# Management Fees not facilitating apartment block



## Ducky (1 Apr 2008)

Hi, I have paid my management fees on my apartment which I currently let out to a couple and their baby.  Its a top floor apartment.

The problem is that recently, there has been issues with other owners not paying their management fees.  The electronic door and the button on the lift are not working and therefore my tenant and her baby cannot buzz someone in at the main door nor can she use the lift if she wants to go out with her baby during the day. 

I rang the management company and left a message.  Got a call back from the Management Agency basically saying the Developers have no money in their account and some other residents have not paid their bills so they are only looking after the very basics which are Electricity and Gas and they will not be coming to fix any "non essential" items until the bill is paid.

Any ideas on what I should do?

Thanks

Ducky


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## AKA (1 Apr 2008)

How old is the apartment?  Is the lift still under warranty?

Who are the directors of the company?  I'm assuming its the developers.

Has the agent sought debt collection via the courts for the other residents?

Who is the agent?


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## Ducky (1 Apr 2008)

AKA said:


> How old is the apartment?  Is the lift still under warranty?
> 
> Who are the directors of the company?  I'm assuming its the developers.
> 
> ...



I've no idea if the lift is still under Warranty but the Apartment is only about a year and half old.  

The directors of the company are the developers.

The agent is Smith Property Mangement.


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## AKA (1 Apr 2008)

Smith should have issued a debt collection notice to all owners and take them to court. They do it in other developments. I would email them and ask them why this hasn't occured. However if the developers own a large % of the apartments perhaps this is the issue.

I would ask Smith to find out if there is a warranty with the lift as it is only new. 

I'd also do it via email and not over the phone to keep a record of the correspondence.

Are the developers the directors of the management company still? CRO.ie will give you this information.

Was an AGM held last year? Did anyone attend? Have you considered calling an EGM?


Are there further phases to be built?


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## Ducky (1 Apr 2008)

AKA said:


> Smith should have issued a debt collection notice to all owners and take them to court. They do it in other developments. I would email them and ask them why this hasn't occured. However if the developers own a large % of the apartments perhaps this is the issue.
> 
> I would ask Smith to find out if there is a warranty with the lift as it is only new.
> 
> ...



Ok, I'll email them to ask the questions.

I believe the developers are still the directors of the Mgt company.  

There was an AGM held in Feb 08.  Not sure if anyone attended.  No, I haven't considered it as I currently don't live in the apartment block and have only been notified about this today by my tenants.


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## AKA (1 Apr 2008)

Ducky said:


> Ok, I'll email them to ask the questions.
> 
> I believe the developers are still the directors of the Mgt company.
> 
> There was an AGM held in Feb 08. Not sure if anyone attended. No, I haven't considered it as I currently don't live in the apartment block and have only been notified about this today by my tenants.


 
Did Smith attend the AGM - can they provide a copy of the AGM minutes?
The problem also occurs that the apartment will be difficult to sell as no one will want to purchase an apartment in a scheme where the management company is in debt.
Are other owners not concerned?


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## Lauren (1 Apr 2008)

Check out 

Your development may be listed there

You may uncover more info about the problems and hook up with other owners or there may be a residents company that is setup.


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## Ducky (1 Apr 2008)

AKA said:


> Did Smith attend the AGM - can they provide a copy of the AGM minutes?
> The problem also occurs that the apartment will be difficult to sell as no one will want to purchase an apartment in a scheme where the management company is in debt.
> Are other owners not concerned?



I'll ask them for a copy of the AGM Minutes in my email.
I'm aware of this being an issue if I go to sell it.  Its also an issue now as I risk losing my tenants over it.

I haven't spoken to any other owners as I don't know any and have only found out about the problem in the last few hours.


