Why pay managment fees

quadrifoglio verde

Op is it an estate consisting of apartments and houses, just houses or just apartments

If it's just apartments it's very cheap, if it's houses it's very expensive and if it's a mixture, there's a good chance the house owners are subsidising the apartment owners

Paulw

quadrifoglio verde wrote: »

If it's just apartments it's very cheap, if it's houses it's very expensive and if it's a mixture, there's a good chance the house owners are subsidising the apartment owners

No one is subsidising anyone. You sign a legal contract to be part of the management company and your fees (or usually your percentage of the whole management company fee) are clearly displayed in the contracts.

Also, there is no way to know if fees are cheap or expensive, without fully knowing the makeup of the development and how fees are spent.

Blanket statements like this cause more anger and confusion and don't help anyone constructively.

Delacent

I used to manage a small omc in a estate of 10 houses.

Annual fee was €900.

Main expense was

Public liability insurance for common areas - €800

Common area maintenance - grass cutting etc, - €1,200

Lighting - €1000

Sinking fund - €2-3000

Repairs - was usually about €1000 a year - includes any sewage issues, lighting issues, potholes, additional one-off landscaping etc.

Audited accounts (obligatory until last year) €1500.

All costs include vat which was not reclaimable as it was not vat registered.

If there were apartments, then building insurance (not contents) would also be included as would cost of maintaining interior common areas.

Mrs OBumble

Yourself isit wrote: »

Well,then. Go to the AGM.

The OP is not an owner, so has no automatic right thing to attend, unless the parents nominate him/her as their proxy.

I dont know if most management companies allow spectators at their meetings, but i doubt it.

If the property owners really did share all their financial information with the OP, then s/he should already be well aware of the company's accounts and what the money is spent on.

Yourself isit

Mrs OBumble wrote: »

The OP is not an owner, so has no automatic right thing to attend, unless the parents nominate him/her as their proxy.

I dont know if most management companies allow spectators at their meetings, but i doubt it.

If the property owners really did share all their financial information with the OP, then s/he should already be well aware of the company's accounts and what the money is spent on.

We had already discussed being a proxy in my previous reply.

c montgomery

Tea drinker wrote: »

This. The most common issue with these funds is a low or non existent sinking fund. I think any "cowboys" taking people for a ride got outed post celtic tiger.

Indeed, we try to have 1.5 times annual collected fees in the sinking fund.
I have seen developments where the sinking fund is zero.

CIARAN_BOYLE

c montgomery wrote: »

Indeed, we try to have 1.5 times annual collected fees in the sinking fund.
I have seen developments where the sinking fund is zero.

In a previous job we audited management companies. Our rule was the company had to have sufficient funds in the sinking fund.

Our rule was

If it's apartments and there is a lift the company needed 10k. We had a list of other features in common areas and we added up what was relevant.

Tea drinker

Paulw wrote: »

No one is subsidising anyone. You sign a legal contract to be part of the management company and your fees (or usually your percentage of the whole management company fee) are clearly displayed in the contracts.

Also, there is no way to know if fees are cheap or expensive, without fully knowing the makeup of the development and how fees are spent.

Blanket statements like this cause more anger and confusion and don't help anyone constructively.

Depends, some of the apartment owners get away with paying nothing, even now with sky high rents. We are subsidising them. It's a legal issue.
I also pay a much higher fee than the smaller apartments.... so I'm getting boned there too.

Paulw

Tea drinker wrote: »

Depends, some of the apartment owners get away with paying nothing, even now with sky high rents. We are subsidising them. It's a legal issue.
I also pay a much higher fee than the smaller apartments.... so I'm getting boned there too.

Your fees are a set percentage of the overall budget. It doesn't change depending on who pays and who doesn't. Those who don't pay must eventually pay, either through court proceedings or when a property is sold. How the fees are gathered depends on how your management company decide on how to pursue those fees.

