Massive increase in Management Fee

superhooper

blacklilly wrote: »

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

I'm not a lawyer and don't know the answer but I would interpret that the PRSA looks to licence agents whereas a Director of a Mgt Co., be they paid or otherwise are just an officer/employee of a company that is looking after its own property. The other difference being that the fees that the company receives are from its owners/shareholders.

Lantus

blacklilly wrote: »

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

Its a grey(ish) area. Managing agents are profit making entities which take on many of the responsibilities of a development. By contrast the directors of the OMC are part of a non profit company and have a legal obligation to undertake these services. It is not explicitly required that they hire an agent to do so, and in fact it may not be a requirement in every case.

A combination of hard work on the part on the director team and the appointment of a number of separate contractors will often achieve the same thing. In other words the directors provide the management aspect and contractors undertake the work as required.

Management companies are not regulated in this manner so I don't think there is any situation where a director of an OMC would require a PRSA license. If they did then that would imply they are providing services for profit and NOT as a director but as an independent entity?


The term Chairman just refers to the title of a director who chairs meetings (see a few posts up) See the ODCE handbook.

In terms of director remuneration its a tricky subject. Generally it is part of the AofA that they are unpaid. This can be changed by member vote at an AGM of course. The tricky part is how and why. If there is an MA then I would say no. In fact even if there isn't an MA my feeling is that it should be voluntary with the exception of expenses for travel and other sundries.

Once you open the door to paid services you open the door to all the people who have no real interest in the development but do see a way to get a hold of easy money. Even if initially it was done in good faith for a really nice bunch of people the next people lying in wait may not be so nice and have done nothing to justify the remuneration.

The appointment of directors is more akin to democracy so you can have no qualifications or morals but as long as you have a cheeky grin and the gift of the gab you can easily sweet talk people into giving you the role. More often enough because no one else wants it!

Being paid should incur tax issues though for the individual. That in itself makes it a less than desirable avenue to go down purely from the paperwork perspective. Also, how do directors get paid? Do they take their lump sum BEFORE any work is done or as a proportion?

Given how much unpaid directors get attacked and derided it could be even more 'uncomfortable' if they were paid. and people felt they had a right to annoy and complain every 5 minutes because they are being paid.

Dr.Teeth

MarkAnthony wrote: »

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.


"being cash extractors for anyone but well paid lift engineers".

There is a big difference between Goods and Passenger lifts, those guys are well paid as its a complicated job and machine, it involves computers, electrical, mechanical, knowledge of EN standards, buildings regs etc.

Lantus

MarkAnthony wrote: »

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.

After block insurance and electronic gates lifts are usually in the top three of the most expensive items in a development. If you have a lower number of units then the economy of scale drops and proportionally they become more expensive for each unit. Even so even a small lift can have an annual servicing contract of €1200-1500 subject to how comprehensive you want it to be as well as electricity costs and the mandatory phone line. €2500 is not an unreasonable budget sum, again for a small lift. Larger lifts the costs go up. On top of that you need to have sinking fund fee to account for the replacement of this item as they have a limited shelf life as with all mechanical items. The manufacturers typical recommended lifespan is 15 years. So you take the cost of the lift and all associated motors and equipment and control boards (say €25k for a very small one) and divide that over the 15 years say €1700 per year which also needs to be added to the service fee. So that's a single item cost of €4300 for a fairly small lift assuming that the sinking fund is maintained form day 1.

Larger lifts cost more and of course a lot of developments have woefully inadequate sinking funds which is going to hit very hard in the next 10 years after which most lifts will be in the 15-20 years age bracket and will probably need a major overhaul or even replacement.

Of course many developments need them! But they are expensive. Many people feel huge resentment over lifts as they generally take them for granted until they have to pay for them themselves when they suddenly realise they the costs are in the thousands and thousands and not the hundreds as they imagined.