Maintenance fee

markpb

This is probably going to be an unpopular post but I'm going to ask it anyway

I'm on the board of directors for a large, managed estate in Dublin. We have quite a few people living in the estate who either won't pay their maintenance fee or won't/can't pay all of it. The shortfall each year is pretty high and it's impacting how the estate is run so my question is, does anyone else here have the same problem and how do you deal with them?

kholly

In north county dublin aswell, and you get an invoice, another chance to pay and if you dont pay you then get an court order to pay......

ixoy

What do you provide for your maintenance fee and do you, in principle, think it's good value?

Borzoi

markpb wrote: »

I'm on the board of directors for a large, managed estate in Dublin. We have quite a few people living in the estate who either won't pay their maintenance fee or won't/can't pay all of it.

Doesn't matter what their circumstances, they're legally obliged to.

We do a reminder, after about a month, then start charging interest, and another reminder. Keep reminding for about 12 months, all the time charging interest, then use the solicititors - and the cost of the legal is added to the billS :eek:

The_Conductor

Hand the whole lot over to a solicitor and anyone who does not pay gets an interest bearing legal mortgage registered on their property which must be satisfied before they are ever able to sell. Harsh, but necessary.

markpb

ixoy wrote: »

What do you provide for your maintenance fee and do you, in principle, think it's good value?

Managing agent (subcontracted), insurance, landscaping, security, common lighting, common janitorial services, etc. Probably nothing more or less than any other large managed estate. It varies between €1400 and €1800 depending on the type of apartment which is expensive but not excessive compared to other estates nearby. I think the area is reasonably well run (but then again I would right? )

My understanding is that our MA has already handed several cases to the court for processing but it takes month, if not years and any missed payments while the court case is taking effect are not included in the ruling so the whole process starts over again. Is he right, does it actually take that long?

How Strange

markpb, send a letter around to each owner with a current statement saying that if payment is not received soon you will begin legal proceedings and all costs incurred will be added to their accounts. Give them 14 days to pay.

Send another statement 14 days later. Make sure you have all the owners up to date addresses etc.

Then check the lease agreements and see if there is a clause which says you can add interest to overdue accounts. If there is add the interest. Why? Because the management company will have to take a hit on legal fees so charging interest (if allowed) enables you to recoup some of those costs. DONT apply interest if there is no provision in the lease as it may undermine the court cases and could get some of them thrown out which will incur even more legal fees.

If you can apply interest, do so from 30 days after the date of the service charge invoice. Then send out the new statement to each owner. Explain that it is in agreement with the lease so it is completely legal and will remain on their account and will be pursued along with service charge through the court. Give them 14 days to pay.

Next, get a good firm of solicitors who deal with debt collection. Negotiate a good rate for their services - €10 ex vat for a legal letter is very reasonable. Then give them all the overdue owners names and ask them to issue legal letters. Some owners will pay on receipt of the owners letters others will stick it out and try to call your bluff.

At this stage you should be able to start legal proceedings. It will take a few months but I guarantee you that within six months your debts will be down dramatically.

Re charging legal fees - the cost of the legal letters can be added to the owners account and a portion of the legal fees. Your solicitor can work this out for you.

Don't wait too long to go to court as it does take a few months to get through the process. You are entitled to send a legal letter after three statements have been sent out. At that point hand it over to the solicitors as any mistakes made at that point could stall some proceedings.

Also, put a hold on people's accounts until they pay so if they need an indemnity letter to remortgage tell them no, not until your fees are paid. If they want a letter for the solicitor or a solicitor rings to act on their behalf because they are selling then refuse any information until the account is cleared OR you at least have an undertaking with a date of payment from the solicitor (this is legally binding).

How Strange

markpb, it shouldn't take years. In extreme cases it might take a year because if the owner shows a reasonable effort to pay the debt then the judge may give him/her time to do that.

PM me if you want any more info. I've some experience in this area so would be glad to answer you're questions.

