Are you legally obliged to pay management fees to a co looking after apartment cmplx?

Re: Management Companies?

room305 said:
However, many posters here seem to think it is a simple matter to fire the existing directors and appoint new ones and then find a new property management company to manage the running of the estate. Speaking as someone going through this process at the moment I can tell you it most certainly isn't.
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Agreed, it certainly isn't that simple in all cases, and another issue is the fact that owners can be denied the opportunity to apply for planning permission to make any changes to their development, and can be limited to services of the developer's choosing, such as cable TV etc.

Although it may be possible to fire directors, there doesn't appear to be any way to take de facto control from the developer until such time as they want to hand over the development. This is the area that needs to be addressed IMHO.
 
Re: Management Companies?

CCOVICH said:
But I have not heard anyone saying they are getting nothing for their management fees.
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Well, I have since sold the house and moved on - but I was forced to pay management fees (I only did it twice, once to get the keys, once to be able to sell it) and received nothing in return. The management company's accounts confirmed this. "Income: X. Expenditure: 0. Net profit: X"

People did stop paying, and got weekly threatening letters.

I'm sure my solicitor explained to me that the initial management agent would be appointed by the developer and that later we would have the option to vote for directors who would have the power to change management agent if desired - and I'm sure I nodded.

But should I have been expected to ask: "What should I do if the developer forms a shelf company, coincidentally using the name and phone number of his solicitor, and appoints them as the management agent, who then does nothing? What then?" No - I had no knowledge of the area and therefore couldn't have been expected to forsee the possible problems.
 
Re: Management Companies?

exile said:
Well, I have since sold the house and moved on - but I was forced to pay management fees (I only did it twice, once to get the keys, once to be able to sell it) and received nothing in return. The management company's accounts confirmed this. "Income: X. Expenditure: 0. Net profit: X".
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Fair enough-there was no maintenance of common areas etc., refuse collection? Did you ask why you were paying the fees? (I'm genuinely interested)
 
Re: Management Companies?

CCOVICH said:
Fair enough-there was no maintenance of common areas etc., refuse collection? Did you ask why you were paying the fees? (I'm genuinely interested)
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Refuse collection for the houses was done by the council - normal situation of buying tags in Spar and attaching them to the bins. I'm not sure about the apartments - possibly they had black bins too that the council collected?

The common areas around the houses were maintained by ourselves. Some of the larger areas sometimes became fairly unkempt - I think the builder (who was still in the locality) may have sent someone to cut them every few months.

After paying the initial fees we got a letter after one year saying "We haven't spent any of that yet, so no fees this year." I thought - very well. The following year when they did ask for fees (but had still not spent any of the initial money) I was already selling the house and ignored the letters until such time as the house was sold and I found my solicitor had paid it - I guess he had to. I know some of my neighbours were trying to rectify the situation at that point.
 
Re: Management Companies?

Another problem is that you cannot choose your neighbours. Some people simply don't want to pay management fees fullstop. This can exacerbate existing problems. When it comes to getting rid of the management agents, they tend to want money before they will switch. Likewise when it comes to selling, as exile mentioned, if you don't pay up you cannot sell.

Imagine a situation where you moved into a new apartment and ordered a phone line. From sheer incompetence the phone company failed to install the phone line but they kept sending you regular bills (although they refused to give any details or breakdown on what the money was for). Later you went to sell your house but the solicitor blocked the sale until the phone company's bills were paid.

People living in estates where the management company is a sham are not powerless but is very difficult to find people who will agree to be nominated as directors, deal with the legal hassle etc.

New house owners who are buying houses should be given a charter for what the management company is supposed to do. That way both sides can know what is supposed to be done and where any faults will lie.
 
Re: Management Companies?

Hope someone would answer my queries:-
1. How could we make the management agent accountable for what we pay and what we get?
2. If the residents feel that they are paying too much , how to review the management fee?
3. How can the residents take a decision to change the management agent, by vote?
4.Once the property is handed over is there any role for the developer who built the estate?
 
Re: Management Companies?