Again, the amount you pay is a fixed rate, which is clearly stated in your contracts. Their rate is also fixed. While it will be different, it is what you legally agreed to when you signed the contracts and bought.

You pay a higher fee based on the contracts you signed, normally based on the floor space or similar of your place.

So, please understand how a management company is funded and what everyone's legal obligation is. Read your own contracts and you will see how your fee is arrived at, combined with your company budget, as detailed at your AGM.

There are only two things you need to understand - the overall fee for the whole management company budget, and what percentage of that you are legally obliged to pay.

Del2005

quadrifoglio verde wrote: »

Op is it an estate consisting of apartments and houses, just houses or just apartments

If it's just apartments it's very cheap, if it's houses it's very expensive and if it's a mixture, there's a good chance the house owners are subsidising the apartment owners

We don't know if the complex has electric gates or what other expensive items are in the development, I know when I was looking to buy I avoided anywhere with lifts, electric gates and underground parking as these make the management fees high.

We also don't know if they have been paying the same amount since they bought or if it's just this year that is high. The MC could be trying to build its sinking fund if it wasn't doing it before.

But as said all these will have been sent to the OPs parents. So the first thing they should do is to read the minutes of the AGM and the accounts that their parents received.

andekwarhola

I'm an unpaid resident director on a management company. I'd be interested about how I could make a living from it by being a 'suit'.

Can you elaborate on that part from your obvious position of expertise?

Sleeper12

I'm not a fan of management fees. To me it's a continuation of the old ground rates we used to pay but you agree to pay it when you buy the property. I don't get the winging years later.
The fees usually include parking. I see some companies are thinking outside the box and are clamping people who won't pay.

Joe222

Can anyone tell me is there an easy to understand booklet out there that lays down the do's and the don'ts of running a management company.

I have seen the MUD Act but much of it refers to company law (endless pages to read) with very little finer detail, e.g.

How are common areas designated, e.g. if A has a bigger area outside their apartment than B is B entitled to use the space outside A's apartment and let's say put their bike there or their barbecue. Where does the occupier's entitlement to personal space outside their property extend, e.g. to put their own table and chairs.

Are all fees laid out in purchase contracts? If contracts are lost would the sale solicitor have them?

How is voting decided at meetings? Is it majority rule?

What should be in house rules?

Thanks

Del2005

Joe222 wrote: »

Can anyone tell me is there an easy to understand booklet out there that lays down the do's and the don'ts of running a management company.

I have seen the MUD Act but much of it refers to company law (endless pages to read) with very little finer detail, e.g.

How are common areas designated, e.g. if A has a bigger area outside their apartment than B is B entitled to use the space outside A's apartment and let's say put their bike there or their barbecue. Where does the occupier's entitlement to personal space outside their property extend, e.g. to put their own table and chairs.

Are all fees laid out in purchase contracts? If contracts are lost would the sale solicitor have them?

How is voting decided at meetings? Is it majority rule?

What should be in house rules?

Thanks

You either have a balcony or terrace for your own use, everywhere else is common areas so you can't store anything there unless it is designated as a storage location ie bike racks.

Fees change every year. You get a copy of the accounts and voting would be layed out in the company documents.

Samuel T. Cogley

andekwarhola wrote: »

I'm an unpaid resident director on a management company. I'd be interested about how I could make a living from it by being a 'suit'.

Can you elaborate on that part from your obvious position of expertise?

To be fair, although smartly dressed I can never remember if he's in a suit or not - our managing agent is very well remunerated and functions as the OMC's company secretary. Worth every single penny and more though.

So I think it's some sort of qualification and running your own business, which will involve dealing with quite a few nutters and many, many whingers.

Your, rather amusingly put, point though is well made.

Joe222

Del2005 wrote: »

You either have a balcony or terrace for your own use, everywhere else is common areas so you can't store anything there unless it is designated as a storage location ie bike racks.

Fees change every year. You get a copy of the accounts and voting would be layed out in the company documents.

