Management Company Issue

Kidchameleon

Hi All,

This could be long but id really appriceate your help on this, im at my wits end and highly stressed, loosing sleep....

I own an apartment in Kildare for the last four years. This time last year I moved back in with my mam in Dublin as I was depressed and broke... At the start of the year 2009 I got the usual bill from the management company (eur 1085) and of course I put it on the long finger until they started threatning to charge interest. At this stage every year I pay my bill, sorted. But in september of this year, many of the resedents got together and sacked the management company and hired a new one. Now the new management company had sent me letters asking me to pay the bill, I dident receive these letters until thursday last because I only check on the place once in a while (its not being rented either). Anyhow on thursday theres two bills from the management company for eur 1085 and two letters from a debt collector for eur 1285.60. About eur 200 interest with no warning. No letter from them saying they were going to charge it. Am I entitled to such a letter before they charge interest or a phone call should they have made more of an effort to see was I receiving their letters?

Now I hold my hands up for putting the bill on the long finger, I accept that. But I feel the new management company should have got in contact with me by phone (they had my number all along) or realised that I wasnt receiving their letters. The previous comapny knew my situation, I feel this wouldant have happened with them (as ive said, I always payed my bill by the end of the year with no hassle.

I have sent them a cheque for 1085 but the extra 200 would kill me ( I know there are others worse off than me)

Ive been in contact with the debt collector and the company themselves. The debt collector said he tried to get the interest removed. When I spoke to the property manager he wasnt budgeing.

Any advice would be greatly appriceated.

thanks for reading

jhegarty

Does the contract allow for a interest charge ?

Thoie

As above, your lease probably includes something about interest on unpaid fees, and they're under no obligation to contact you personally.

You could try sending them a doctor's letter explaining the situation and see if they'll waive it, but they're not obliged to.

Sponge Bob

However that is 20% interest at a time when real interest rates are nearly zero .

You cannot sack a management compeny , do you mean agent ??

Paulw

Firstly, you need to understand the difference between management company and management agent.

You can't fire a management company, but you can the management agent.

Anyway, aside from that, it would be fairly standard to have a clause in the Lease Contract which states that interest and fees can be added to overdue management fees.

Basically, I'd bet that they are well within their rights, and they are also entitled to sell the debt to a debt collection agency. So, you better pay up in full, of they can keep adding interest/fees to the debt you owe, and they can also take further action against you.

Kidchameleon

Hi All,

Thanks for the replys. Im not sure what is in the contract, it was 5 years ago when I last saw it but I would assume there is something about interest. I asked the new property manager could he send me a copy, he said that only my solicitor has a copy. Should I not have to sign a new contract with the new management company?

Does anyone know what the rules are for taking legal action? Should he have sent the warning by regestered post?

Thanks again you guys are very helpful.

Ps. Im pretty sure its a Management Agent

Lorelei

1. EU law allows admin charges and interest to be charged automatically on any unpaid bills. Interest can be charged at present at 0.0025% per day. Admin charges depend on amount owed, VAT is then added. Example up to € 1,000 I charge € 10.00 admin per reminder and 0.25% so if your bill is € 500.00 after 20 days and one reminder I would be entitiled to Admin 10.00 interest 25.00 after another 10 days for example a further 10.00 plus interest on 535 for 10 days bill now is 558.76, The courts will judge against you.
The one about your not collecting mail and there sending on to your address won't help if they send mail to you last known address (i.e. they were informed in writing)then they are in the clear.
However in most cases once you start talking and keep to your promises interest admin etc is forgotten as nobody want to annoy a customer unless of course he or she gets on a high horse.

Paulw

Kidchameleon wrote: »

I asked the new property manager could he send me a copy, he said that only my solicitor has a copy. Should I not have to sign a new contract with the new management company?

Does anyone know what the rules are for taking legal action? Should he have sent the warning by regestered post?

The management agent is correct. You will have to go to your solicitor for a copy of your contract. The management agent would be unlikely to have a copy, since they are not actually party to the contract itself.

Again, you haven't change management company, but the management company has changed management agent. No new contracts are required (aside from a contract between management company and the management agent, which the directors of the management company sign).

If you don't pay your fees, then the management company are well within their rights to take legal action against you. They are not required to send you warnings or anything else. One invoice unpaid is enough for them to then take legal action. But, most management agents tend to send 2-3 warning letters (seldom by registered post).

