Massive increase in Management Fee

Drop the Ball

Heisenberg. wrote: »

This post has been deleted.

That's not a fair comment. if you own a property within the development ran by a management company then you are part of that management company and can influence management company decisions and budgets. The problem is not many owners turn up to AGM's or get involved in the running of the management company's and decision making such as budgets & management fees, etc...and then only complain when the receive the receive their annual management fees notice.

MarkAnthony

markpb wrote: »

That's only partially true. Apartment owners are at the mercy of a company they themselves are a member of. They have the right to elect directors, a right to vote in anything raised at an AGM. They also have aright to put themselves up for election as a director.

But other than that, they're helpless...

As helpless as someone who finds a structural issue with their house that's not covered by insurance? In apartments it's (or should be) a drip, drip relatively fixed outlay every year. In a house it's potentially tens of thousands of euro on a idle Tuesday.

blacklilly

MarkAnthony wrote: »

. The issue arises because owner occupiers rarely turn up, directors probably get a discount .

Directors are there in a voluntary unpaid capacity. I'm going to discount everything else you say in your post because of your ridiculous statement above

blacklilly

MarkAnthony wrote: »

Directors can and do claim legitimate expenses (I know I do), in some cases that's a straight discount on their management fee, whether correct or not.

Please feel free to discount what ever you like but your naivety helps no one. If you don't think that there aren't directors out there looking after themselves at the expense of other residents you are out of your mind.

Please save me, you have no idea of my professional background. As per the Memoardum and articles of association Directors can claim associated expenses (however not many do) This is entirely different from the statement you made if your previous post;

MarkAnthony wrote: »

The issue arises because owner occupiers rarely turn up, directors probably get a discount

and does absolutely nothing to aid others in their understanding of how a management company operates,

davo10

MarkAnthony wrote: »

Directors can and do claim legitimate expenses (I know I do), in some cases that's a straight discount on their management fee, whether correct or not.

Please feel free to discount what ever you like but your naivety helps no one. If you don't think that there aren't directors out there looking after themselves at the expense of other residents you are out of your mind.

I'm secretary of OBM and have never heard of a discount on fees for directors. Yearly fees are laid out at the AGM and voted on, any owner is entitled to speak at the AGM and many do. But if you don't go, you can't blame the other owners/board for the decisions made by the majority.

The two main reasons out fees have gone up over the last 2 years are the sinking fund and non payment of subscriptions by a significant number of owners who claim they can't/won't pay.

blacklilly

davo10 wrote: »

I'm secretary of OBM and have never heard of a discount on fees for directors.

I would like to see the what issues this creates for the auditors of the accounts.

davo10

blacklilly wrote: »

I would like to see the what issues this creates for the auditors of the accounts.

They are voluntary, unpaid positions, I'm not an accountant, but what issues?

davo10

MarkAnthony wrote: »

Again if you think that directors in complexes with exceptionally high fees aren't up to something I have to doubt your competence.

.

You are trolling. All subscriptions/expenses are discussed at the AGM, and all members are free to question the figures so how does this sweeping statement apply? The high fees may be due to a multitude of reasons, all of which are explained at the meeting or afterwards by requesting minutes of the meeting/answers from the chairperson.

MarkAnthony

davo10 wrote: »

You are trolling. All subscriptions/expenses are discussed at the AGM, and all members are free to question the figures so how does this sweeping statement apply? The high fees may be due to a multitude of reasons, all of which are explained at the meeting or afterwards by requesting minutes of the meeting/answers from the chairperson.

Okay fair point on a sweeping statement, it may be simple incompetence. The fact is though that in many cases very few people are attending AGMs, a small cabal of landlords own large parts of the complex and are directors themselves.

There is no reason why one complex should have drastically different management fees from a similar one down the road. That comes down to either poor management in the past (including the collection of fees) or something more sinister.

I also resent the accusation of trolling. If you have a problem with my posts please report them. Better yet why not simply engage with the issues?

blacklilly

davo10 wrote: »

They are voluntary, unpaid positions, I'm not an accountant, but what issues?

Sorry my comment was not in reference to your comment. It was in reference to the comment made regarding directors getting their service charges discounted.

