A quick question I hope! I live in a mixed development and the method to calculate the fee for houses is set out in our deeds. It specifically states that the costs of external services only be used in this calculation however it transpires that non external costs e.g. light and heat, lift maintenance and other apartment specific costs are being included to calculate the fee. The agent says its not an issue as the fee is agreed at AGM. Are there any grounds to dispute the make up of the fee?
Service Fee Calculation
- Thread starter tnegun
- Start date
The agent doesn't set the management charge - the management company does.
So if you have queries about the level of the management charge then you should probably be directing your queries to the management company/directors and not the agent.
Why do you consider stuff like light/heat, life maintenance etc. not to be external services?
Surely that's precisely what they are - payable to the energy provider, lift maintenance company etc.
So if you have queries about the level of the management charge then you should probably be directing your queries to the management company/directors and not the agent.
Why do you consider stuff like light/heat, life maintenance etc. not to be external services?
Surely that's precisely what they are - payable to the energy provider, lift maintenance company etc.
Yeah, paid to external providers, not an inside the buildings versus outside thing.
If they were not paid in this manner where would the money come from to cover these general costs?
I understand but there is no way to communicate with the company only the agent. These charges have nothing to do with houses and are external to them I believe is the intention of the wording. The deeds state that houses are only liable to contribute towards external costs. They are not defined but I think its reasonable to assume these to be Landscaping, Agent Fee, Audit Fee, common area maintenance and not Lift Maintenance and Heating of common areas in the apartments etc.
From the apartment owners fees as the costs are specific to the apartments, I pay my own insurances, maintenance, bins etc. The deeds make provision for this too but the fees haven't been calculated correctly with the apartments shortfall being made up by the fee charged to the houses.
We own an apartment in an estate which includes some houses. The houses contribute in part to the insurance, the gardening, the audit fees, the agent fees,... but not to the bin, internal maintenance, the sinking fund, the internal cleaning... The easiest way to communicate with the directors of the OMC would be through the AGM. Did you participate to the AGM? Their insurance contribution would be lower than the apartment because it's only linked to the external common area.
The directors don't communicate with members unfortunately or attend the AGMs which I have attended. They only communicate via the agent. The fee is calculated by the "auditor" and there is no transparency on its make up. Its only by working backwards with the published accounts that its obvious that the fees raised by apartments don't cover apartment specific costs.
Are you a member of the management company?
If so then you should get annual reports, notices of general meetings, contact details etc.
I don't really understand what you mean.
I live in a house in a privately managed area too and pay my own home/contents insurance but part of the management fee that I pay goes towards things like insurance for the estate/common areas.
Yes, I'm a member unfortunately the financials we get are not very detailed with no breakdown e.g. Insurance is just one line item but this covers both block insurance and public liability for common areas, repairs and cleaning is another without detail.
It is only with recent attempts to backdate and substantially increase service charges that this has all come to light. The agent is also very unhelpful in directing us to the CRO to get the company accounts rather than give any detail and just repeatedly states that this was all passed by the auditor and approved at AGM.
I'm happy to contribute to the shared costs however it appears I'm doing that and more. Reviewing the accounts for 2022(The agent tells us 2023 won't be available until August) and the budget circulated for 2024(AGM for 2024 is August) the fee charged to the houses is 20-25% higher than it should be to cover apartment-specific costs e.g. light and heat, repairs, elevator maintenance etc. Conversely the apartment fee is 20-25% lower than it should be.
This is the exact wording
The owners of the Dwellinghouses shall only be liable to contribute towards the External Service Costs.
(1/A)*B
Where "A" equals the total number of Units in the Estate at the commencement of the relevant year and "B" equals all the External Service Costs in the relevant year.
Where the Unit is an Apartment;
The proportion of the annual External Service Costs payable by each lessee of an Apartment shall be the aggregate of
(1/A)*B
Where "A" equals the total number of Units in the Estate at the commencement of the relevant year and "B" equals all the External Service Costs in the relevant year; and
(X/Y)*Z
where "X" equals the Deemed Floor Area of the particular Apartment and "y" equals the aggregate of the Deemed Floor Areas of all Apartments in the Estate at the commencement of the relevant year and "Z" equals all the Service Costs in the relevant year less the External Service Costs in that year
It is only with recent attempts to backdate and substantially increase service charges that this has all come to light. The agent is also very unhelpful in directing us to the CRO to get the company accounts rather than give any detail and just repeatedly states that this was all passed by the auditor and approved at AGM.
I'm happy to contribute to the shared costs however it appears I'm doing that and more. Reviewing the accounts for 2022(The agent tells us 2023 won't be available until August) and the budget circulated for 2024(AGM for 2024 is August) the fee charged to the houses is 20-25% higher than it should be to cover apartment-specific costs e.g. light and heat, repairs, elevator maintenance etc. Conversely the apartment fee is 20-25% lower than it should be.
This is the exact wording
The owners of the Dwellinghouses shall only be liable to contribute towards the External Service Costs.
(1/A)*B
Where "A" equals the total number of Units in the Estate at the commencement of the relevant year and "B" equals all the External Service Costs in the relevant year.
Where the Unit is an Apartment;
The proportion of the annual External Service Costs payable by each lessee of an Apartment shall be the aggregate of
(1/A)*B
Where "A" equals the total number of Units in the Estate at the commencement of the relevant year and "B" equals all the External Service Costs in the relevant year; and
(X/Y)*Z
where "X" equals the Deemed Floor Area of the particular Apartment and "y" equals the aggregate of the Deemed Floor Areas of all Apartments in the Estate at the commencement of the relevant year and "Z" equals all the Service Costs in the relevant year less the External Service Costs in that year
Thanks for all the input and responses this far, is access to the full accounts restricted to board members only or should any member be able to inspect them? What is the role of the auditor? Is it purely financial or should they also ensure fees are calculated in accordance with the Company Constitution/MUD Act.
The auditors would only have responsibility for the accounts. I don't believe they review the way fees are calculated.
Yes.
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No.