of servicing the entire estate are divided among every unit. Then the other costs such as insurance and maintenance for each block are divided among the units in that block.

I'd be surprised if yours isn't the same and if it isn't, talk to the management company and board of directors to get it changed.

Victor

Are you also refusing to pay for roof repairs and will you accept all costs for foundation repairs?

markpb wrote:

That's not true for any estate I'm familiar with. Each year when the budget is drawn up, the costs of servicing the entire estate are divided among every unit. Then the other costs such as insurance and maintenance for each block are divided among the units in that block.

The formula will be set from the start, with the costs filled in every year.

Caribs

From some of the previous discussions and posts in our management company we are not happy with the directors as they are the developers also so at this years AGM some of the owner occupiers are going to put their names forward to be nominated as directors. A bloodless coup hopefully.

Are there any financial liabilities on directors should things go wrong or are they protected by limited liability etc - or like everything in this area is it more complex than a simple yes or no...

antoinolachtnai

It is a bit more complex than that, and you should read about the duties of a director on http://www.cro.ie/. Understand the issues, but go and get on with it, that's what I say.

RainyDay

Caribs wrote:

Are there any financial liabilities on directors should things go wrong or are they protected by limited liability etc - or like everything in this area is it more complex than a simple yes or no...

In a recent discussion on this over on Askaboutmoney.com, there was a reference to an insurance policy which would cover any potential financial risks arising from taking on a directorship. I presume there would still be other legal risks in worst-case scenarios that limited liability would not protect you against.

The suggestion was that the management company would agree to fund such insurance for all directors. Obviously, this would increase costs somewhat, but it is not an unreasonable cost to incur where the involvement of member directors is highly desireable. No-one bats at eyelid at insuring against public liability costs for management companies.

The_Conductor

RainyDay wrote:

In a recent discussion on this over on Askaboutmoney.com, there was a reference to an insurance policy which would cover any potential financial risks arising from taking on a directorship. I presume there would still be other legal risks in worst-case scenarios that limited liability would not protect you against.

The suggestion was that the management company would agree to fund such insurance for all directors. Obviously, this would increase costs somewhat, but it is not an unreasonable cost to incur where the involvement of member directors is highly desireable. No-one bats at eyelid at insuring against public liability costs for management companies.

The financial aspects are only one of the potential hazards of being a director. Disqualification or even jailing, are also potential problems, particularly when someone agrees to be a director of a company, but really does not know what their obligations as directors are. The CRO distributes a list of all currently banned people to government departments on a monthly basis (bans being for 3 years, 10 years or life). Depending on someone's perceived level of compliance or non-compliance with company law- that person could be personally bankruptted by the actions of a company.

I'm not trying to scare anyone- just simply telling you to explore carefully what your rights and obligations are before agreeing to become a director of a company.

Borzoi

Caribs wrote:

From some of the previous discussions and posts in our management company we are not happy with the directors as they are the developers also so at this years AGM some of the owner occupiers are going to put their names forward to be nominated as directors. A bloodless coup hopefully.

Are there any financial liabilities on directors should things go wrong or are they protected by limited liability etc - or like everything in this area is it more complex than a simple yes or no...

I would highly recommend directors insurance for a star, but as others have said you should check this out thoroughly.

Be aware that there may be no obligation on the current directors to stand down at the AGM, you may have to call an EGM which will require a vast majority of the owners actually caring.

Caribs

Thanks for the info guys. We are looking into the CRO site amongst others but wanted to get some pointers too. Insurance sounds interesting and probably a good route to go. Our articles of association provide for the requirement of the Directors to stand down at each AGM but this hasn't happened yet. We as residents are coming up against all sorts of messing from the developers who are trying to move away from anything to do with the development despite it only effectively being one third completed. As such there is all sorts of cloak and daggers moves between the current director/developer and the management agent so we feel we need to do something. Difficulty is that only about 50% of the houses are owner occupied so apathy is running quite high. Never a dull moment

The_Conductor

Caribs wrote:

Difficulty is that only about 50% of the houses are owner occupied so apathy is running quite high. Never a dull moment

The owner occuppier problem can't be under-estimated. Most landlords quite frankly don't give a damn about the development, as long as its reasonably clean and quiet and the management fee is kept as low as possible. They do not see the need or reason why money should be ploughed into the complex, both improving it for residents along with maintaining its necessary amenities. 50% owner occuppied isn't too bad to be quite honest- where I am at the moment its a development of 23 apartments and townhouses, and only 5 are owner occuppied (and 2 of those 5 are on the market at the moment).

