Management Fees Arrears

R

rafabenitez

Guest
Hi,

I have been in financial trouble paying my management company fees for the last few years. Basically after wage cuts etc. I have had to put all my money into my mortgage payments.

I have been in regular contact with my management company to explain the situation and have tried to pay in some amounts every year.

My debt to them now stands at €6,217.90. I have paid off nearly €1000 over the last few months as my financial situation has improved. I have continued to inform them that I will pay as much as I can and am in the last few months making a bif effort.

However today I received a final notice letter saying I owe them €1,230.80 in interest and that it was my final notice before they got there solicitor involved.

Any advice on what I should do. I'll continue to make a huge effort to pay the €6,217.90 and will enter a payment plan but the level of interest of €1,230.80 seems extremely high.

Thanks
 
Unless you significantly accelerate your repayments it is likely to be a number of years before you are up to date. Would it be possible to get a repayment holiday or go interest only on the mortgage to pay off the overdue management fees sooner?

The amount of interest owed is a lot of money but it depends what the rate charged is? Is the rate set in the original agreement?

You need to convince the management company that you are making every effort to clear the debt soon. If you you look at it from their perspective you have chosen to pay the bank your mortgage commitments in preference to paying your management fee, they may not see the money you owe them as less important. The management company have to be seen to be pursuing debts and having penalties for non payment, hence the interest and engagement of solicitors. If they did not pursue this path why would anyone be bothered paying their management fee?
 
Thanks for the reply. I will have to get the fees sorted asap. I understand completely the point of view of management company. I'll have to request a breakdown of the interest charged and see where things stand then.
 
A solicitor could force a sale of the unit to satify the Management Company debt so avoid this route. How many units / members ?
 
Check that your lease agreement allows for interest to be added to your arrears. If not you may be able to argue against the amount. I can see it from both sides, but appreciate that you are making an effort to clear the backlog. To be honest, I'm surprised that the management company have let it run a few years without pursuing legal action, we start after 6 months of arrears where no payment is received.
 
My management company advised at the AGM that over six units have NEVER paid (and I'm here 8 years). I know I live in the same development as you Sheshells
 
amtc said:
My management company advised at the AGM that over six units have NEVER paid (and I'm here 8 years). I know I live in the same development as you Sheshells
Click to expand...

I think you're in another cluster, possibly the next one up. We have one long term offender who is not Irish and has left the state.

It's something we've worked hard on in the past 7 years since the owners took over as directors - the key to fee collection is three pronged - make sure you get the best value from your service providers so your fees are low, make sure people see their fees at work and finally, work with people to find a way for them to pay, be it weekly, monthly or whatever.
 
The OP does sound as if he is attempting to make good on his service charge arrears but as others have said the charge is annual so you need to be able to pay future years and pay off past years in a meaningful manner.

Write to your OMC and state how you are going to pay off the debt and in what time period and that you are comitted to doing so. Going to court is expensive for both parties, however the level of your debt makes it potentially better for the OMC to go down the legal route unless you can convince them otherwise.

Obtain a full breakdown of the charges and interest being charged. The amount being claimed seems very high and obviously is counter productive to actually paying off the charge.


Its a very difficult situation and I hope it gets resolved amicably.
 
There is no guarantee but if you manage to pay the monies owed (less the interest charged) the OMC may come to an agreement with you regarding the interest.

Would there be any way for you to organise a loan to pay the €6k fee? I can understand it may not be feasible as you are only just beginning to get back on your feet financially, but if you can clear this debt now, the OMC may be willing to waive the interest charged.

The maintenance fees themselves (and any legal fees incurred pursuing you for non-payment) are absolute charges so can't be negotiated but the interest is generally introduced by OMC's as a way of changing behaviour rather than as a money-raising operation and most OMC's are willing to negotiate interest charges with Members who make a genuine and realistic effort to sort out their debt.
 
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