Small development 55 units, fair apportionment of mgt fees between 3 types of unit.

[shesells]

Would it not be the case that members could agree at an AGM to collect fee's in a different manner on the basis that no one insisted that it was done as per the lease agreement? Or would that constitute a non compliant service fee collection?

Extensive research and legal advice from multiple solicitors has come to the conclusion that to change fee apportionment they would have to issue new leases to all "owners" and would 100% would have to be signed. This would require apartments in shared entrances to pay higher fees - in this day and age, what owners of such units would agree to that?

 

[lantus]

Extensive research and legal advice from multiple solicitors has come to the conclusion that to change fee apportionment they would have to issue new leases to all "owners" and would 100% would have to be signed. This would require apartments in shared entrances to pay higher fees - in this day and age, what owners of such units would agree to that?

agreed. we had an instance where a previous agent set his own 'creative' method of service fee aportionment. We hope to rectify this next year as the lease specify's something quit different. I would imagine that non compliance with the lease could be grounds to lose a debt court case if challenged. The reason why the agent got away with it is because no one understands or even has their lease. Its a 'hidden' document when really it should be highly visible and easily accessible.

 

[dubrov]

I'm in a similar situation. No mention of apportionment on lease but it does mention year one's management fees (€700, 9000, 1,100 for 1,2 and 3 beds).
This later changed to a ratio of 1 to 1.5 to 2 which is very different from the ratio implied in the original leases. Tge instruction was by the builder who was a director at the time (probably to suit his own holding)

I was wondering if anyone had an opinion as to whether the year one fees specified in each lease could form the basis of a legal argument for fee apportionment?
If so, can this be back dated (5 or so years)?

 

[lantus]

I'm in a similar situation. No mention of apportionment on lease but it does mention year one's management fees (€700, 9000, 1,100 for 1,2 and 3 beds).
This later changed to a ratio of 1 to 1.5 to 2 which is very different from the ratio implied in the original leases. Tge instruction was by the builder who was a director at the time (probably to suit his own holding)

I was wondering if anyone had an opinion as to whether the year one fees specified in each lease could form the basis of a legal argument for fee apportionment?
If so, can this be back dated (5 or so years)?

Establishing yr1 fees is tricky and often either over of under of what is required. If there is no apportionment mentioned at all (and you will need to read the entire lease very carefully.) then it is purely down to the directors to decide. IMHO that's a bad lease if there if there are different types of property unit in the development.

What is the basis for the fee? it could be bins or other costs that mean those units should pay more. Typically though a lot of costs can be just equally divided and some costs like bins done on bedrooms as more people will costs more. Parking and key fobs could be ratio'd also. The values your builder has come up with 'could' be very finger in air. They could be perfectly ok though and without budgets its not possible to say.

you cannot back date a fee though. if years one to 5 were for example: -

500
500
600
600
700

you cannot go back and say well we should of charged 800,800,900,900,1000 and you need to pay up. You can say that from NEXT year the fee structure will be different and the price will be xyz.

Bottom line is that builders make very poor directors in nearly all situations. Get residents in and put together a better budget if you can.

 

[dubrov]

Thanks Lantus.

I've checked the lease and although it is long, the only reference to apportionment of fees relates to the year one amounts.

It seems a massive mistake by the solicitor as it leaves any minority units open to abuse by majority units.

e.g. If 2 beds make up more than 50% of the development they could change the apportionemnt with an AGM vote to levy most of the fees on 1 bed and 3 bed apartments.

The builders are no longer directors but I can see it being very difficult to change the apportionment at the AGM as ultimately some unit types will gain and others will lose out. Those that lose out will vote against.

In my opinion, in the absence of weightings in the lease, the year one fees should form the basis of any apportionment. All owners signed up to these when they purchased and were aware of the distribution at that time.

I guess I will need to seek legal advice on this though

 

[lantus]

Thanks Lantus.

I've checked the lease and although it is long, the only reference to apportionment of fees relates to the year one amounts.

It seems a massive mistake by the solicitor as it leaves any minority units open to abuse by majority units.

e.g. If 2 beds make up more than 50% of the development they could change the apportionemnt with an AGM vote to levy most of the fees on 1 bed and 3 bed apartments.

The builders are no longer directors but I can see it being very difficult to change the apportionment at the AGM as ultimately some unit types will gain and others will lose out. Those that lose out will vote against.

In my opinion, in the absence of weightings in the lease, the year one fees should form the basis of any apportionment. All owners signed up to these when they purchased and were aware of the distribution at that time.

I guess I will need to seek legal advice on this though

Can't the costs be apportioned equally in most cases except where specific costs (bins?) mean that those units have a slight increase.

Gutter cleaning shouldn't be higher for 3 beds, neither should insurance or any other general items like electricity etc. This needs an analytical approach of the budget and clear explanation at an AGM. If costs are transparent then there should be no confusion as to why its x for a bed and y for a 3 bed. The MUD act means you should have all this information. If your just getting a final figure with no breakdown then request the information from your director team

 

[dubrov]

If only it was that easy.
So much of the breakdown would be subjective.

For example, the lifts. You could argue 3 beds use the lifts more than 1 beds but by how much? I guess it could be based on average occupancy but everyone has their own opinion on what that is.