Management Company

MugMugs

Folks,

My management company is run by a business. They take payment from the company for this service and deal with all the administration etc involved in the running of the company. I own my property and effectively all the management company do for me is cut the grass of the common areas and deal with vegetation etc therein. Lights and roads are with the council.

The fee is pretty low but I've done the maths from the accounts and I've worked it out that about 82% of my management fee goes towards the administration they're charging to cut the bloody grass.

I am not happy with their service however, I am not in a position to become a director of the company and make any changes.

Am I within my rights to request that they are compelled to re tender for the management company contract come the next AGM? I've made a request to them to do so and add it to the agenda however, they're refusing stating they have no need to tender for the business.

Can anybody set me right ?

4ensic15

What about insurance?

Paulw

MugMugs wrote: »

Folks,

My management company is run by a business. They take payment from the company for this service and deal with all the administration etc involved in the running of the company.

I am not happy with their service however, I am not in a position to become a director of the company and make any changes.

Am I within my rights to request that they are compelled to re tender for the management company contract come the next AGM?

The day to day running is normally done by a management agent. They do the work on behalf of the management company.

Why are you not in a position to become a director of your management company?

You can request that the position of management agent is put for tender, and this should be done, in writing, to the secretary of your management company, prior to the AGM. I am not sure if you can compel the company to retender for the management agent position.

Failing that, you could bring it up, at the AGM, under "any other business". You should also insist that it is minuted at the AGM.

ravima

As Paulw asks - why are you not in a position to become a director? I am always astounded at the poor turnout at AGM's of management companies. All owners should get involved with management of their blocks.

Lantus

Its unlikely those figures are correct even if your just a few houses and have only grass to cut.

The budget at the AGM should have all the figures in it on what you pay and the cost per unit which may vary by unit size.

You can request a motion to re tender but the directors make business decisions.

I'd be more interested in making sure the contract term was as low as possible, ideally 1 year but no more than 3 and that the contract was beneficial to the company in all respects.

Re tendering is a time consuming process to contact companies, review contracts, meet people, agree terms and so on. Like yourself the volunteer directors may not have an abundance of time and unless you can demonstrate that there is another company that is substantially cheaper your essentially just asking the team to embark on a re tendering process on a whim because you feel that the market price being paid is too high.

Maybe offer to work to get quotes from several companies, meet to agree the scope and work with the existing directors. At least they can review this?

davo10

I used to be on the board of our management company. Every single complaint we received about management fees for 10 years came from people who couldn't be arsed coming to the AGM, didn't understand the costs involved in maintaining the property and didn't understand the tendering process. The most overt maintenance carried out on the property is the grass cutting/landscaping, others less obvious are the insurance costs, lighting costs, electric gate maintanance, line painting of car spaces, gutter cleaning, painting common areas, carpet replacement in common areas, accountancy fees, legal fees, fees for sinking fund, and of course everbodies favourite, higher fees due to non payment of fees by some owners.

Op, every MC has a detailed set of accounts prepared before yearly subscriptions are calculated, you can request this from the management agent. But you should attend the AGM, every item which is to be tendered for is listed for discussion, the tenders are considered and then voted on by those present. If you don't like something, you have a platform and an opportunity to object. If you don't attend, once a quorum is met, you are allowing others to make decisions on your behalf, you can't complain if you don't turn up.

MugMugs

I'd rather not list out the reasons but I am not eligible to become a company director.


With respect to attending AGM's, I attend them. I can't stress enough to you that I own my property. I don't lease the ground nor share any element of my property with anybody else. My Buildings Insurance covers all liability associated with my property and myself. The roads and footpaths are under the control of the council. Lighting is under the control of the council. THe only benefit that I receive is gardening of common areas by the management company.

What's getting to me is that when worked out through the breakdown of accounts and charges, the amount being charged to the management company is quite high. I get that there has to be a sinking fund, bind sheds, upkeep of apartments etc. I am not a factor in any of this though. My property is absolutely maintained by me in full as is my responsibility because it's not shared, it's mine. As is my garden, back garden, shed, my bins outside my back door, my ladder to the side of my home which I clean my windows with. None of the other management company costs are as a result of me.