I'm not an accountant either but it is my understanding that all service charges billed to and paid by Directors must be noted in the audited accounts.

MarkAnthony

blacklilly wrote: »

Sorry my comment was not in reference to your comment. It was in reference to the comment made regarding directors getting their service charges discounted.

I'm not an accountant either but it is my understanding that all service charges billed to and paid by Directors must be noted in the audited accounts.

You're absolutely correct but a discount can be applied if also shown in the accounts, its the way we used to go about it. It was questioned last year and changed to a mechanism where amounts are claimed back. Frankly I prefer it that way but it has no issue passing the OMC for a number of years and was completely out in the open. The auditors never had an issue with it. For the sake of clarity we are talking about a stipend here of less than €100 for phone calls, stationary etc. in a pretty active board.

Something less 'above board' should absolutely be caught by the auditors and I hope it would be. However whether you agree with me or not I simply refuse to believe that in some cases some directors aren't doing some sort of fiddle probably through the manipulation of the agent fees.

Any way I'm sorry to have bit back as hard as I did but frankly you could have looked for clarity on my comments, especially as you seemed to take issue with a single word. It wasn't my intention to upset people it's a subject that annoys me as so many people are getting ripped off.

blacklilly

MarkAnthony wrote: »

You're absolutely correct but a discount can be applied if also shown in the accounts, its the way we used to go about it. It was questioned last year and changed to a mechanism where amounts are claimed back. Frankly I prefer it that way but it has no issue passing the OMC for a number of years and was completely out in the open. The auditors never had an issue with it. For the sake of clarity we are talking about a stipend here of less than €100 for phone calls, stationary etc. in a pretty active board.

Something less 'above board' should absolutely be caught by the auditors and I hope it would be. However whether you agree with me or not I simply refuse to believe that in some cases some directors aren't doing some sort of fiddle probably through the manipulation of the agent fees.

Any way I'm sorry to have bit back as hard as I did but frankly you could have looked for clarity on my comments, especially as you seemed to take issue with a single word. It wasn't my intention to upset people it's a subject that annoys me as so many people are getting ripped off.

Thanks for explaining further.

My apologies if my post came across as attacking you. I took umbrage to your comment because there are so many people who literally know nothing about OMC's and a comment such as the one you made could cause even more confusion/distrust.
However your explanation above about how you claim back your expenses makes more sense.

If some Directors are manipulating figures, that is wrong and is in breach of company law. If any member of an OMC suspects that this is occurring they should report it.

MarkAnthony

blacklilly wrote: »

Thanks for explaining further.

My apologies if my post came across as attacking you. I took umbrage to your comment because there are so many people who literally know nothing about OMC's and a comment such as the one you made could cause even more confusion/distrust.
However your explanation above about how you claim back your expenses makes more sense.

If some Directors are manipulating figures, that is wrong and is in breach of company law. If any member of an OMC suspects that this is occurring they should report it.

No I totally understand, complete over reaction on my part. At least there's two (and now the OP!) with a passion for it. It's just a shame more people don't try and get involved, it pays dividends in one's living situation and pocket.

Larbre34

I'm a director myself of the mgmt co. of a small development in D15, live in an own door apartment, and my own fee is dropping from €800 to €640 this year, with a pro rata drop across the estate.

The reason this happened is because we did the leg work and sacked the previous agent 2 years ago, brought in a property management co with big resources to reduce services costs and chase debtors and we also tied things like car parking permission to payment of management fees. It caused some discontent in the short term but now everyone is paying less and getting the services.

Simply speaking, property management companies are getting free money from residents who are not willing to commit a small amount of time to ease their own burden. Even leaving aside insufficient sinking funds, there has not remotely been the kind of inflation is services since 2008 to justify the increases in costs, expect perhaps energy.

It astounds me that people are going on marches against €160 of water charges or 2-300 of property tax when there are annual increases 30-40% being lumped on management fees in private developments, which is the one thing they can actually do do something about!

Lantus

There is a very real lack of general and specific knowledge regarding OMCs which is very much supported by many of the general and wholly incorrect statements being made on this thread.

This in itself and peoples apathy in seeking out and obtaining such knowledge (which can be a lengthy process) gives rise to the same old rumours and false statements that do the rounds time after time. Its a major headache for directors who are being undermined by ignorance from their own members.