Lorelei

The unpaid letter "warnings" are part of the debt recovery process, no court would give a judgement unless such letters have been sent out, so there is an obligation to send out reminders however the interest and admin charges are there to compensate for these costs.
Bear in mind the basis of Tort Law "what a reasonable person can reasonably expected to do under reasonable circumstances".
Reminders are reasonable and to be paid for sending them is reasonable. It is not reasonable to start jumping all over someone at once. He/she could be ill or out of the country, however in either case after 4 weeks + reasonably speaking someone should be in touch with you.

Cabaal

jhegarty wrote: »

Does the contract allow for a interest charge ?

Its the debt collectors adding the interest not the management company

Lorelei

There is no need for the contract to make mention of interest, a contract cannot rule out any part of legislation the relevant act regulation being:
European Communities (Late Payment in Commercial Transactions) Regulations 2002 .
How much compensation am I allowed and how do I claim it?

Compensation may be claimed for the recovery costs of the debt if such costs arise. The Regulations provide that the following 'Flat Rates' can be used:

Amount of late payment


Compensation

Not exceeding €1000


€40

Exceeding €1000 but not exceeding €10,000


€70

Exceeding €10,000


€100
Q6. Can the purchaser wait until the supplier claims late payment interest before paying it?

The Purchaser should pay the interest without being asked or else risk legal proceedings.
Q7. What is the relationship between late payment interest and compensation for recovery costs?

If late payment interest is payable in respect of a payment the supplier is also entitled to compensation for recovery costs as outlined in the schedule to the Regulations. The supplier should inform the purchaser that recovery costs have actually been incurred before the purchaser pays compensation as requested However, the supplier is not required to cite evidence of having incurred recovery costs.

From the 1st July 2009, the late payment interest rate is 8% per annum (that is based on the ECB rate of 1% plus the margin of 7%). That rate equates to a daily rate of 0.022%. Penalty interest due for late payments should be calculated on a daily basis.

The following link gives all the information,

http://www.entemp.ie/enterprise/smes/latepay.htm

Paulw

Lorelei wrote: »

There is no need for the contract to make mention of interest, a contract cannot rule out any part of legislation the relevant act regulation being:
European Communities (Late Payment in Commercial Transactions) Regulations 2002 .

I'm not sure what this is supposed to relate to, but this is not a "commercial transaction". Please stop confusing the OP with the "information" you post.

Almost all Lease Contracts will stipulate what interest or further charges may be applied for failure to pay management fees.

Our contract does allow interest of up to 20%.

It is also up to the OP to make sure that the management agent is aware of his correct postal address, and not up to the management agent to chase the OP for this information. The OP is legally liable for the management fees overdue, plus any interest/fees charged.

Lorelei

OK you better let the district court know as I have had a judgement against a private customer under the above regulation.
Don't understand inverted commas on information all my postings relate to personal experience.

Paulw

Lorelei wrote: »

OK you better let the district court know as I have had a judgement against a private customer under the above regulation.

A district court won't currently hear issues between management companies and unit owners, due to a ruling earlier this year, which stated that the PRTB must make such rulings.

I assume your experience doesn't relate to management companies?

Lorelei

no it didn't my reply was in answer to your point about commercial transactions the whole point I am referring to is interest and admin chargew.

Kidchameleon

Hi All,

Thanks so much for all your help. An update....


I had a look at the proposal for the tender of contract that the agent sent out. It says specifially that I will be rang if I have not paid my fee within 7 days of receiving the bill. The call is to tell me that interest will be charged if its not paid within 30 days. If after 30 days its still not paid I will be sent a letter stating that if its not paid within 7 days, interest will be charged. I got neither a call or such a letter.

Rang him (the management agent) today (Wednsday). I told him I had read the above. I asked him to confirm that he had not rang me (He told me several times on monday that he had not rang me as it was not their policy to ring people) He of course denied that he said this. He said "maybe somebody else in the company rang me". I told him I never received the letter saying I will be charged interest.

I asked again to confirm that he had not rang. He said "well maybe I dident ring" I said based on this that I want the interest removed. He said he had to talk to one of the directors before he does anything about removing interest. I asked him to ring me back with an update but as yet he has not...

He said that the proposal is "invalid" as it is only a proposal. The members agreed at a meeting (which I was not at) to a contract that said all fees must be paid within 7 days or "legal action would be taken".

Sorry this is so long,

Thanks for reading.

Lorelei

Couple of points here although I'm not sure how valid they are.
1. If the members meeting was the members committe of the complex then you are, I believe bound by the decisions reached there.
It is possible that you are bound by the tender of contract as in some cases it can be taken that you have accepted the terms. Once again not 100% sure.
You must be sent letters to enforce the claim, as said earlier.