My correspondence to the agents is generally ignored. I'll write to the secretary asking that this and "Any other business" be added to the agenda. I've asked them to add Any other business to the agenda for some 9 years now and they've never obliged. 10th time the charm

4ensic15

MugMugs wrote: »

I'd rather not list out the reasons but I am not eligible to become a company director.


With respect to attending AGM's, I attend them. I can't stress enough to you that I own my property. I don't lease the ground nor share any element of my property with anybody else. My Buildings Insurance covers all liability associated with my property and myself. The roads and footpaths are under the control of the council. Lighting is under the control of the council. THe only benefit that I receive is gardening of common areas by the management company.

What's getting to me is that when worked out through the breakdown of accounts and charges, the amount being charged to the management company is quite high. I get that there has to be a sinking fund, bind sheds, upkeep of apartments etc. I am not a factor in any of this though. My property is absolutely maintained by me in full as is my responsibility because it's not shared, it's mine.

My correspondence to the agents is generally ignored. I'll write to the secretary asking that this and "Any other business" be added to the agenda. I've asked them to add Any other business to the agenda for some 9 years now and they've never obliged. 10th time the charm

Are you a freehold owner? What sort of covenant obliges you to pay the management company?

caviardreams

Are there apartments in the same development as your own house? If so often fees are averaged out for all services, across all units, in teh same way that those on the ground floor still have to pay for lift servicing, and those without cars still have to pay for car parking etc.

Is your concern that you are subsidising/paying for the maintenance/service charge of the apartments where there are more "common" services e.g. bins, insurance etc., when you own a house which does not need such services?

kieran.

Is this a housing estate or an apartment complex ?

If the council has taken over the development what exactly is the management company managing?

Are you sure its not a residents association?

SozBbz

I am a director on my management company. The development is a mixture of both houses and duplexes/groundfloor apts.

We go through our budget line by line at our AGM. If anyone (director or ordinary member) has an issue with any line item, we as the Management Agent to seek an alternative price from another vendor. We also break the budget down into two seperate parts (and indeed have two separate sinking funds) for houses and apartments. Everyone contributes to the common areas, public liability insurance, bins, lighting, gardening etc. Only the apartment owners pay towards and costs which are specific to the apartments, ie block insurance, maintenance of balconies etc. Its very fair in my view, and I think our MA do a good job.

You have to be able to raise this with your Management Company, I don't believe that if done properly this can be ignored.

However, even if you are a house owner in the above scenario, you did buy into a multi unit development and are bound to contribute as the Management company see fit. For whatever reason, you dont want to/can't be a director, but maybe talk to your neighbours and see if others agree that you're not getting good value, and again push at the next AGM.

I have to say however, that I find your post quite frustrating. You can't just buy into a MUD and then expect the rules to not apply to you whilst simultaneously not participating in order to effect change if you think things could be done more efficiently.

Also, why do you have your own bins when you mention bin charges in your post? Why not use the bin sheds provided?

MugMugs

SozBbz wrote: »

I am a director on my management company. The development is a mixture of both houses and duplexes/groundfloor apts.

We go through our budget line by line at our AGM. If anyone (director or ordinary member) has an issue with any line item, we as the Management Agent to seek an alternative price from another vendor. We also break the budget down into two seperate parts (and indeed have two separate sinking funds) for houses and apartments. Everyone contributes to the common areas, public liability insurance, bins, lighting, gardening etc. Only the apartment owners pay towards and costs which are specific to the apartments, ie block insurance, maintenance of balconies etc. Its very fair in my view, and I think our MA do a good job.

You have to be able to raise this with your Management Company, I don't believe that if done properly this can be ignored.

However, even if you are a house owner in the above scenario, you did buy into a multi unit development and are bound to contribute as the Management company see fit. For whatever reason, you dont want to/can't be a director, but maybe talk to your neighbours and see if others agree that you're not getting good value, and again push at the next AGM.