Service Fees
These can vary hugely. They are totally dependant upon the specific elements which make up that development and its overall size. Green areas, electronic gates and access control systems, lift(s), fire alarm systems, electricity for lighting, carpet, cleaning, painting, water systems, staircases, doors, block insurance (very expensive!) and car parks

A development may have none or some or all of these (or more not listed). It may comprise of 6, 60 or 600 units between which these costs are spread. It may have inherent building faults thanks to a kind builder which may cost €500, 5000 or in the case of one OMC a bill of around €1.2 million.
The developer may of failed to maintain a sinking fund account.

Subject to the area there could be a greater or lower proportion of people who can readily afford to pay. Subject to the management there could be a greater or lesser amount of people getting away without paying. (they are only hurting themselves in the long run.)

Directors
Some developments may still have the developer as the directors but the majority are now resident run. Directors are typically nearly always unpaid volunteers who take on a real legal responsibility for the building and the entire development. That means they can be prosecuted if fire safety systems or lifts are not maintained properly and someone gets hurt. Most people would not like to be paid to do that! They also set service fees, enforce collection and tackle all the micro minute queries and paperwork and letters and accounts and organising tenders and works projects. Its a huge job with severe responsibility and all done by unpaid volunteers. The vast majority of directors are honest hard working people who are motivated beyond money and usually have a deep passion and caring approach for their communities.

In return they are often pilloried and attacked based on rumours and myths. Very sad.


There is no substitute for knowledge.

The_Conductor

Guys- I appreciate that the tit-for-tat name calling etc- a few posts back, along with accusations of trolling etc- has died down. Lets keep it that way.

Victor

MarkAnthony wrote: »

There is no reason why one complex should have drastically different management fees from a similar one down the road.

But the things is, the one down the road is rarely similar.

About 15 years ago, I worked on the budgeting of an 500-apartment development. The first design (2 apartments per floor) had 40 lifts. A re-design (4 apartments per floor) saw the number of lifts drop to 20. No extra walking distance from apartment door to lift. €1m+ knocked off the cost of the project in one feel swoop.

That is one lift per 25 apartments. There was another development that only had 5 apartments, but still had a lift. That can make a real difference.

Similarly, some apartment developments have on-site security / concierges, which can cost an arm and a leg to run.

Lantus

Victor wrote: »

But the things is, the one down the road is rarely similar.

About 15 years ago, I worked on the budgeting of an 500-apartment development. The first design (2 apartments per floor) had 40 lifts. A re-design (4 apartments per floor) saw the number of lifts drop to 20. No extra walking distance from apartment door to lift. €1m+ knocked off the cost of the project in one feel swoop.

That is one lift per 25 apartments. There was another development that only had 5 apartments, but still had a lift. That can make a real difference.

Similarly, some apartment developments have on-site security / concierges, which can cost an arm and a leg to run.

I would say that was to save on construction costs first and foremost although it would of directly affected future maintenance costs as well.

The buildings future in 5, 20, 50 years is rarely ever thought of and certainly not from a management companies perspective. Lifts (which are cash extractors) for developments with a little as 10 units is really bad planning.

Victor

Lantus wrote: »

Lifts (which are cash extractors) for developments with a little as 10 units is really bad planning.

Lifts are mandatory in apartment buildings with more than 6 apartments or 3 storeys - there is no choice. How far would you carry a wardrobe / bed / pram up stairs?

MarkAnthony

Victor wrote: »

Lifts are mandatory in apartment buildings with more than 6 apartments or 3 storeys - there is no choice. How far would you carry a wardrobe / bed / pram up stairs?

TBH all the furniture I've had delivered wouldn't fit in the blasted thing so they (I) had to carry it up the sodding stairs.

Given a properly run and vigilant OMC I can't really see them being cash extractors for anyone but well paid lift engineers.

Lantus

Victor wrote: »

Lifts are mandatory in apartment buildings with more than 6 apartments or 3 storeys - there is no choice. How far would you carry a wardrobe / bed / pram up stairs?