Not every development has a balcony/terrace for each unit. Some I have seen have a common outside balcony but some units have more space outside their door than others.

Can anyone answer the other questions I posted above?

If there is a lift or a security gate in the development does everyone in the mgt company have to pay into its service?

What about bins? If someone says they dispose of their own waste can they exempt themselves from that fee?

I wish this stuff was written down somewhere as contracts don't mention this stuff in detail and neither does the MUD Act. It seems to leave it upto the mgt company to make house rules.

Paulw

Every unit owner makes up the management company. "They" don't make up rules.

Normally these "house rules" are actually terms of contract - made from the Lease Contract signed when buying. So, people need to read this Lease Contract, and any other contracts they signed when buying their property. They also should read the Articles of Association of their management company.

Every development is different. Every company is different. Different things apply to some companies and not others. Gates, bins, common area, etc will all differ.

There are no separate fees. There is one fee - your management company fee. What you pay is a percentage of the total budget for running the company for the year. You can't pick and choose what parts you would like to pay and what you wouldn't. You are legally bound to pay your management fee, no matter what it is made up of.

Everything is written down. Everything is covered by documentation and law.

Samuel T. Cogley

Joe222 wrote: »

Not every development has a balcony/terrace for each unit. Some I have seen have a common outside balcony but some units have more space outside their door than others.

Can anyone answer the other questions I posted above?

If there is a lift or a security gate in the development does everyone in the mgt company have to pay into its service?

What about bins? If someone says they dispose of their own waste can they exempt themselves from that fee?

I wish this stuff was written down somewhere as contracts don't mention this stuff in detail and neither does the MUD Act. It seems to leave it upto the mgt company to make house rules.

I'm going to trademark the following term as I use it some much.

YOU are the management company. (TM)

There is nothing to stop YOU exercising your vote that blocks without lifts should not have to pay for them, for example. I raise it every year that people on the ground floor in two of our blocks shouldn't have to pay for the lifts. I honestly don't care, it would actually cost me money but I'm a director with our OMC sdo feel if it's said to me it should be raised.

Every year I raise it, every year the people that ask me to raise it don't turn up to the AGM to vote on it. It would literally take 2 or 3 people to carry the vote in a complex of almost 200 units where the same 8 or 9 people turn up every year. (Assuming it doesn't need a special resolution or unanimous vote, which it might come to think of it.)

If you don't want to live on a managed complex/estate don't move into one, simples!

gerarda

We recently sold our first house and always paid mgmt fees (cannot sell otherwise). Our neighbours of 10 years never paid a cent and was wondering if this will eventually catch up with them? He was contacted by the company who threatened him with a court appearance, that was 4 years ago and it never happened.

Samuel T. Cogley

gerarda wrote: »

We recently sold our first house and always paid mgmt fees (cannot sell otherwise). Our neighbours of 10 years never paid a cent and was wondering if this will eventually catch up with them? He was contacted by the company who threatened him with a court appearance, that was 4 years ago and it never happened.

We have a very small number of people that don't. I'll admit it's satisfying seeing our managing agent get every cent out of them and interest when they're selling.

Unless it gets chronic, we've found it better to wait it out and deal with it at the selling stage. In many cases people aren't in a position to pay them and as the old adage goes, you can't get blood out of a stone.

Paulw

Libertarian Kant wrote: »

There is nothing to stop YOU exercising your vote that blocks without lifts should not have to pay for them, for example. I raise it every year that people on the ground floor in two of our blocks shouldn't have to pay for the lifts.

You legally can't do that. Read your contracts and you will see why. I've already explained it in this thread.

Paulw

gerarda wrote: »

We recently sold our first house and always paid mgmt fees (cannot sell otherwise). Our neighbours of 10 years never paid a cent and was wondering if this will eventually catch up with them? He was contacted by the company who threatened him with a court appearance, that was 4 years ago and it never happened.

