The Mega **Management Company** thread

faceman

Yep as the above posters have said, if it approved at the AGM then its you are obliged to pay.

People really underestimate the importance of their AGM's!!

The_Conductor

faceman wrote: »

Yep as the above posters have said, if it approved at the AGM then its you are obliged to pay.

People really underestimate the importance of their AGM's!!

Big time.

Next year make sure you attend the AGM.......

Yes- its a lot of money- but it must be paid.

dropper79

Hi,

First time using this site (or any forum of this kind!)
In a nutshell my problem is this:

I bought a ground floor apartment in Nov 2006.
The apartment was built in 2001, on a piece of land at the rear of a house. A second apartment was built on top at the same time - exactly like a two storey extension.

The person who lives in the house at the front built both of these apartments.
The neighbour beside this house/builder is complaining and sending solicitors letters to me and the owner of the apartment above me.

He claims that his roof and rear wall are being damaged by damp due to inadequate drainage caused by our apartments.
He wants me and the owner of the apartment above me to pay for this damage.

It seems I've inherited this problem with my apartment.
Am I responsible for this when I only bought the apartment in 2006 but they were built in 2001?

I'd appreciate any advice on this.

Hope I'm able to find this thread again as I get a little confused navigating the site

How Strange

I'd say this is a construction/building related issue. Do you have a management company to maintain the common areas? The drainage would be considered a common area and all correspondence from this person should be directed to the management company.

The only way to find the cause of the problem is to engage a building surveyor and get a survey carried out. This should really come under the remit of the management company.

If there is no MC, as it's only two apartments, then perhaps you and this other owner should consult a solicitor jointly. You could engage the surveyor yourselves, negotiate a fee for the survey and agree the remit but I would take legal advice first and not incur costs unnecessarily.

The surveyor would most likely say it's a construction related issue so the builder may be involved to rectify it.

First off though; find out the position in relation to a MC. Look up the contract you signed when you bought the property; there should be a reference there to an MC.

I'd suspect that the owner claiming damage due to damp has tried chasing the builder to rectify it, got nowhere and is now chancing his/her arm by pursuing you.

VPS

Thanks for your replies.

One of posts reads “If it was approved at the AGM, then it is valid and you are liable to pay it”

Does this mean that ANY charge approved by AGM Meeting is mandatory for all members?
Should approval be unanimous or just majority ?

What if member could not attend and vote due to illness?

What Regulator/Ombudsman controls this area?

Paulw

VPS wrote: »

One of posts reads “If it was approved at the AGM, then it is valid and you are liable to pay it”

Does this mean that ANY charge approved by AGM Meeting is mandatory for all members?
Should approval be unanimous or just majority ?

What if member could not attend and vote due to illness?

What Regulator/Ombudsman controls this area?

Yes, it is your right to attend the AGM and vote on any proposals put forward there. It's your own fault for not attending. Any proposal approved by the majority at an AGM is then mandatory for all members, which is why all members are invited to attend the AGM.

If you can't attend for any reason, you have the right to send a proxy to represent you, and vote in your stead.

When we send out our AGM invites, we always attach a notice of sending a proxy if you can't attend, and the proxy must have a signed form with your permission to represent you.

dropper79

Thanks for the reply!

You are spot on - as there are only 2 apartments (in effect like a double story extension) both myself and the owner of the apartment above me are the management company.
We have virtually no common areas - the actual building and the roof is about it.

You're right from previous conversations with this nuisance neighbour I think he has tried to pursue it with the builder (i.e. his neighbour) and has gotten no where.
So he is now chancing his arm with us!

I appreciate your advice and think you're right, consulting a solicitor would be a good first step as it might nip this thing in the bud without having to pay out for surveyors etc.

Many thanks for your help on this!

Eurorunner

10 year cover under Homebond/Premier Bond I would have thought....??

dropper79

Thanks Eurorunner -
The build was done by the owner of the main house - for some reason I doubt he registered with Homebond.
I was just looking at Ask About Money website and no one seems enthusiastic about the support they received from Homebond...

http://www.askaboutmoney.com/showthread.php?t=55662

but I will ask the solicitor about this!

josip

Our apartment block has had an owner who did not pay the annual maintenance fee for a number of years who is now probably going to sell and settle what they owe. Other owners have been effectively subsidising them for approx 8-9 years and the amount due back would be approx 800 euro per owner over that period. What is the correct/best way to distribute the proceeds? Options would appear to be:

1. Reduce the annual service charge over the next number of years by a few hundred each year. Disadvantages of this is that if a current subsidising owner sells up in that time, they won't benefit.