I have to say however, that I find your post quite frustrating. You can't just buy into a MUD and then expect the rules to not apply to you whilst simultaneously not participating in order to effect change if you think things could be done more efficiently.

Also, why do you have your own bins when you mention bin charges in your post? Why not use the bin sheds provided?

You see, you're either not buying what I am selling or I am not being very clear.

I own my home. It's my home. The front garden and driveway right back to the back garden are mine. Under my control. My everything. The roads and the footpaths and street lighting are under the control of the local CoCo. There are apartments in the estate that I live.

There is NO sinking fund for my property. It is my property. There are no bins offered for my property. The bin sheds are not for me to use. I have no desire to use them. I have sufficient room within the boundaries of my property to store and secure my own bins and have a contract with a local waste company.

It's all me.

The only and I cannot stress this to you enough, the ONLY exposure that I attract for the management company is the upkeep and maintenance of the green areas within the boundary of the estate.

I have no issue with a management company being in situ. It doesn't bother me. The estate looks well all of the time and hats off to them

However

I will go back to my initial point. A point I need you to be very clear on.

When calculated out, 82% of the money I pay for my management fee is paid to the agents acting on behalf of the Management company.

Not to the gardeners. Not to anybody else for any other service but to the agent acting on behalf of the company. THAT bothers me. I think we're being ripped off.

My question was, can I and if so, how can I insist that the Agent acting on behalf of MY company tenders for the business of the estate.

I am far from bitching from the sidelines.

I've got 25 e-mails to the agents since April for various reasons and 4 responses.

I've got 12 Phone calls since January and I am still waiting for a return call.

Michael D Not Higgins

MugMugs wrote: »

When calculated out, 82% of the money I pay for my management fee is paid to the agents acting on behalf of the Management company.

How did you calculate this? Did you take the grass cutting cost alone and divide by the number of properties to come up with the individual's contribution to grass cutting and assume the rest goes to the management agent?

Could it be that you are (fairly or unfairly) also contributing to the other costs for the management company? This is something that should be explained in the accounts and/or AGM, especially if you're paying the same as the apartment owners.

CeilingFly

The costs are more than a little landscaping

From my own experience in development of houses only

1 - Public Liability insurance for open space areas. (was about €1000 for small estate of 9 houses)

2 - landscaping (was about €1500 a year)

3 - maintenance of roads & lighting (surprised that you say council do that - I'd check that out)

4 - Preparation of accounts & audit though audit is no longer required since 2015. Was circa €2,000 and about 40% of fee.

5 - Sewage

6 - Sinking fund


If you say that council take charge of lights & roads & sewage, thne maybe the estate has been "taken in charge" and just landscaping is being done on a volunteered basis by the residents. In that case you may just need a residents association and pay an independent contractor to do the works.

As a member you should get a copy of the accounts and this will detail all the expenditure.

Failing that, as a member you can bring a proposal to floor of next agm and suggest that member could save substantially be looking at alternatives. Usually such proposal would be proposed 4 weeks before the agm to allow for proxy votes.

MugMugs

Michael D Not Higgins wrote: »

How did you calculate this? Did you take the grass cutting cost alone and divide by the number of properties to come up with the individual's contribution to grass cutting and assume the rest goes to the management agent?

Could it be that you are (fairly or unfairly) also contributing to the other costs for the management company? This is something that should be explained in the accounts and/or AGM, especially if you're paying the same as the apartment owners.

No, I took the amount of properties on site, asked if the fee charged by the agent for all properties irrespective of status was equal, was advised it was, divided the amount paid to the agent by the number of properties and got my magic number.

Michael D Not Higgins

MugMugs wrote: »

No, I took the amount of properties on site, asked if the fee charged by the agent for all properties irrespective of status was equal, was advised it was, divided the amount paid to the agent by the number of properties and got my magic number.

