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Nama and Apartment Service Charges

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  • 05-04-2012 2:16pm
    #1
    jd
    Registered Users Posts: 5,699 ✭✭✭


    I came across an interesting blog entry at
    http://www.akproperty.ie/blog/unpaid-service-charges%3A-unfair-burden-compliant-property-owners
    To complicate matters even further, the above investor is ‘in NAMA’. What does ’in NAMA’ mean to property owners in this apartment block who are funding this investor’s unpaid service charge bill that currently stands at 100% of the annual budget. ‘In NAMA’ means nothing to them. There is no accountability or allowance ‘in NAMA’ for unpaid service charges. We have received correspondence from NAMA advising us that they are not responsible or accountable for service charges on properties. Service charges do not fall within their brief. Instaed they fall on the doorstep of the compliant property owner.

    Has anyone heard of issues re service charges for "NAMA" apartments? Seems a bit unfair if other unit owners have to pay for services for NAMA tenants.


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    #2
    Kosseegan
    Banned (with Prison Access) Posts: 987 ✭✭✭Kosseegan


    It is completely irrelevant whether or not the investor is in NAMA. Unpaid service charges are a problem generally. Complaint owners need to wise up and get after the management company to secure the monies owed.


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    #3
    jd
    Registered Users Posts: 5,699 ✭✭✭jd


    Kosseegan wrote: »
    It is completely irrelevant whether or not the investor is in NAMA. Unpaid service charges are a problem generally. Complaint owners need to wise up and get after the management company to secure the monies owed.
    I'm aware of the existing problems with non-payment and our (self-managed) OMC spends quite a bit of time dealing with it. I'm interested in knowing have other OMCs had issues with NAMA.


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    #4
    Victor
    Registered Users Posts: 78,402 ✭✭✭✭Victor


    jd wrote: »
    Has anyone heard of issues re service charges for "NAMA" apartments? Seems a bit unfair if other unit owners have to pay for services for NAMA tenants.
    I think you might be confusing NAMA landlords and NAMA tenants.

    If there is a tenant in place, then one or other should be paying the service charge in line with their lease. Typically it is the landlord who owes it, but the tenant is required to pay it on their behalf.

    If there is no tenant in place, the problems arises where the property owner (often, but not always the developer) has no funds and NAMA has a charge over the property. The owner can't pay and NAMA has no responsibility to pay. The management company can't get a meaningful charge on the property because NAMA already has one.

    Where the owner has defaulted and NAMA has taken possession of the property it will be down to what the lease between the individual owners and the management company saws - often developers have them structured such that no management fees are payable until the unit is occupied.


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    #5
    Marcusm
    Registered Users Posts: 10,320 ✭✭✭✭Marcusm


    Victor wrote: »
    I think you might be confusing NAMA landlords and NAMA tenants.

    If there is a tenant in place, then one or other should be paying the service charge in line with their lease. Typically it is the landlord who owes it, but the tenant is required to pay it on their behalf.

    If there is no tenant in place, the problems arises where the property owner (often, but not always the developer) has no funds and NAMA has a charge over the property. The owner can't pay and NAMA has no responsibility to pay. The management company can't get a meaningful charge on the property because NAMA already has one.

    Where the owner has defaulted and NAMA has taken possession of the property it will be down to what the lease between the individual owners and the management company saws - often developers have them structured such that no management fees are payable until the unit is occupied.

    In analogous situations in England & Wales, the freeholder (which would be the mgt company in Irish situations where the documentary process has been fully completed) would apply for forfeiture of the lease in cases of persistent wilful non payment of service charges. In most such cases the bank holding the mortgage would pay the charges to ensure that it does not lose the value of its security. This is one of the few instances in which the mortgage bank is entitled to the net proceeds (arising on grant of a new lease) after discharge of the costs.

    It strikes me that some enterprising law firm could suggest this to OMCs as a way of speeding up service charge payments if a similar process was permitted in Ireland/under the particular leases. I suspect the courts would have little sympathy for Nama in circumstances such as this where the costs fall back on the ordinary apartment owners.


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