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The Importance of Management Companies

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    #32
    anncoates
    Closed Accounts Posts: 13,925 ✭✭✭✭anncoates


    odds_on wrote: »

    On one estate I nearly bought a bungalow, one of the directors was paid 5k per annum and he was also a director of at least one other management company which paid him in excess of 7k. His total from 2 management companies is more than I get from my pension. To remove him is next to impossible as he has many friends who all bought several properties in the development thus has many friends to keep him in situ.

    I can only go by my company and two other companies (both of which have directors that I happen to know) but that's the first time I've heard of resident management company directors being remunerated?

    Is this common?

    Are the directors residents of the development or hired as outside directors? I've heard that the latter can be brought in if residents are not [prepared to go on to the board in which case they'll hardly do it for free.

    If it's resident directors being remunerated from management company funds, would this not have to be approved by residents at an AGM?

    And I assume any director can be removed in election if enough residents (that are entitled to vote) want them out.

    My personal experience is that 95% of residents like moaning about management companies but magically disappear when the chance presents itself to either try and remove incumbents or go on the board themselves.


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    #33
    odds_on
    Closed Accounts Posts: 1,869 ✭✭✭odds_on


    P. Breathnach wrote: »
    I can visualise circumstances in which such a small fund might be okay: if the sinking fund had been cleaned out in restoring everything to "as-new" condition. Then the management company should start building up the fund again. I can't imagine this being a plausible circumstance in the case you describe.

    At what stage in the process did you learn about the sinking fund?

    To my mind the important questions about management companies are:
    • administration of finances, including collection of management charges;
    • creation of a solid sinking fund and administering it in a prudent manner;
    • quality of general management of the property (which might be mainly a matter of appointing a good managing agent on a suitable contract).
    As far as my memory goes, there was also some 30k debts outstanding including retail outlets closed down on the ground floor.

    Anyway, I decide out was better even though the apartment was at a good price.


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    #34
    odds_on
    Closed Accounts Posts: 1,869 ✭✭✭odds_on


    anncoates wrote: »
    I can only go by my company and two other companies (both of which have directors that I happen to know) but that's the first time I've heard of resident management company directors being remunerated?

    Is this common?

    Are the directors residents of the development or hired as outside directors? I've heard that the latter can be brought in if residents are not [prepared to go on to the board in which case they'll hardly do it for free.

    If it's resident directors being remunerated from management company funds, would this not have to be approved by residents at an AGM?

    And I assume any director can be removed in election if enough residents (that are entitled to vote) want them out.

    My personal experience is that 95% of residents like moaning about management companies but magically disappear when the chance presents itself to either try and remove incumbents or go on the board themselves.
    The director/chairman, the secretary and the treasurer were each paid a fee - the chairman, 5k and the other two were much less - about 2k each.
    The two were both resident in the estate, but the chairman lives 2+ hours drive away. He invested in several properties (like many of the owners who rent out) and is, to the best of my knowledge, a solicitor by profession.

    The majority of owners are investors with several properties each and they seldom visit, let alone stay in any of their properties. Thus, they are happy to pay those on the board of directors.

    However, the estate is very well maintained with lots of green areas and the management charges are under 1k (insurance, lighting, open space maintenance, odd job man full time, bins), which I consider reasonable.

    One problem is that the chairman does not like to delegate work and does most of it himself.


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    #35
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    I know of a development in the city centre where directors do not pay management fees but do not receive remuneration. Personally I think that gives the directors a disincentive for getting value for money on budgets and fees seeing as they won't have to pay them. Same development is not in great nick either, about 15-20 years old so not a celtic tiger MC either.


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