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## Guest121 (1 Apr 2008)

Ducky said:


> Hi, I have paid my management fees on my apartment which I currently let out to a couple and their baby. Its a top floor apartment.
> 
> The problem is that recently, there has been issues with other owners not paying their management fees. The electronic door and the button on the lift are not working and therefore my tenant and her baby cannot buzz someone in at the main door nor can she use the lift if she wants to go out with her baby during the day.
> 
> ...


 
Ducky,

The developers are more than likely still the Directors of the Management Company in your case. As uch they are responsible for the imposition and collection of all annual service charges in your complex. This is their problem which they need to fix.

Ask them how long have these charges remain unpaid? What have they done about it? Have they had any meetings in this regard? If they have you should ask can see the minutes of any such meetings (you're entitled to under Company Law)?  If they haven't then maybe it's a sign of dereliction of duty and you should push them on this.

I would be very surprised if they have done anything at all bar maybe send a letter to the people who haven't paid up. However, it is their responsibility as Director's of the Management Co to act in the best interests of the company at all times, by not collecting the Service Charges they are not acting in this way.

Developers seem to often forget this but in return for the money you handed over to the developer (in buying your apartment) you don't just get your apartment but you also get certain covenants (promises) and guarantees, the developer has a list of other duties and obligations to perform under the terms of the lease including that he/she must maintain the common areas and utilities of your development in good condition and must administer all legal and financial aspects of the Management Company.


Until such a time as the developer transfers his interests and responsibilities to the Management Co the developer is responsible for the management and maintenance of the development. This means that the original directors are responsible for all matters relating to the compliance of the company with company law regulations. As someone already stated he website www.cro.ie will tell you who the last registered directors were, the same website will also give you the Memorandum and Articles of Association (that is the "rules" of the Management Co.). *These directors are fully responsible for the legal, accounting and administration of the development.*


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## Ducky (1 Apr 2008)

bobbysands81 said:


> Ducky,
> 
> The developers are more than likely still the Directors of the Management Company in your case. As uch they are responsible for the imposition and collection of all annual service charges in your complex. This is their problem which they need to fix.
> 
> ...



The Directors are listed at the bottom of the last letter I received so I have their names.

I asked what the management company have done about the unpaid fees.  They said that the director was a very difficult man and that he won't even return their calls or acknowledge any correspondence.

How do I get in contact with the Directors to ask any questions?


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## Guest121 (1 Apr 2008)

Ducky said:


> The Directors are listed at the bottom of the last letter I received so I have their names.
> 
> I asked what the management company have done about the unpaid fees. They said that the director was a very difficult man and that he won't even return their calls or acknowledge any correspondence.
> 
> How do I get in contact with the Directors to ask any questions?


 
The Directors of the Management should be the same people who are the directors of the company that built your estate.  If they're not they will have been apponted by the developers.  Ask the Managing Agent to put you in touch with them.  However, they might refuse.

You should already have contact details for the Developers, if you don't you can contact www.cro.ie and pay the couple of euro for the Articles and Memorandum of Association (which is basically the rule book for the development).  The names of the directors, their registered address and any other directorships they hold will be available to you there.  You can try contacting them at their work addresses and/or write to them if you're getting no response.  Believe me there are many many people in the same predicament you're in.  

If the Director's have not done anything about collecting the monies owed to them they are in breach of your lease.  I would not let this go and if I was you I would be furious about this.  

The Office of the Director of Corporate Enforcement provides excellent info on what it is that Director's of a company should do www.odce.ie  I would advise you to have a good look through this website, especially when it comes to AGMs etc...  If you feel that a Director is not meeting their obligations you can make a complaint to the ODCE about this.

I would also adivse that you get a copy of a booklet produced by the National Consumer's Association (Property Management Companies and You - Ring 1890 432 432 for a free copy).


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## shesells (2 Apr 2008)

My experience with SPM is that you have to keep pushing them for action. Part of any MA's service is the collection of management fees and if necessary use debt collection services to do so. They should not need any permission from the director to pursue this.


