Solicitors Letter from Management Company

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harlemangel

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I recently received a solicitors letter from the management company in my estate, requesting that I pay outstanding fees due to them over the last few years.

I have refused to pay the fees based on the following:

a) I learned after the first year that not all houses in the estate are paying these fees.
b) No committee exists, nor is anyone in the estate a member of any management board to have an input into how the funds are best spent.
c) There has never been any correspondance from the management company bar the letters requesting payment.
d) There has never been any type of AGM or meeting held to my knowledge.
e) There has never been a statement of accounts issued.

I signed a contract when purchasing the house which stated that management fees would be payable every year. However my question is do I still need to pay these fees based on what I stated above?

Note, I do not have a problem paying the fees, if it were evident that what I paid has been put to good use. However, it seems to me that the management company was setup by the builder, and he took a chance on some households paying the fees and others not.

Thanks for your input.
 
I am not a lawyer but unless there was a clause in the lease stating that your outlined points would be done, I believe you do have to pay up.

Have you considered forming a residents committee and taking matters into your own hands? AGMs are required by law. The best thing to do first is to send a letter to the management agent, along with your fees, outlining your points and requesting that an AGM be called. If an unsatisfactory response is given, then your next port is the directors. If you don't know who they are, then the Company Registration Office will give you this info for a couple of euro. If that doesn't work, then mention the ODCE - you can report your management company to them for not holding AGMS but don't forget you are part of the management company too.

My own experience may be of use to you:

I moved into a development in 2007 and at the next AGM, I formed a residents committee. We fired our ineffectual agent and appointed a better one. Things are coming along slowly but we are definitely in a better position now that interested parties are involved. It has taken time and effort but I believe it is worthwhile to protect my home and my investment.
 
harlemangel said:
a) I learned after the first year that not all houses in the estate are paying these fees.
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This will be a huge problem for the estate but unfortunately it's not a valid defence for you. It will also make things worse for the company.

No committee exists, nor is anyone in the estate a member of any management board to have an input into how the funds are best spent.
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There is no requirement for any committee to exist (nor would it have any power if it did) nor for the builder to resign from the board of directors and let owners be elected. It's a huge problem in apartment blocks.

There has never been any correspondance from the management company bar the letters requesting payment.
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There has never been a statement of accounts issued.
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Again, there's no requirement for any communication.

There has never been any type of AGM or meeting held to my knowledge.
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This is more serious. How long has your estate been in existence? You should have an AGM after 18 months and then every 12 months after that. You should get 21 days notice of any meeting. You might not have a properly weighted vote at the meeting (most developers give themselves a majority vote) but you should definitely be invited to one.

The exception to this (and you'll need to read your lease agreement to check this) is where the developer left a string in your contract whereby no owner becomes a member of the management company until the developer vests control of the land to that company. In this case you have zero rights.
 
Bottom line is you have NO rights to withold payment, you signed the contract that you would pay and by not doing so you are jeopardising the financial stability in the development. I cannot believe you haven't paid fees in "a few years".

As an owner elected to be a director of our management company, it amazes me when people think they can withold payment. This payment funds our insurance, electricity in common areas, street lighting, refuse, maintenance...... witholding payment is not a protest tool.

As an owner you ARE a member of your management company and entitled to accounts etc. A good place to start looking for info is www.cro.ie You'll find contact details there for the directors of your management company.
 
c) There has never been any correspondance from the management company bar the letters requesting payment.
d) There has never been any type of AGM or meeting held to my knowledge.
e) There has never been a statement of accounts issued.
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How vigorously have you sought this information? Have you a documentation trail over the last few years where you have requested accounts and these requests have been refused or ignored? Do you know what the status of the company and annual returns is?

I appreciate and understand your issues and it would be helpful for people advising you to understand whether you have tried to communicate and resolve these concerns over the last few years or whether you have decided to simply ignore the demands for fees.
 
Hi all

Firstly, thanks for your comments, they are very much appreciated.

In response to the last post, by ontour, Im afraid I have been in and out of the country over the last few years, and its no excuse, but I havent chased up any accounts or requested information or have a documantation trail. It is my intention now that I have some time on my hands to start this process now however. And the first step in this was to post in this forum.