MysticalSoul

In the complex I reside in, the Management Company offer the option of paying quarterly by direct debit. Perhaps you could make this mandatory for the guilty parties. If they are owner occupier residences, they signed a Contract when they bought the place to say they would pay such services I presume..., so in essence, are legally obliged to pay, as a service is being paid for. In the complex I am in, this covers buildings insurance and refuse as well as what you have already listed above.

markpb

Cheers for all the replies. I had a chat with our MA yesterday to try to compare what we're doing at the moment to what you all said. It sounds like we're doing things by the book but it's still very slow. Apparently their records aren't very accurate so finding contact details for owners living outside the estate is hard and this is slowing up the debt collection solicitors. There was also some messing about by a previous MA (in the same company) where cases were dropped against people because they promised to start paying. Those people still aren't paying and now owe huge amounts.

We do charge interest and debt collection fees to owners so we're not losing money over all of this but it's still very frustrating.

How Strange

markpb, if you don't have up-to-date info for owners you can engage an enquiry agent (sounds very Hollywood) though your solicitor. They would do a search in the area of the last known address and might call around to the apt to get some details off tenants.

Also, tell the MA to put a hold on all these accounts so they get no service i.e. if tenant rings up looking for a new fob for access, say they can't get anything until the landlord gets in contact personally. This is very effective and over a few months you would catch alot of them.

Ask MA to find a new solicitor or find one yourselves as the management company. You want a firm that specialise in debt collection as they have the resources to progress things alot quicker.

Tell the MA that they must take instructions from the MC regards debt collection so have a bi-monthly debt collection meeting and discuss the status of each apt, who has gone to court etc etc. Tell them that they don't have the authority to stop a court case based on promises without your consent. Also, if an owner promises to pay insist on postdated cheques in advance. Stipulate this as part of the agreement, leave the case open and if a cheque bounces then it goes back to court.

All correspondence must be in writing so if an owner rings up and gives an undertaking to pay then the MA follows that up with a letter confirming the conversation and outlining the steps agreed. Set a date for the next step and if the owner fails to do this then its back to court.

IMO, alot of MA's see this as the least attractive part of the job and as most have third level qualifications they don't want to be glorified credit controllers. If the MC's take control of it and drive it then debts will be reduced significantly and finances turned around in about six months.
Essentially, you have to be ruthless and not be taken in by people's sob stories of 'its difficult to pay the mortgage and I've got lots of other bills' blah blah. Its part and parcel of living in apts - they use the lifts, use the bins etc so they have to pay for them.

Also, it is very worthwhile to consider scheduled payment dates throughout the year - usually quarterly and bi-annually but also monthly. Owners set up standing orders and the MC are guaranteed receipt of funds. This also reduces the likelihood of debts. In reality, it is hard for people to juggle all their bills so agreed scheduled payments suit everyone.

KingKenny7

Isnt all that just a farce. house prices are expensive enough and having to pay for non exsistant services at another 1500 on top of you already 1500 a month mortgage is just ropbbery. I for one, will refuse point blankly upon paying for any service like that.

If I do, I would like to see books, receipts bank details the whole lot before I would trust my money to a management company. People buy a home in this country to live in and then they must pay extra to live there coz its an estate. Pure robbery if you ask me.

Ste.phen

You do realise he just listed all the things the fees pay for, right?

BC

KingKenny7 wrote: »

Isnt all that just a farce. house prices are expensive enough and having to pay for non exsistant services at another 1500 on top of you already 1500 a month mortgage is just ropbbery. I for one, will refuse point blankly upon paying for any service like that.

If I do, I would like to see books, receipts bank details the whole lot before I would trust my money to a management company. People buy a home in this country to live in and then they must pay extra to live there coz its an estate. Pure robbery if you ask me.

Depends on the management company. The charges usually cover bins, upkeep of communal areas such as corridors & stairwells in apartment blocks(hoovering, lightbulbs, window cleaning etc) , car parks It also covers block insurance, maintenance of electronic gates, lifts etc if applicable. And there is supposed to be money put aside for things that might go wrong in the future, e.g in 10 years the gates might need to be replaced. I have no problem with management companies as long as they are run well and are clear about the costs and not ripping people off.

A lot of people don't pay because they don't see any benefits and don't know where the money is going.