2. Give each owner they amount they effectively subsidised while they were owners. Where previous owners can be contacted, they should also be compensated accordingly. If previous owners can't be contacted, the balance goes into the Management Company's account

3. Divide the proceeds evenly among all apartment owners irrespective of how long they own the apartment. The basis for doing it this way is that when the apartment is being bought or sold the amount effectively "owed" to each apartment owner is an additional asset included in the sale.

I'd be interested in your thoughts.

Paulw

I would first wonder how you let someone not pay for so long?????

My view would be to actually use the extra money, rather than giving people money back.

Other than that, reducing fees would probably be the most logical.

I'd say the most popular would be for people to get money back.

mikewest

I am not an expert in this area but isn't there a fund that the management company is supposed to hold to cover major maintenence in the future e.g. lift replacement etc. Should this money not be put to that fund thereby protecting the long term interest of the property and not the short term interest of the current and past owners of apartments ?

Ste.phen

Refund this year's (and maybe last year's) share of the defaulter's money to all the other owners, and drop the rest into the sinking fund?

Has the advantages of increasing the sinking fund, and also giving people some money back, which they'd like I'm sure?

EKRIUQ

Eurorunner wrote: »

10 year cover under Homebond/Premier Bond I would have thought....??

the builder and the property has to has to be registered with Homebond/Premier Bond for this to be inplace

How Strange

OP, on foot of your reply re you and the other owner being the management company, the normal course of action would be for the management company to formally notify the developer/builder as it is most probably a construction related issue.

Again, consult a solicitor first.

How Strange

In my experience it doesn't really work like that - the owners aren't refunded money etc.

This money is owed to the MC therefore the MC has been operating at a loss for the duration of those outstanding fees considering that every cent of the budget is allocated against maintenance, repairs or a sinking fund. This old debt is already allowed for in the annual accounts under bad debts. Any associated fees including unrecoverable legal fees (as only a percentage can be recovered) will also have to be taken from this payment.

As the MC is governed by company law this means the money now recovered goes into the MC bank account and should be set against any overdraft balance and the remainder dealt with as the MC see fit but the most likely scenario is it will be transferred to the sinking fund.

Whether or not there will be a reduction in the management fees in subsequent years is another issue and one for the directors of the MC alone to decide. From professional experience I would find it very irregular to issue a reduction of the fees on the basis of this payment. It should be used to increase the sinking fund to cover contingencies in the future.

oscas

DaithiSurfer wrote: »

One thing i pay for in applewood that doesnt happen is window cleaning. I complained about this only to be told that yes they do clean the windows. They dont. My name is written in the dirt on the outside of the window for the last 2 years. They havent been cleaned at all.

Be careful, mgmt companies may only clean the actual glass of the window and not around it, so if you have you name written on the windowsill...also, they might only clean inaccessible windows, so if your windows, such as patio, balcony or other windows are somewhere you can get at yourself then you might have to do it yourself!

Victor

Give no money back. Its a bad precedent and I wonder if the Revenue would take the position that you are sharing a dividend (they might not take this position as they recognise management companies as mutual trading, not businesses, but they normally aren't dealing in refunds) and charge Dividend Withholding Tax / Income Tax.

josip wrote: »

1. Reduce the annual service charge over the next number of years by a few hundred each year.

Possibly keep the service charge at or about the current figure for a few years or apply only part of the inflation (you don't want a situation where they forget about inflation).

Disadvantages of this is that if a current subsidising owner sells up in that time, they won't benefit.

None of your business. The seller will be able to point to a well funded management company as a perk.

2. Give each owner they amount they effectively subsidised while they were owners.

No, a bad precedent and open to abuse and squabbling.

Where previous owners can be contacted, they should also be compensated accordingly. If previous owners can't be contacted, the balance goes into the Management Company's account

No, thes people have sold on their interst in the management company, whether good or bad. If you accidentally took too little money from past owners, can you see them paying up now?

3. Divide the proceeds evenly among all apartment owners irrespective of how long they own the apartment. The basis for doing it this way is that when the apartment is being bought or sold the amount effectively "owed" to each apartment owner is an additional asset included in the sale.

But in managment companies the shares / properties are often unequal, e.g. bigger properties pay higher fees - should the also get a bigger repayment?

Best solution is the sinking fund. Simplest to apply. Least administration cost. Most prudent. Least bad precedent.

The_Conductor

If you do anything other than pay the funds into a sinking fund, you have tax implications to consider. You could reduce sink fund allocations from annual charges for a year or two in reflection of the current injection of funds- but it would be very bad practice, and a bad deterioration of the funding position of the Management Company (and owners would assume that it was a sustainable course of action- which of course its not).

anotherlostie

You mention one concern that if someone sells over the coming years, then they would lose out. But surely if anyone has sold their apartment over the last 8-9 years while the rest of you were subsidising the defaulter, then they will have also lost out?