I would strongly advise getting in touch with Threshold at this point. The PRBT represent landlords, threshold tenants etc, they do cooperate with each other, of course Threshold may not help as you are not a tennant, but I would be very suprised if they didn't point you in the right direction.
Another point at this stage stop using the phone from now on email or write keeping copies at present you have no proof of what was said. If the other side insist on only oral communication then each time send an email after the call confirming what was said. If the other side dont get back saying "no we meant blah blah" then they have confirmed what you claim. Simple sentences eg "To confirm telephone conversation at approx 1:00pm on 1.12.09 you will try to have the interest charges lifted"
Good luck with it all.

Paulw

Ultimately the decision rests with the directors of the management company and the agent is only doing as instructed.

A proposal can be just that. Again, if he says that a vote was taken and his instructions were to send a single invoice and then after 7 days start adding interest, then that is what he will do. What the agent does it determined by the instructions from the management company/directors of the management company. You not being at the meeting where the vote was taken has no impact at all.

Don't forget that the directors of the management company are generally just unit owners, who have their own jobs and lives, so it may take a few days before the management agent gets a proper response.

I am a director of our management company, and we've been through a similar process. We recently changed the process, and instead of giving 30 days notice, we changed it to 7. We also add the maximum permitted amount of interest and charges, to encourage people to pay as quickly as possible. Those who don't pay on time, I've no sympathy for. In one case (out of 15) we waved the interest, due to special circumstances. Otherwise, the rest were advised that if they didn't pay the interest, their interest would continue to increase, and would be added to the next year of management fees.

From all you have posted so far, the agent is simply doing the job he was instructed to do, and you are still liable for all costs.

Lorelei

Paul's comments are true, although I feel personally from the information given to date that the management agent is not doing a great job. Ignoring calls etc. Pretty sure that if all sides sat down together over a coffee, it could be resolved amicably. Seems to have started with post not being collected, parties not understanding their obligations.
Possibly if OP agreed to pay part of the interest, put his hands up as having made a human mistake and promised to stick to his duties as part of one of the owners of the complex - after all his fees go towards the maintenance and upkeep of what is a part of his property - then it might all be resolved. Being in a business which works very closely with property managers from some of the bigger companies in Dublin and not so big, I sympathise with those guys. The owners who pay their fees on time want value for their money and if there is a hole in the kitty through non-payers what is the property manager to do? And as Paul says the Prop Mgr is an agent of the complex owners.

Paulw

Here are the facts -

The OP must ensure that the management agent has his/her correct contact details (postal address, email address, phone number, etc).

The OP must pay all management fees due in an appropriate time.

If the OP fails to pay any fees due on time, then the management company are within their right to add interest or any further charges that is outlined in the Lease Contract (with the OP's solicitor will have a copy of).

If the OP does not pay the interest/fees, then these continue to increase, until all outstanding debt is paid.

Failure to pay fees will mean that the OP does not have a vote at the company AGM, and may also be excluded from such AGM (depending on the Lease Contract clauses).

Ultimately, it's simple - the Lease Contract breaks down what the OP is liable for, and it is the OP's duty to abide by all clauses, especially relating to paying management fees. Management fees are generally due at the start of the year (or company financial year), so waiting until near the end of the year is reckless.

Personally, I've no sympathy at all for the OP. I know, from experience, what it's like trying to manage a development where people think they don't have to pay (or pay on time).

The OP should pay the interest, learn his lesson, and move on. That's unless you find a very sympathetic director who will wave the interest.

Lorelei

YUP if people paid there fees on time in full Property Managers would be able to pay people like me on time.
Still feel that the OP should try talking (as he appears to have acted out of ignorance and a bit naive) to try and reduce the interest charges - which are in a way a sort of punishment to make people learn for the future.
I think today that we are all too ready to get up on our horses and charge into battle.
From Paul's replies he obviously has professional dealing with this type of business as I do. Whereas kidchamelon sounds a complete amateur who provided everything is correct has made a mistake or two and got over his head.

GENERALLY TO OP SHOULD THROW HIMSELF AT THE MERCY OF THE BOARD AND IF THEY AGREE TO REDUCE THE INTEREST BE THANKFUL. IF NOT THEN PAY UP. Management fees were without a doubt part of your original contract and purchase.

Kidchameleon

Hi all,

thanks so much for the replys, all views are greatly appriceated and very helpful. Just to confirm, I have paid the management fee, it is the interest without warning that I have a problem with.

Will keep you guys posted,

Thanks again.