I think the issue is building an apartment block that ONLY contains 6 units. There is no economy of scale. In affluent areas where payment of any fee wont be an issue then fine but anywhere else questions should be asked.

If just one or two people don't pay their fee then the consequences are much more severe compared to say where there are 25, 50, 100 units.

And as per the other comment in a unit with only say 6-10 units the lift will be very small, usually the smallest.

campingcarist

MarkAnthony wrote:

The issue arises because owner occupiers rarely turn up, directors probably get a discount .

blacklilly wrote: »

Directors are there in a voluntary unpaid capacity. I'm going to discount everything else you say in your post because of your ridiculous statement above

The estate I live on has over 100 properties between houses and apartments. At the last AGM there were less than 12 owners present.

I turned down a property in a decent development because the chairman was paid 5k and some other directors were paid between 1k and 3k. The chairman said that the 5k he received from this estate was less than he received from other estates for which he was chairman

Paulw

campingcarist wrote: »

The estate I live on has over 100 properties between houses and apartments. At the last AGM there were less than 12 owners present.

I live in a development with 112 units. The largest turnout at an AGM was 25. The smallest was 8 (the quorum is 7).

campingcarist wrote: »

I turned down a property in a decent development because the chairman was paid 5k and some other directors were paid between 1k and 3k. The chairman said that the 5k he received from this estate was less than he received from other estates for which he was chairman

Chairman? For a management company, there should only be a board of directors. And, if they are paid, then that can be challenged at any AGM by the members. I've been a director for many years, and have never been paid a cent.

superhooper

Paulw wrote: »

I live in a development with 112 units. The largest turnout at an AGM was 25. The smallest was 8 (the quorum is 7).



Chairman? For a management company, there should only be a board of directors. And, if they are paid, then that can be challenged at any AGM by the members. I've been a director for many years, and have never been paid a cent.

Been a Director too and never been paid but in our case we hire a professional property management company to see to the day to day stuff . I wonder is it the case that these Directors are more involved in organising maintenance etc.

blacklilly

superhooper wrote: »

Been a Director too and never been paid but in our case we hire a professional property management company to see to the day to day stuff . I wonder is it the case that these Directors are more involved in organising maintenance etc.

If these Directors are being paid to undertake work which a Managiong Agent would typically undertake then they would have to have a PSRA Licence.

P. Breathnach

blacklilly wrote: »

If these Directors are being paid to undertake work which a Managiong Agent would typically undertake then they would have to have a PSRA Licence.

I think you are mistaken in that. The PSRA is concerned with persons (individuals or companies) who in effect contract to relieve the directors of the burden of day-to-day management of a development.

But the payment of directors is a tricky area. First, the Articles of Association might not permit it. Second, even if it is permissible, it can give rise to conflicts of interest. Third, it can create difficulties in the relationship between directors and the rest of the members.

Are there many MUDs which operate without appointing a managing agent?

The_Conductor

P. Breathnach wrote: »

Are there many MUDs which operate without appointing a managing agent?

Very difficult to tell- there is no central register of all MUDs- much less those who hire managing agents to discharge their responsibilities.....

P. Breathnach

The_Conductor wrote: »

Very difficult to tell- there is no central register of all MUDs- much less those who hire managing agents to discharge their responsibilities.....

Oh, I know it is very difficult to tell! It was a thinking-out-loud question.

blacklilly

P. Breathnach wrote: »

I think you are mistaken in that. The PSRA is concerned with persons (individuals or companies) who in effect contract to relieve the directors of the burden of day-to-day management of a development.

But the payment of directors is a tricky area. First, the Articles of Association might not permit it. Second, even if it is permissible, it can give rise to conflicts of interest. Third, it can create difficulties in the relationship between directors and the rest of the members.

Are there many MUDs which operate without appointing a managing agent?

It was my understanding that if a person be they a Director of an OMC or not is providing a property service (for instance where no MA is engaged and the Director or other such person carries out the work that an MA would typically) and is being renumerated for this, then they are required to have a PSRA licence.
If they are not being renumerated for this but are claiming for expenses then a PSRA licence would not be required.

I'm open to correction on this

Victor

Paulw wrote: »

Chairman? For a management company, there should only be a board of directors.

Who manages board meetings?

Legally, a Secretary is also required.