ITGuru said:
1. How could we make the management agent accountable for what we pay and what we get?
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The management agent is contracted/employed by the management company to carry out the day to day management/maintenance of the development. the management company (i.e. the board of directors representing the shareholders/members) can hire and fire these and monitor their work as required.
2. If the residents feel that they are paying too much , how to review the management fee?
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Raise the issue at a general meeting. Get elected to the board and get involved in the detailed setting and review of budgets and annual charges.
3. How can the residents take a decision to change the management agent, by vote?
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If necessary I presume that they can call an EGM to deal with the matter.
4.Once the property is handed over is there any role for the developer who built the estate?
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Handed over to whom?
 
Re: Management Companies?

room305 said:
Another problem is that you cannot choose your neighbours. Some people simply don't want to pay management fees fullstop.
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Then it's up to the management company (often via the agent that they contract) to chase up these legally enforceable debts. The usual reminders, final reminder and solicitor's letter can be required.
 
Re: Management Companies?

CCOVICH said:
To either the local authority (not likely for apartments) or to the owners.
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OK - after the development is handed over to the LA then, as far as I know (there's a recent thread on this), the bond lodged with the LA by the developer is only refunded to the developer if/when it is clear that all relevant work (e.g. connections to utilities etc.) is completed to a satisfactory standard. If corrective/remedial work is required then the LA will take money out of the bond to do it if necessary. After the development is handed over to the owners then presumably the developer is liable (as normal) for major issues that arise for a period thereafter and, if necessary and relevant, Homebond may also get involved.

That's my general understanding anyway.
 
Re: Management Companies?

ClubMan said:
After the development is handed over to the owners then presumably the developer is liable (as normal) for major issues that arise for a period thereafter and, if necessary and relevant, Homebond may also get involved.
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I wouldn't necessarily assume that to be the case-I would have thought that the owners would be liable for any issues not covered by Homebond.
 
Re: Management Companies?

Yes - that (the owners and/or their insurance company) would be the third level possibility after the developer and Homebond (where applicable).
 
Re: Management Companies?

ClubMan said:
Then it's up to the management company (often via the agent that they contract) to chase up these legally enforceable debts. The usual reminders, final reminder and solicitor's letter can be required.
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It gets very messy. On the one hand you sympathise with people not wanting to pay for a service they have never received. At the same time, you want to get rid of the agent because they are incompetent. The agent can then claim that because some people did not pay fees they were unable to perform their duties. They will also want this money before signing over the company (if we want to employ someone else to do the job).

Then there is nothing to say the entire process won't begin again once we get a new agent in.
 
Re: Many members act as management company agents !

ITGuru said:
I dont think anyone "sane" would buy a 20 year old property for 360K when a new one is available for the same price.
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I'm sorry, but I wouldn't go near a new development with a property management company. I would much prefer an older house that's management free than having to put up with letters being dropped through your letterbox demanding extortionate amounts of money and/or nosey idiots with clip-boards appearing on your doorstep telling you what you "have" to do.

Property management fee = 2k pa over 30 year mortgage term = 60k + inflation. So in real terms, you could probably buy a house that's 100k more expensive simply by refusing to purchase a managed property.

Can't remember the exact source, but I seem to remember that a large percentage of new companies recently registered with the CRO are property management company related. One thing's for sure, the directors of property management companies are laughing all the way to the bank.
 
Re: Management Companies?

My final thought on this is home owners should not be expected to pay mgnt fees (i do not include apts in this) as they pay enough tax, and is not to much to expect LA to look after new estates if you think of the amount of cash govt gets from each house that is built in this country.

The easy exceptance of this double taxation is what scares me the most.
 
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Re: Management Companies?

prech said:
My final thought on this is home owners should not be expected to pay mgnt fees (i do not include apts in this) as they pay enough tax
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In principle I agree but for estates there should be a vote to get taken in charge and the majority should prevail ...say a 60:40 majority. That vote policy should have statutory triggers .

You will vote for lower quailty landscaping and cleaning but its a calculated risk that you take yourself .

A bad local authority is better than a bad management agent ANY day.
 
Confusion with the Management company and Management agent

:confused:
Still confusion with Management company & Management agent ?

Do we need to define both terms again !
 
Re: Management Companies?

Perhaps - many people who pontificate about how much of a rip-off this whole area represents often can't distinguish between the two it would seem.
 
Re: Management Companies?

2Pack said:
A bad local authority is better than a bad management agent ANY day.
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AGENT means AGENT !

An LA is both MC and MA and has a single point of contact. An MA does not have to deal with owners, merely with an entity 'controlled' in theory anyway by the owners being an MC
 
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