Paulw

Kidchameleon wrote: »

Just to confirm, I have paid the management fee, it is the interest without warning that I have a problem with.

The warning, as such, is contained in your original Lease Contract that you signed, which would clearly state interest rates (min-max) and any other penalties that you are liable for, should you not pay your fees on time.

You shouldn't need any further warning than that. Getting calls or other letters shouldn't be needed, nor (in general) is it required.

Do keep us posted.

higgins2010

Hi i know this is an old post. but can you tell me how you got rid of the original management company as we want to change our management company and do it our selfs

Kidchameleon

higgins2010 wrote: »

Hi i know this is an old post. but can you tell me how you got rid of the original management company as we want to change our management company and do it our selfs

Hi,

Well as owners of the property, we are the management company, it was the "agent" that was changed. The two directors sent letters to all owners informing them that a meeting was being held. At this meeting, it was decided to change agent...

Good Luck,

Ps. Might have some news soon about my problem, been talking to the two directors about it, fingers crossed...

Paulw

higgins2010 wrote: »

can you tell me how you got rid of the original management company as we want to change our management company and do it our selfs

You ARE the management company. All shareholders (unit owners) are members of the management company.

I assume you want to remove the management agent?

This is simply done by the directors of the management company firing the management agent.

Each year at your AGM, new directors should be elected. If not, then I can only assume that the developer still has control. So, contact the company directors (contact details available through the CRO), and make a proposal for the management agent to be removed. This can then be voted on at the next AGM.

Kidchameleon

Hi All,

This is STILL ongoing. Ill have more news next week. Perhaps you guys and gals could help me. Im wondering if going to a debt collection agency constitutes "Legal action". Im sure I read somewhere that legal action involves first going to a solicitor?

Thanks and will continue to keep you people posted,

kid.

Lorelei

The term legal action does not as such have a legal definitiion, what it means is that the informal sending of reminders, demands for payment etc has now come to an end.
Formal action will now be taken this does not necessarliy mean the use of a solicitor.
For a creditor to have any chance of success he/she needs to be able to prove that they have followed every reasonable course to secure payment.
If these actions have proved unsuccessful then they can go on with possible court action.
Quite often debt collection agencys are run by solicitors.
It is up to the creditor whether he uses a debt collection agency or not. A lot of debt collection agencies work on the basis that if they don't collect they don't get paid so they tend to only take on cases where they reckon with a good chance of success.
It might be an idea to talk to your own solicitor at this point.

Kidchameleon

Paulw wrote: »

If the OP fails to pay any fees due on time, then the management company are within their right to add interest or any further charges that is outlined in the Lease Contract (with the OP's solicitor will have a copy of).

Hi,

I asked my solicitor for a copy of this, she inforrmed me that it is with the management comapany. I asked one of the directors could she provide me with a copy, she told me to ask the agent. I asked the agent, he still hasnt provided me with a copy, this was three weeks ago!

Regards,

Kid.

bytesize

Paulw wrote: »

You ARE the management company. All shareholders (unit owners) are members of the management company.

I assume you want to remove the management agent?

This is simply done by the directors of the management company firing the management agent.

Each year at your AGM, new directors should be elected. If not, then I can only assume that the developer still has control. So, contact the company directors (contact details available through the CRO), and make a proposal for the management agent to be removed. This can then be voted on at the next AGM.

Kidchameleon wrote: »

Hi,

I asked my solicitor for a copy of this, she inforrmed me that it is with the management comapany. I asked one of the directors could she provide me with a copy, she told me to ask the agent. I asked the agent, he still hasnt provided me with a copy, this was three weeks ago!

Regards,

Kid.

I don't understand... If YOU 'ARE' the management company, why would you have to pay yourself?

Paulw

Kidchameleon wrote: »

I asked my solicitor for a copy of this, she inforrmed me that it is with the management comapany.

Your solicitor should have a copy. You signed this Lease Contract. One copy for yourself (normally held by your solicitor) and one copy for the solicitor of the management company (or developer).

I find it very unusual that your solicitor has directed you to the Management Company.

bytesize2.0 wrote: »

I don't understand... If YOU 'ARE' the management company, why would you have to pay yourself?

Every unit owner is a member of the management company. The management company is there to provide communal services (cleaning, insurance, maintenance, etc) to run the development. The management company is a not-for-profit company - ie all funds collected go in to the company and are used for the development, and any surplus is added to the sinking fund. Normally, at the end of a year, there should be little or no money left over, aside from funds added to the sinking fund.

Maybe you need to do some research on what a management company is?