I only know what I have posted above, in that there has never been any communication to ~any~ of the households in the estate in relation to accounts or AGM notifications etc. I am hoping to get an idea through this forum of the best way to approach things, and what is my legal standing.

In response to shesells, and with respect, how can I be 'jeopardising the financial stability in the development' when not every household is paying these fees? As I said in my post, I have absolutely no problem paying what I owe, but it seems unfair that I am paying for my neighbour, when he pays nothing. And the money that I should be paying, I have no idea where/how is being used, as no-one in the estate seems to know. It is a strange setup, and stranger that no-one in the estate has ever questioned it.

I searched on CRO for the company in question, but could not find them.

Thank you for your input above, I shall have to speak to a solicitor to get further advice anyway.
 
harlemangel said:
I searched on CRO for the company in question, but could not find them.
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That's a worry, are you sure you have the right name? Be sure and mention that to the solicitor or contact the agent (if one is in place) and double check your information.

Also, be aware that if you decide to sell up, you won't be able to until all outstanding fees due (by you) have been paid.

You need to get your hands on a copy of your management companys Memo and Arts, once you have located it on the CRO you can purchase it online for a fee of just a few euro.

(for the purposes of disclosure I'm a managing agent)
 
harlemangel said:
In response to the last post, by ontour, Im afraid I have been in and out of the country over the last few years, and its no excuse, but I havent chased up any accounts or requested information or have a documantation trail. It is my intention now that I have some time on my hands to start this process now however. And the first step in this was to post in this forum.
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It's a bit worrying that the company or agent haven't contacted you for fees over the last few years. It doesn't bode well I'm afraid.

harlemangel said:
I searched on CRO for the company in question, but could not find them.
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On the CRO website, try variations of the estate name, make sure to select Company & Business Name, try entering the address of your estate (although it's equally likely to be the address of your developer or agent).

If you know who any of the directors are (it could the developer or his solicitor), enter their name into www.solocheck.ie and see what companies are listed there. One of them might be your management company. That will give you the company number so you can check the documents there or on the CRO website.
 
You are trying to look for what is 'fair' but the reality is not based on fairness. I know from one development where people in identical properties pay different management fees. There are different percentages of the overall fees attributed to then even though their properties are the same. This is not 'fair' but it is what they signed up to when they bought the property. Caveat emptor!

Most agreements have penal interest rates assigned to overdue management fees. As these would have to be discharged if you wanted to sell the property, the management company will get the money eventually. They will get a much higher rate of return from you than they will from putting sinking funds in to a savings account. You are probably liable for the cost of the solicitors letter and any legal costs involved in recovering the fees.

There is the scenario where lots of people do not pay, the management company can not afford to operate and it ceases to exist. This makes it almost impossible for you to sell your property. You will also, most likely, be living in buildings/ common areas that are not insured and are not maintained.

Is the development completed? Is it a housing estate or apartments? Is it possible to get some of the residents together? Most importantly, are you willing to get involved in the management company by contributing a few hours a month to minimise fees, protect asset value and maximise quality of life for the residents?
 
harlemangel said:
Hi all



In response to shesells, and with respect, how can I be 'jeopardising the financial stability in the development' when not every household is paying these fees? As I said in my post, I have absolutely no problem paying what I owe, but it seems unfair that I am paying for my neighbour, when he pays nothing. And the money that I should be paying, I have no idea where/how is being used, as no-one in the estate seems to know. It is a strange setup, and stranger that no-one in the estate has ever questioned it.

I searched on CRO for the company in question, but could not find them.
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It is the responsibility of all owners who are liable for management fees to pay these fees. If not all owners have management fees as part of their contract, then that's a separate issue. Your contract requires you to pay your fees so by not doing so you are indeed jeopardising the stability of the development and as others have posted, a management company in trouble is very serious for your property.

Another thing occurs to me, you say you've been in and out of the country - have you rented the property in that time? If so 100% of the management fees are tax deductible.
 
If your estate is being properly maintained I think it would be reasonable to pay the fee`s.

Our estate is very well maintained with a cleaner cleaning the roads every week and the grass always been cut. Any issues you have about the estate , you are always certain to get a call back whether it is what you want to hear or not.

They also have to continually chase tennants that are renting some houses who are dumping there rubbish in other peoples gardens and some people not even leaving rubbish out- letting the rats get at it. Only for this company our estate would go down hill fast.