The management agent isn't pocketing your extra cash, you're effectively subsidising the apartment owner's fees. You should definitely come up with a two level fee structure for apartments and houses. You should speak to some of the other house owners to get them on side ahead of the AGM.

davo10

Unfortunately, in my experience this is the usual case when owners are unhappy with the decisions of MC, lack of understanding and/or lack of participation.

Op, if your development has an MC, a sinking fund is not voluntary, it is a legal requirement under the MUD Act, all property owners have to paid in to it.

Also, there are always owners who say they don't use the common areas/bins etc so why should they have to pay, the amounts paid out are discussed at the AGM, that is the time to question the tendering process and put forward alternative proposals.

Op, I'd really like to know how you came up with an 82% figure, if that amount/percentage was on the MC balance sheet at an AGM there would be uproar. Also, bare in mind that you can propose a motion at the AGM to remove the managing agent and tender for a new one.

I understand your frustration and the MA should have been more forthcoming, but there should also be board members, a chairman & secretary who are most likely fellow residents, ask them.

I suspect there is more to this than you are letting on, the fact that you cannot be a director suggests there is some history.

pwurple

I'm a director of a management company. Ditto what everyone else has said, and beyond public area maintenance and insurance, don't underestimate the substantial amount of administration required in invoicing, collecting, setting up AGMs, minuting them, posting that stuff out, etc. You've sent out 25 phonecalls and 14 emails, and expect them to be attended to, without an administrator of some kind? How much does admin staff cost, I bet it's cheap at your rate.

Our management company none of the directors take a fee for their time (which I f-ing should by the way, it's a right time-suck), and the management agent themselves takes a very paltry fee. Chasing the gob****es who make life hard for the staff is a part time job in itself.

Raise your point at the AGM, or better still, talk to your neighbours or the other directors offline and address your concerns in a civil manner.

Ayuntamiento

In our small estate of houses we elect home owners as directors, etc of our management company and they voluntarily collect the management fees and distribute the money according to the list of priorities decided at the AGM.
So we do not employ some kind of outside agent to run the show for us. It really cuts down on costs. Our only real 'unnecessary' expense is the employment of an auditor to look over the accounts.
We are lucky to have no apartments in the mix, an almost 100% rate of compliance with the management fee and the engagement of interested homeowners. We are Dublin based but we make it work.

caviardreams

davo10 wrote: »

Op, I'd really like to know how you came up with an 82% figure, if that amount/percentage was on the MC balance sheet at an AGM there would be uproar. Also, bare in mind that you can propose a motion at the AGM to remove the managing agent and tender for a new one.

I am guessing the OP pays (for example) €200 in management fees say, and grass cutting works out at €36 (18% of the fee), leaving 82%, and the OP doesn't receive any other "tangible" services like bins, heating etc. However as others point out, there are accounting fees and admin costs etc. which also need to be paid for the development as a whole. Did your 25 emails relate solely to grass cutting, or other administrative issues? If it's the latter, then you are availing of administrative services which are also a service that needs to be paid for.

Lantus

I would imagine that houses outstrip apartments by volume. For the agent to better balance the fees he has suggested equal management agent fee split to all units. This is unfair IMO. Apartments consume nearly all the time due to their complexity. There is no framework to prevent this except for pressure on the company by the unit owners.

davo10

Op, I've just looked at the articles of memorandum for our MC, it states that those in arrears of fees are restricted from voting at AGM and from serving on the board. Are you in arrears and is it possible that the MC are ignoring your enquiries until fees are paid?

April 73

Lantus wrote: »

I would imagine that houses outstrip apartments by volume. For the agent to better balance the fees he has suggested equal management agent fee split to all units. This is unfair IMO. Apartments consume nearly all the time due to their complexity. There is no framework to prevent this except for pressure on the company by the unit owners.

I agree with this. It reads to me as if the OP only benefits from grass cutting & landscaping (and public liability insurance, accountancy, fee collection & admin I presume) but pays the same portion of the managements agent's fees as the apartments do.
It's not a truly fair split but if that's the way the company is setup then it will require agreement from members to change it.