Putting it in the sinking fund, and then reducing the sink fund contribution for a couple (?) of years would seem the most sensible option, and maybe given the age of your block, some of the activities that the sink fund is there for could be progressed, if needed soon.

jetski

How Strange wrote: »

In my experience it doesn't really work like that - the owners aren't refunded money etc.

This money is owed to the MC therefore the MC has been operating at a loss for the duration of those outstanding fees

Did he not say the other owners have been effectively subsidising them for approx 8-9 years.... so the MC got what the were owed.

In the absence of any moral opinions id like to mention that you have no right to keep the money. it belongs to the residence and nobody else... youve a cheek if you do anything else but give it back. and the attitue in some of the replies is unbelievable.

"Its a bad precedent and I wonder if the Revenue would take the position that you are sharing a dividend

+

The seller will be able to point to a well funded management company as a perk."

are you serious?

No, a bad precedent and open to abuse and squabbling.

Whats are the MC's books for?

Victor

jetski wrote: »

In the absence of any moral opinions id like to mention that you have no right to keep the money. it belongs to the residence and nobody else... youve a cheek if you do anything else but give it back. and the attitue in some of the replies is unbelievable.

No, it is the MC's money, albeit the property owners are it's shareholders.

Whats are the MC's books for?

I'm not sure what you mean.

Victor

VPS wrote: »

Does this mean that ANY charge approved by AGM Meeting is mandatory for all members?

Essentially yes.

Should approval be unanimous or just majority ?

It would depend on the Articles of Association of the Company, but normally 50%

What if member could not attend and vote due to illness?

None of their business.

What Regulator/Ombudsman controls this area?

www.odce.ie

jetski

Victor wrote: »

No, it is the MC's money, albeit the property owners are it's shareholders.

The MC has been paid what it was due. how does it belong to anyone but the residence?



The account books

astrofool

The MC was due the original charge, not the residents.

The_Conductor

jetski wrote: »

The MC has been paid what it was due. how does it belong to anyone but the residence?

The account books

Jetski- would you like to elaborate? I have no idea what you mean.

Regarding the MC being paid what it was due- it quite simply was not. A Management Company, akin to any other company, operates through a current account, and has a sinking fund for those "rainy day" expenses. What probably happened is the company ran down their sink fund paying for everyday expenditure- and the one off lumpsum should be viewed as a one-off deposit to the sinking fund. Items such as painting units externally only occur every 6-7 years- its possible that it might be earmarked for an activity such as this- which would be ploughing the money back into the complex to the benefit of all owners and residents.

How Strange

jetski wrote: »

Did he not say the other owners have been effectively subsidising them for approx 8-9 years.... so the MC got what the were owed.

In the absence of any moral opinions id like to mention that you have no right to keep the money. it belongs to the residence and nobody else... youve a cheek if you do anything else but give it back. and the attitue in some of the replies is unbelievable.

"Its a bad precedent and I wonder if the Revenue would take the position that you are sharing a dividend

+

The seller will be able to point to a well funded management company as a perk."

are you serious?

No, a bad precedent and open to abuse and squabbling.

Whats are the MC's books for?

Jetski, I don't think you understand how a MC is run. It's governed by company law and the OWNERS not the residents are shareholders in the MC so therefore the individual owners per se were not owed the money over the last 8-9 years but the MC as a company was carrying the debt.

I think the suggestion that bad debts recovered should be returned to owners is setting a bad precedent in itself because it implies that such a thing is possible.

antoinolachtnai

This has to do with the difference between accounting on an accruals basis and on a cash basis.

The upshot of this is that the company now has some spare cash. It has to decide what to do with it. Honestly, the easiest thing to do would be to hang on to the cash. If it were me, I would put the cash in the sinking fund. If everyone is really desperate for money and just has to have it, I would simply not bother charging a management fee this year.

Paying out the cash could be interesting. It would effectively be a dividend as far as I can see. Paying dividends will be restricted by the memorandum and articles, but you would have to check. Tax implications too as mentioned. You can't just call it a refund.

At the time of the shortfall, an alternative strategy would have been for a resident or residents to loan money to the MC. This would make the situation different. But this isn't what you did.

faceman

VPS wrote: »

Thanks for your replies.

One of posts reads “If it was approved at the AGM, then it is valid and you are liable to pay it”

Does this mean that ANY charge approved by AGM Meeting is mandatory for all members?
Should approval be unanimous or just majority ?

What if member could not attend and vote due to illness?

What Regulator/Ombudsman controls this area?

You have to bear in mind that management companies are limited companies must follow company law. Management companies therefore act in a similar way that a business does.

SimpleSam06

Heh, and you would have thought it should be simple just to live in your own house. Council estates ftw!