How Strange

KingKenny7... Isnt all that just a farce. house prices are expensive enough and having to pay for non exsistant services at another 1500 on top of you already 1500 a month mortgage is just ropbbery. I for one, will refuse point blankly upon paying for any service like that.

If I do, I would like to see books, receipts bank details the whole lot before I would trust my money to a management company. People buy a home in this country to live in and then they must pay extra to live there coz its an estate. Pure robbery if you ask me.

Service like what KingKenny7? What extortionate nonexistant services are you talking about. IMO, its this type of attitude that goes to prove that Irish people are at least a decade away from being able to do apartment living.

And its because of attitudes like this that Markpb is saying their management company is out of money and has to sue owners to pay for services they or their tenants receive.

It's a simple equation, services (bins, lighting, lifts, insurance, cleaning) costs money, no money no services. What is really unfair is the poor abiding owners who do pay their charges and then have to watch the moaning freeloaders avail of the same services while going on about 'how its all robbery'. Then the management company runs out of money, services are cut and again its the freeloaders who do the moaning.

But, I have to say, its a great satisfaction when eventually the freeloaders do have to pay (tens of thousands in some cases because they hadn't paid for years) AND slap the interest AND legal fees on.
The abiding, fee paying owners love to hear those stories too.

FYI, Markpb, some management companies print lists of offending apartment numbers and distribute them at the AGM. You can't print names because of data protection but apartments numbers can be named. Also, at AGM's give each attending member a card. Green means you can voice your opinions, objections etc (green because they paid) and red means shut up. Then if they try to say anything, the other members know he/she is a freeloader. Some management companies do this and it works quite effectively.

The_Conductor

KingKenny7- you are paying for a long term lease on the property- not outright possesion. If you fail to adhere to the terms of the lease, which will invariably include a stipulation that you have to pay the Management Charge- you will be in breach of your lease, and the Management Company has three options- 1) Sell your debt to a collection agency, 2) Take out a legal mortgage on your property to include the cumulative management charges and any costs incurred as a result of your refusal to pay- which would have to be satisfied before title for your property could change hands, or 3) Invoke the terms of the lease and evict you- selling your lease at auction to the highest bidder- the balance of the proceeds to be returned to you once the Management Company have satisfied their outstanding amounts due.

If you do not want to pay Management Charges- do not purchase a lease on a property in a development which has management charges- plain and simple. You cannot purchase the lease, plead ignorance and presume that you'll get away with it.

S.

markpb

How Strange wrote: »

Owners set up standing orders and the MC are guaranteed receipt of funds. This also reduces the likelihood of debts. In reality, it is hard for people to juggle all their bills so agreed scheduled payments suit everyone.

This is going to sound like I'm bitching about our MA when in fact, I'm usually delighted with his work.

Before I joined the board (while the MC was still run by the developers), I asked the MA if I could pay by standing order. They offer the choice of paying by cheque, including post-dated, or by quarterly direct debit. I wanted to pay monthly by SO but I was told it wasn't an option because it was a security risk giving out the bank account details. Then I asked if it was possible to switch to a monthly DD but was told the bank won't allow it. He said he's going to talk to their accounts department to see why that is.

Does that make sense to anyone else? I could see a huge advantage in letting people pay their bills in a way they organise for themselves.

Paulw

One option, if they are not paying their fees, then you can see about removing them from the insurance policy. This would force the insurance company to write to their bank and if their building is removed from the insurance. Banks tend not to like that. You'll find payment comes very quick after that. That tends to work for apartments, not sure about estates, but there's bound to be similar ways.

KingKenny7

smccarrick wrote: »

If you do not want to pay Management Charges- do not purchase a lease on a property in a development which has management charges- plain and simple. You cannot purchase the lease, plead ignorance and presume that you'll get away with it.

S.

When I do buy my own property I dont entend to pay x amount of hundreds of thousands for a lease. The property will be mine.

