OMC incorrectly apportioning service fees.

Marian2017

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8
I recently bought an apartment and have discovered that the OMC has been dividing the annual service fee equally between all apartments since the block was built 5 years ago. However, the lease states that it is to be divided according to the square footage of each apartment. A majority of the owners own the larger three bedroom apartments so the current arrangement suits them fine. The directors of the OMC also act as the managing agent and they all own the larger apartments too. The three beds are twice the square footage of the one beds so the difference in annual fee would be substantial if calculated correctly. Obviously I own a one bed.

I've brought it to the attention of the directors who plan to continue with the same arrangement. They believe a majority vote of the owners would be enough to change the terms of the lease and allow them to change how the fee is calculated, but I don't believe that's the case?
 

noproblem

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2,517
I recently bought an apartment and have discovered that the OMC has been dividing the annual service fee equally between all apartments since the block was built 5 years ago. However, the lease states that it is to be divided according to the square footage of each apartment. A majority of the owners own the larger three bedroom apartments so the current arrangement suits them fine. The directors of the OMC also act as the managing agent and they all own the larger apartments too. The three beds are twice the square footage of the one beds so the difference in annual fee would be substantial if calculated correctly. Obviously I own a one bed.

I've brought it to the attention of the directors who plan to continue with the same arrangement. They believe a majority vote of the owners would be enough to change the terms of the lease and allow them to change how the fee is calculated, but I don't believe that's the case?
As a matter of interest how much is the fee?
 

Marian2017

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8
There is a small common area outside. The exact terms of the lease say External Costs to be split evenly (about €6k) and the rest by square footage (about 30k). If split evenly the fee is about €1,300.
 

mathepac

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7,461
They cannot retrospectively change the terms of the lease, whatever about altering the terms of the lease for the future.

How many owners/landlords own the bigger apartments vs the number owning smaller apartments?

If there are enough of you with the smaller apartments, I suggest the following course of action:

  • Call an EGM asking that service charges be levied according to the existing lease terms and refunds for over-charging to be paid immediately
  • If that doesn't produce the results you want, consult a solicitor and sue the OMC directors individually and collectively for the over-charges and to force them to align charges with the lease terms for the future.

Best of luck. I hate to see people being bullied.
 

kinnjohn

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264
They cannot retrospectively change the terms of the lease, whatever about altering the terms of the lease for the future.

How many owners/landlords own the bigger apartments vs the number owning smaller apartments?

If there are enough of you with the smaller apartments, I suggest the following course of action:

  • Call an EGM asking that service charges be levied according to the existing lease terms and refunds for over-charging to be paid immediately
  • If that doesn't produce the results you want, consult a solicitor and sue the OMC directors individually and collectively for the over-charges and to force them to align charges with the lease terms for the future.

Best of luck. I hate to see people being bullied.
OP said the one-bedroom units were in the minority,
If you sue the OMG who finishes up paying the cost in the end,
 

mathepac

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7,461
I asked a different question and the answer to your question is always the same; if you lose you pay, if you win they pay.
 

jpd

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2,487
and if they lose, they will probably add the cost to the next year's management fee so that going to court is a heads, I lose and tails, I lose proposition
 

mathepac

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7,461
You seem confused about my proposal; maybe read it again.

My suggestion is to sue the directors and not the OMC. Judgments against the directors cannot impact the management fees as in my proposal, the OMC is not a party to the suit.
 

8till8

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Messages
345
The directors of the OMC also act as the managing agent and they all own the larger apartments too.

Do you mean that the OMC its self managed or there is a separate company acting as managing agents and the directors are the same as the OMC?
 

Marian2017

Registered User
Messages
8
Thanks for your thoughts on this. There is no managing agent at present. Two owners from the OMC volunteered to act as directors and as the managing agent also. I'm wondering if the owners did manage to push to have a professional agency manage the block instead, would the agency be obliged to apportion the fees as per the lease or could they also continue to do it incorrectly if instructed to do so by the two directors?
 

8till8

Registered User
Messages
345
Thanks for your thoughts on this. There is no managing agent at present. Two owners from the OMC volunteered to act as directors and as the managing agent also. I'm wondering if the owners did manage to push to have a professional agency manage the block instead, would the agency be obliged to apportion the fees as per the lease or could they also continue to do it incorrectly if instructed to do so by the two directors?

The problem with self managed is you either get the best or the worst... in any case the directors can't make up the rules, they are clearly specified in the lease and mathepac has set out how to move forward on it.

Apportioning costs according to the lease would be bread & butter stuff to a professional managing agent and since they are licensed and regulated then you'd hope they would only 'allow' apportionment as per the lease.

Someone told me that a while back that OMC's must engage licensed managing agents and self managing is not allowed anymore but I don't know how true that is, perhaps someone could answer that here?
If that was the case you could push for the appointment of a managing agent who would 'educate' the directors
 

Zenith63

Registered User
Messages
850
Bringing in a professional managing agent to the OMC I’m involved in was the best decision we’ve made. It’s now much easier to get Directors to do a year or two because there is so little involved, no more concerns about Directors doing work themselves or paying acquaintances to do it, debt collection is much easier when it’s a third-party instead of one of the Directors who may well be a neighbour. The list goes on.

Having said that it wouldn’t be my experience that the managing agent will just come in and ‘fix this’. However what they can do is at the next AGM/EGM call it out as an issue, explain why it is incorrect in their professional opinion and that members should approve them correcting it. Again the fact they’re a third party tends to remove it from being a debate amongst neighbours.

Sounds like you need to get to a point where Directors are rotating somewhat regularly and there is a managing agent in-place, removing the nepotism.
 

jpd

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2,487
Good luck with getting the other residents interested enough to stand for director - I can't a see a queue forming
 
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