We dont have any meetings or anything like that, but I know my money is being put to good use !
 
Alexandra12

Would it be possible to name your Management Agents. We are thinking of changing ours and are looking for recommendations.

Re the original post, when you say not all households are paying fees do you mean that they are not obliged to or they are just refusing to? I would endorse what Shesells is saying. By witholding the fee you are penalising the other residents who do pay their fee as there is less money to go around and their fees have to cover your expenses as well as their own. I understand the temptation but it really isn't the solution. You would be better off lobbying through you residents' association or equivalent to change Agents. Also, like a lot of sectors which delivered appalling service when times were good, you might find things improve a bit when they have to try and hang on to your business because there will be no new developments being built to supply them with more work.
 
Our Management company is called "Cook Managment Services LTD"
Manager : Dermot Cook - contact - 0861715678
We pay 327 a year but we are located in Meath, so I am not sure if this is why the prices are that bit more cheaper than Dublin.
 
Apologies if you've already tried this but on the CRO website are you looking for your managing agent's name or the management company's name? They are different entities. The MC name is often very similar or the same as the development's name.

For example purposes only, managing agents might be named something like "Keenan Property Management Ltd" or KPM for short whereas your management company might be called "Oakcourt Ltd" if Oakcourt was the name of your development.



No affiliation to KPM.
 
Ok folks, again thanks for all your contributions.

I consulted my solicitor, and she has advised me that I should not pay a cent until I receive the following :

a) Confirmation of the name of the Management Company (not Agent), and who are the current shareholders, and is the management company registered?
b) Who are the owners of the common areas (mgt company/council?)
c) A complete breakdown of the costs and where/what money has been spent on.
d) Why are all houses not contributing to the upkeep of the estate?

She specialises in property law so I am taking what she says as being the correct approach.

Basically she said that once the building of the estate was complete (including paving/lighting etc), the estate should have been signed over to a newly created management company (which is owned by the residents), and it is then upto this mgt company to 'employ' an agent to take care of the maintenance of the estate. This agent must supply annual accounts of where all monies are spent, and hold an AGM where the management company members can vote to keep the agent on for another year or to look elsewhere. As I mentioned above, the only correspondance I have received from the 'agent' is requesting payment of these annual fees.

Again, I have no problem paying these fees if I am shown exactly where the monies are being used.

I will keep you updated on this as it progesses.

Thanks again for your input.
 
a) Confirmation of the name of the Management Company (not Agent), and who are the current shareholders, and is the management company registered?
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Was the name of the management company not on the documentation that you signed?

I signed a contract when purchasing the house which stated that management fees would be payable every year. However my question is do I still need to pay these fees based on what I stated above?
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It is probably advisable to let your solicitor send the letter to the management agent to demonstrate the gravity of your concern.
 
You absolutley muist pay the arrears. Check your management agreement. They will charge you interest if you dont. The builder does not have to produce a full set of accounts every year. He probably didn't do them for the first couple of years and now done a full set with the information to date. The courts would find this perfectly acceptable. Also you might end not being in a position to sell your property until all the fees are paid.
 
HarlemAngel, not only will you be in difficulty selling if you haven't paid your fees but you will be in even greater difficulty selling if the management company (as opposed to the agent) has gone bust.

Was there no reference to a managing company or managing agency on the demand letter?

Have you contacted that solicitor (or had your solicitor contact them) to request that information?

Have you received no invoices at any point? Surely you have if they have managed to track you down to send you a solicitors letter?

With-holding fees is a silly strategy if your argument is that others don't pay. You only beggar yourself. A bankrupt management company is a very serious problem and would jeopardise your investment.

Establish the name etc of the managing company, check the details, confirm who the directors are. The agents should have all of this information to hand. Speak to the solicitor that acted on your behalf when you bought the property. If they arranged the payment of your first management fees they should have records of that transaction. You have a right to that information but it should not be impossible to obtain, if nothing else someone engaged that solicitor to demand money of you they must have provided you with some details as to how to pay?

I spend a considerable proportion of my time abroad too - I bought my place here while working abroad - I still managed to be engaged and to discharge my responsibilities. It is undoubtedly more difficult but it is doable. For me it begs the question, did you understand what you were signing up to? You wouldn't be alone if you did not.
 
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