Court cases can take a few years, between the initial filing and it being heard. It is a slow process.

We have been down that road, and successfully won the cases we did take to court. We won the amount due, plus all associated costs.

It just takes a persistent board of directors and good solicitors to chase and chase until you get the win.

Even without that, they cannot sell without a final settlement of fees.

Samuel T. Cogley

Paulw wrote: »

Court cases can take a few years, between the initial filing and it being heard. It is a slow process.

We have been down that road, and successfully won the cases we did take to court. We won the amount due, plus all associated costs.

It just takes a persistent board of directors and good solicitors to chase and chase until you get the win.

Even without that, they cannot sell without a final settlement of fees.

May I ask if you had any luck with enforcement?

Paulw

Libertarian Kant wrote: »

May I ask if you had any luck with enforcement?

Agreed payment plans, more than 120% of annual fees, so the money is coming in. One is almost up to date now after 7 years of paying nothing, and that was after court two years ago.

Getting payment, even slowly, is better than nothing, and the outstanding fees are a sinking fund.

riclad

Most estates have no management fees,
people buy a house in an managed estate cos they want to live in a certain area,
the houses may be abit cheaper than a house managed by the council .
if its a standard semi d house.
if someone is buying a house in a posh area for 500k they can afford to pay management fees.
Theres no one making a big profit on management fees,
pipes break and leak, roads need maintenance ,grass has to be cut
Apartments need a sinking fund for large repairs, eg new entrance doors,gate locks , lights for common areas etc .

andekwarhola

Libertarian Kant wrote: »

May I ask if you had any luck with enforcement?

Had to bring in temporary clamping (now rescinded) and make bin sheds key-only. Also a (very small) number of debtors are at the legal stage but it is a very long process. People can arrange payment plans, it's only the people that have not paid for years get taken to court.

Nobody wants to do horrible stuff like this but the amount of people that live in managed estates that either don't or won't understand how it works. You buy a managed property and legally agree to fees. A number of things like lighting, common area insurance and cleaning, sinking fund (now a legal requirement), bins, landscaping/tree maintenance, (if applicable) lifts, car park, gates etc need to be paid for. You decide fees every year to cover all these liabilities. People pay fees. It's not rocket science or a scam.

If certain services, like house painting, are on the agenda and not being provided, I'd hazard a guess there's no money to do so which means the fees have to be raised (or actioned as a once-off charge ) or that everybody has to comply with their agreed fees.

As said, it's not rocket sicence, it's just like a household budget. Money comes in and you get what you pay for.

Also as pointed out, a house sale can't technically be signed off without settling outstanding fees to the mangement company.

Samuel T. Cogley

Paulw wrote: »

You legally can't do that. Read your contracts and you will see why. I've already explained it in this thread.

Poor example on my part, the point I'm making is if people don't like a certain thing turn up and vote. They can certainly raise the issue of fees and have a line by line discussion.

However I believe that changes like the one I have outlined above can be made with unanimous consent (I concede you'd never get it).

Libertarian Kant

Libertarian Kant wrote: »

. I raise it every year that people on the ground floor in two of our blocks shouldn't have to pay for the lifts.

This is normal abroad.

I know of one apartment block abroad where the lift payments were on a sliding scale depending on the floor. The guy on the sixth floor paid twice what the guy on the third floor paid.

Samuel T. Cogley

Deleted User wrote: »

This is normal abroad.

I know of one apartment block abroad where the lift payments were on a sliding scale depending on the floor. The guy on the sixth floor paid twice what the guy on the third floor paid.

Novel solution, next time I'm told we're not doing anything about the lift payment and the roof example is cited - I might suggest this as an option for who pays for the roof.

Paulw

Libertarian Kant wrote: »

Novel solution, next time I'm told we're not doing anything about the lift payment and the roof example is cited - I might suggest this as an option for who pays for the roof.

Again, not likely to be legal in Ireland. Your contracts say how much you pay, not what services you can and can't pay for.