# Im a Director of our management co. & we have large outstanding service charges



## redfedora (3 Nov 2010)

Not sure if this is the best place to put this so please feel free to move it if needed.

I'm a director of our management company and we have large amount of outstanding service charges, some going back years.

Obviously we can use a solicitor to do the work for us but this is costly, our company is surviving day to day and doesn't have any surplus cash available and most debts are under €3,000. Under district court rule from what I read the maximum award for legal costs is something like €45 but legal costs would be more than 10 times that.

Anyway, can the company file in the district court without a solicitor? and if so how would we go about doing it? anyone know what this would cost etc? 

Is the small claims court an option and if we filed for each invoice as opposed to the full debt it would be under the €2000 limit of the small claims court.


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## Time (6 Nov 2010)

A company cannot represent itself in actions in any court. A company must have legal representation. The fact that the costs of said representation cannot be fully recovered is neither here nor there. That is why companies will not chase small debts.

You cannot use small claims to recover debts.


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## ajapale (6 Nov 2010)

Moved from  Mortgage Arrears to  Management Companies.


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## Yorrick (6 Nov 2010)

The Law Reform commission did recommend the use of the Small Claims Court for recovering debts in its submission to Governement when advising on the format of the Multi Unit Development Bill currently going through the Dail.
However when the Bill was introduced this provision was not included. I suspect the legal profession saw the potential loss of revenue and ensured it was not included.

Despite the fact that you have little funds as a Director you are obliged to pursue lawful debts owing. I would recommend getting a Solicitor and initiating action against the outstanding owners. They are all shareholders in the Company and should be paying their management fee. There is no easy way and when the new legislation comes through additional costs will be placed on management companies


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## DianeC401 (10 Nov 2010)

I would concur with Yorrick's advice. A decent solicitor will be a good investment for your management company and can help with a wide variety of issues. In our management company we are able to charge individual members any legal fees outstanding for chasing their debt so this may not be an out of pocket expense for the management company itself.  

There are some large legal firms who specialise in debt collection and although our experience is anecodotal, we found that we got better service and results from using a small firm where there was one individual solicitor working on our cases.

For stubborn non-payers, persuit through legal means is the only thing that will work. But you need to be persistent and consistent.

You could check your lease and see whether there is a provision for charging interest on outstanding fees. If there is, this can also act as a great motivator to clear the account.

Good luck.


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## Time (10 Nov 2010)

> In our management company we are able to charge individual members any  legal fees outstanding for chasing their debt so this may not be an out  of pocket expense for the management company itself.


On what basis? Courts will only allow scaled costs.


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## redfedora (18 Nov 2010)

sorry fols was away and didn't realised the thread was moved. 

the memo and arts have a clause that states the directors can implement any rules and regulations needed for the smooth running of the company. To me that means we could implement a late payment charge and interest at 8% per annum pursuant to The Courts Act 1981. i guess we could also ammend them to include the shareholder is responsible for all legal fees if a matter goes to court. 

I guess the biggest issue is firstly paying a solicitor coz if it went to court the scalar fees awarded would be very low as teh majority of the debt would be under the district court jurisdiction as it's under 6K

I agree the smaller law firms are better because their costs are usually lower could anyone recommend any? I was told crosskerrys specialise in debt collection anyone any experience with them?


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## markpb (18 Nov 2010)

redfedora said:


> I was told crosskerrys specialise in debt collection anyone any experience with them?



Lots of management companies use Crosskerrys but I'm not sure how great they are. They charge a lot over the scale fee which means the company will (probably) have to cover the difference. From what I've heard (from my own company and others), they're big, slow and not overly successful. You might be better off finding a small company who will be more aggressive.


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## redfedora (18 Nov 2010)

niceone thanks I'll avoid them so

any recomendations welcome folks


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## davey (2 Feb 2011)

we are in the exact same position in our company. Our agent wants to bring in parking permits as a way to incentivise people to pay. The thinking is that you only get a permit if your service charges are up to date so withdawing this service would incentivise a lot of landlords and owners alike to pay up. Anyone have any experence with this?
The agents said they have issued legal letters etc to the people who are not paying (theres only two members in question but their debts add up to about 7 or 8 grand). One of the non paying members lives abroad and has no one renting his place so don't think he will be bothered (at the moment anyhow) about not having a parking permit. The management agents don't seem to have any confidence in getting the money back through the courts and are recomending the parking permit approach. Just wondering if anyone has experienc of going hrough the courts and whether it is usually successfull or not? Any advice would be appreciated


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## Time (2 Feb 2011)

If he is abroad the courts will be a waste of time and money.


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## redfedora (3 Feb 2011)

agree with Time on this courts may be a waste on this person.  that said you could get a judgement mortgane placed on teh property, if it's not rented then maybe the owner intends to sell when the market turns so if that's the case if there is a judgement the company will hopefully get the money. 

I've heard that bringing in permits is very effective as is removing other services. we're looking at that now, things like waste management will be removed from those that don't pay. we'll change the codes to the bin sheds etc that will catch some of them at least.  We've written to all shareholder sand told them fines will be applied to accounts not cleared by a certain date. if there's an under ground car park maybe cancel their fob to get in and only replace it when they pay up stuff like this will work well if it's a rented property because the landlord will get grief from their tenant.


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## Time (3 Feb 2011)

All sensible ideas there.


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## bertie1 (4 Feb 2011)

Process it through the courts, it doesn't cost that much, the cost of the letters & fees a few hundred Euro for each defaulter. It takes forever. If it goes over 6 years you cannot go after them , so put the wheels in motion now. Eventually when they go to sell , the judgements are on the property and the bills will have to be paid before they sell.
You may not get it back now but it will come back to the company eventually.


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## davey (4 Feb 2011)

Thanks all for for taking the time to offer advice. We have had good news in that the main non paying member is close to completing sale of his place so we should get our money back very soon. It seems from everyones advice that it's probably best to tackle these issues in every way possible ie legally and by using parking permits/withdrawing services if possible.

Thanks again


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