What might be an idea is to form a residents association to run in parallel and alongside the management company. This would have the effect of people on the ground who are aware of the issues affecting the complex, having input into what goes on in the complex. Apathy could of course also be a problem there though

Caribs

smccarrick wrote:

The owner occuppier problem can't be under-estimated. Most landlords quite frankly don't give a damn about the development, as long as its reasonably clean and quiet and the management fee is kept as low as possible. They do not see the need or reason why money should be ploughed into the complex, both improving it for residents along with maintaining its necessary amenities.

The complex piece is is one of the main issues I have. The complex is only 10 houses, no town houses or apartments so the only common areas as such are the roads. Personally I feel we've been shafted by the planners, councils and govt allowing developers to back away from their responsibilities along with the councils leaving us to foot the bill. Our solicitor neglected to mention it was a private development when we purchased it so you can imagine my surprise when the first invite to the AGM came in.

RainyDay

Caribs wrote:

Personally I feel we've been shafted by the planners, councils and govt allowing developers to back away from their responsibilities along with the councils leaving us to foot the bill. Our solicitor neglected to mention it was a private development when we purchased it so you can imagine my surprise when the first invite to the AGM came in.

Sounds like you've been shafted more by your solicitor than by the planners/councils/govt!

antoinolachtnai

Caribs wrote:

smccarrick wrote:

The owner occuppier problem can't be under-estimated. Most landlords quite frankly don't give a damn about the development, as long as its reasonably clean and quiet and the management fee is kept as low as possible.

Surely these are the same things tenants want? I don't see what other amenities you are talking about.

The_Conductor

antoinolachtnai wrote:

Caribs wrote:

Surely these are the same things tenants want? I don't see what other amenities you are talking about.

Err clean windows, painting done a little more regularly, gutter cleaning, gardening on more than an emergency basis, a phone number of someone to call if there is antisocial behaviour which could include abondoned vehicles etc (other than the Gardai), etc- they're all pretty normal things- nothing too out of the ordinary.

jagem siaya

stringy wrote:

Just got my first bill, 1395 for 2 bed apt in North County Dublin. now I have a problem....

I have my own entrance on ground floor and do not use communal lobby or lift. Therefore should I have to pay the lift maintenance as part of my fee? Since I have no need to ever use it and it isnt connected to my apartment, should I be liable to be charged for this as part of my fee?

I have asked the mngmt co for a breakdown of my fee so I know exactly what I'm being charged for.

Just want to get opinions and see if anyone has experienced same.

I am in a similar situation whereby I am paying what I deem to be excessive service charge. Can anyone direct me to any firm that can work out what should be a reasonable service charge for my unit? I will provide all details of the apertment complex and I will be paying for this service.

jagem siaya

markpb

jagem siaya wrote:

I am in a similar situation whereby I am paying what I deem to be excessive service charge. Can anyone direct me to any firm that can work out what should be a reasonable service charge for my unit? I will provide all details of the apertment complex and I will be paying for this service.

The easiest way to do it is to contact the managing agent and ask for a copy of the current budget and breakdown of maintenance fees. If you want, you could ask your accountant to have a look at them.

The_Conductor

jagem siaya wrote:

I am in a similar situation whereby I am paying what I deem to be excessive service charge. Can anyone direct me to any firm that can work out what should be a reasonable service charge for my unit? I will provide all details of the apertment complex and I will be paying for this service.

jagem siaya

Guys- read the lease that you signed. The lease will specify the manner in which the management fees are calculated and apportioned. Unfortunately if you neglected to do this prior to buying the property- you are in a little bit of a pickle- there is nothing you can now do, you have a legal obligation to pay the fees.

FYI- 1395 for a 2 bed apartment seems pretty much parr for the course, possibly rising quite steeply over the next 2-3 years, as the new regulations governing the operations of management companies, and in particular their sink funds and financial liquidity, come into effect.

I don't mean to sound harsh- but you should have checked exactly what you were signing up for when you purchased the unit(s) in the first place.......
About the only thing you can now do is lobby your local politicians to try to have tax credits allowed for owner occuppiers (esp. as investors can write off the whole of the management charge against their rental income for tax purposes.......)

S.

markpb

smccarrick wrote:

FYI- 1395 for a 2 bed apartment seems pretty much parr for the course, possibly rising quite steeply over the next 2-3 years, as the new regulations governing the operations of management companies, and in particular their sink funds and financial liquidity, come into effect.

Do you have a link about this? I'd like to read more...