The OP did mention that the fee is low & the place is well looked after. There seems to be a lot of stress, time, emails & phone calls going into this. How much would you save OP if the agent's fees were rebalanced? If you include that you still have to pay a portion of the agent's fees for organising the contractors, collecting fees, doing admin, organising insurance, facilitating the AGM etc. You'll still have to pay something in agent's fees. Is it worth the effort?

Paulw

Normally, your management fee is a set percentage of the overall management company budget. This is specified in your contracts, that were signed when you bought the property.

So, all you need to do is get the total budget for the development and then calculate your fee, based on the percentage.

In the same way, the agent fee would be part of the overall budget, so you should be paying the same percentage of that, as you do for every item in the budget.

Go back and check your contracts, and then the budget from the AGMs.

jd

April 73 wrote: »

I agree with this. It reads to me as if the OP only benefits from grass cutting & landscaping (and public liability insurance, accountancy, fee collection & admin I presume) but pays the same portion of the managements agent's fees as the apartments do.
It's not a truly fair split but if that's the way the company is setup then it will require agreement from members to change it.

An application can be made to the Circuit Court under section 24 of the Mud Act if the the OP feels the apportionment of service charges in unfair.

There may be other remedies under section 24 too

http://www.irishstatutebook.ie/eli/2011/act/2/section/24/enacted/en/html#sec24

Lantus

Paulw wrote:

Normally, your management fee is a set percentage of the overall management company budget. This is specified in your contracts, that were signed when you bought the property.

It's not always a percentage. The lease (from memory) for us specifies that all common area costs are paid by everyone but common building costs are paid by the apartments only. An agents fee is neither and so can be applied equally between all after such costs are apportioned. In reality houses require very limited management though. It's another loop hole an agent can use as the agents fee will not be part of a lease agreement in the same way generic company costs won't be mentioned.

JustLen

There is more to this than meets the eye would be my bet. Just doesn't all add up.

Lantus

jd wrote:

An application can be made to the Circuit Court under section 24 of the Mud Act if the the OP feels the apportionment of service charges in unfair.

Unless it can be proven it's unfair and it has the backing of multiple owners this route is unproven, expensive and risky. I don't believe there has been a single application under sec 24 since the act came in unless anyone has evidence of such?

MugMugs

JustLen wrote: »

There is more to this than meets the eye would be my bet. Just doesn't all add up.

Nah, it really isn't. There's plenty of speculation and talk of smoke and mirrors. Crux is I am not in arrears, I own my property, I benefit in terms of common areas. I feel the money being paid to the agent is too high, I made the mistake of seeking advice on boards and expecting a relatively straightforward yes or no.

Cheers folks.

davo10

MugMugs wrote: »

Nah, it really isn't. There's plenty of speculation and talk of smoke and mirrors. Crux is I am not in arrears, I own my property, I benefit in terms of common areas. I feel the money being paid to the agent is too high, I made the mistake of seeking advice on boards and expecting a relatively straightforward yes or no.

Cheers folks.

Nothing is ever as straight forward as yes and no, the advice you receive will depend on the info you provide. The reason why you cannot be a board member may impact on the reason why your enquiries are being ignored. Your calculations simply don't stack up, a low yearly fee where the MA takes 82% just doesn't make sense to anyone with knowledge of how a MC works and the fees involved in maintaining any development.

There are at least four posters here with experience of MC boards who can give you insight into costs like sinking funds/insurance/lighting etc which you know nothing about.

We try to help by explaining how a MC works.

TooObvious

OP - can you let us all know how your portion of the service charge (S/C) is calculated and whether the s/c has been split to reflect costs attributable to the apartments and those attributable to the overall estate? It seems that many of the posters on this thread have difficulty understanding how you are compelled to pay a service charge if you 100% own your property in your estate? Can you perhaps quote us the covenant contained within your lease/title documents which states this?

From my own experience, the majority of house owners in my estate would make the same argument as you - however when you look at the title documents for each property they will find that they own the property under a 999 year lease, and there is a rent fee of £1/€1, or some other nominal fee, which is generally not collected by the Management Company (though in my view should be).