Secondly how many new properties dont ahev management companies attached. Shouldnt it be, that I should have the right to purchase a property without having management fees inflicted on me at ripping off rates??
What happens if I cant afford to pay it?? What happens if I get rid of my own rubbish, live on the bottom floor, what happens if you pay and you get nothing in return, what happens then? Why dont the builders give the land to the county council once all houses/appartments are sold, surely we pay taxes for that aswell. To me its another way of ripping of hard working people.

markpb

KingKenny7 wrote: »

When I do buy my own property I dont entend to pay x amount of hundreds of thousands for a lease. The property will be mine.

As it happens, I totally agree with you. I think having a management company is extortion and (economic) laziness on the part of the councils but the fact is that's the way we've ended up and there's no easy way out of it.

If it's a normal estate (ie houses + road + grass), the council can consider taking it in charge. If it's an estate with apartments or an apartment block, they won't take it in charge because someone has to own the common areas (building structure) and that means a management company. If they own them, they have to be maintained and insured which means a management fee.

The_Conductor

KingKenny7 wrote: »

When I do buy my own property I dont entend to pay x amount of hundreds of thousands for a lease. The property will be mine.

Secondly how many new properties dont ahev management companies attached. Shouldnt it be, that I should have the right to purchase a property without having management fees inflicted on me at ripping off rates??
What happens if I cant afford to pay it?? What happens if I get rid of my own rubbish, live on the bottom floor, what happens if you pay and you get nothing in return, what happens then? Why dont the builders give the land to the county council once all houses/appartments are sold, surely we pay taxes for that aswell. To me its another way of ripping of hard working people.

I'm not arguing with you- I agree with you. Management Charges are unfair- particularly when you can buy a house down the road outright, and have the council do everything for you. It is a form of double taxation- we are all paying tax- why should some people get additional services from their councils when others don't/can't. Further- of the units in these developments- those that are let out by landlords to tenants can have the Management Charge removed as a deductable charge from their rental income prior to determination of their tax (if any), tenants can even deduct it- if they have to pay it, but owner occupiers cannot.

I have brought this up with Shane Ross who has agreed to table a motion on it in the Seanad when the bill on Management Companies is tabled. Other people should contact their local representatives and similarly make them aware of their unhappiness with the whole scheme.

The point I was making is that- while Managment Fees are unfair- that if you sign up to them, you can't simply plead ignorance when the time comes to pay them, you have a legal obligation to pay them, and the Management Company has the legal means to ensure that it does manage to extract its pound of flesh.

Seriously- meet with your local politicians and make sure they are well aware of your feelings- take pro-active steps to try to address the problem, instead of the reactive step of ignoring the bill when it comes in the letterbox.

Shane

How Strange

markpb..I wanted to pay monthly by SO but I was told it wasn't an option because it was a security risk giving out the bank account details. Then I asked if it was possible to switch to a monthly DD but was told the bank won't allow it. He said he's going to talk to their accounts department to see why that is.Does that make sense to anyone else? I could see a huge advantage in letting people pay their bills in a way they organise for themselves.

Markpb, its pure bullsh*t. Bottom line, they don't want the added admin hassle that goes along with it. The MC employs the MA so they cannot turn around to you and say 'we can't do it'. Fair enough, if you are being totally unreasonable in your demands but the MA is looking for an easy time on that one. That's what you pay your fee to them for - debt collection and accounts work is included.
I completely agree, if MA's/MC's are unreasonable with staggered payments the bad debts have to be expected.

BTW, you can't pay by DD because you only do that with utilities. You set up a SO.

KingKenny7, no-one is going to disagree with you about paying service charges on housing estates. That's complete inaction and laziness on the part of the local authorities and the government and hopefully this situation will change in the near future. But if you live in an apartment block you will always have to pay service charges.

smmccarrick is right (IMHO, he seems to be a bit of an expert in this area). When you buy an apt you own the leasehold over x number of years so you don't own it outright. If you don't like it buy a house in an estate managed by a local authority.

If you want to see what would happen if a local authority managed an apartment block go to Ballymun. See how many lifts work in the towers, what the landscaping is like, if all the lighting is working etc.

Victor

KingKenny7, your posts are a bit off-topic for this thread, but feel free to start another thread.