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## Guest121 (2 Apr 2008)

shesells said:


> My experience with SPM is that you have to keep pushing them for action. Part of any MA's service is the collection of management fees and if necessary use debt collection services to do so. They should not need any permission from the director to pursue this.


 
You're right, they don't need the Director's permisison but ultimately the Agent only undertakes the work on behalf of the Directors of the Management Co *who are legally obliged* to ensure that the Management Fees are paid.  

You do not pay your fees to the Agents, you pay them to the Management Co.

As already stated the directors of the Management Co, who in this case are still the builders, are fully responsible for the legal, accounting and administration of the development.  They may appoint an Agent to do the work on their behalf but they are still legally responsible for the imposition of charges and the adequate collection of fees.

I wish you luck though cos if the Agent is finding it difficult to get in touch with the Directors then I'd say you're going to find it much harder.


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## Ducky (2 Apr 2008)

Can't see myself having much luck with this one but I'll try.  Thanks for the information everyone.


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## AKA (3 Apr 2008)

Is making a complaint to the ODCE worthwhile?

Does legislation cover unresponsible directors - and if they are removed is there any implications for the director/developer?

What are the implications for the management company / apt block?


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## simarede (4 Apr 2008)

I think Most of the People did not pay because they increased the charges 50% .well i paid mine. every one knows that that the Owner is the one of the Director of the SPM .. 
another developemnt made by them are also in the same situation .. 

They allready in the court with this matter .. So we are not alone ..


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## AKA (4 Apr 2008)

simarede said:


> I think Most of the People did not pay because they increased the charges 50% .well i paid mine. every one knows that that the Owner is the one of the Director of the SPM ..
> another developemnt made by them are also in the same situation ..
> 
> They allready in the court with this matter .. So we are not alone ..


 
It is possible to change agent regardless if one of the owners is a director of another agent.  I suppose it depends on how many units s/he owns.


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## smree (5 Apr 2008)

Having a similar problem with SPM. I've paid my fees but a number of people haven't. All lights are gone in the common areas and they won't replace them as it's classed as non essential.

Personally I class lighting as pretty essential when arriving home late and night and not being able to see anything 

What's happening in our complex is that people are refusing to pay management fees until repairs etc are carried out and SPM are refusing to carry out repairs until fees paid.


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## mercman (5 Apr 2008)

In all your cases why don't you check as to how many apartments the developers own. Then if it is not the majority, call a vote and have the Directors sacked and new Directors (other owners) appointed. Then get a new Management Agent and look after your asset.


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## AKA (5 Apr 2008)

I assume owners would have to pay debt owed to the existing agent first prior to switching.  Would people be in a position to do so?


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## mercman (5 Apr 2008)

Theoretically the payment would only be due up to and including the date  of  the change of an agent. In practice it doesn't work that way. What is been sought is the appointment of a MA who is impartial and operating in the best interests of all the owners, not just the developer.


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## mercman (5 Apr 2008)

It would all be down to timing. The existing MA could not justify calling for a year or six month's charges in advance if he was to be got rid of in the first month.


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## shesells (5 Apr 2008)

The debt is *not* to the management agent, it's to the management company. The money is still owed regardless of who the agent is, it's what everyone signed up to at purchase!

The management company does not have to pay the agent their entire fee up front, we put ours on a month by month basis to keep them on their toes!


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## Stupid Boy (5 Apr 2008)

shesells said:


> The debt is *not* to the management agent, it's to the management company. The money is still owed regardless of who the agent is, it's what everyone signed up to at purchase!
> 
> The management company does not have to pay the agent their entire fee up front, we put ours on a month by month basis to keep them on their toes!


 
I would query the fee not having to be paid up front... most leases state that payment is payable annually in advance...


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## shesells (5 Apr 2008)

You're mixing up the management agent and management company again!!

I am a member of a management company by virtue of being an owner. In my lease I signed to pay annual fees to the management company. The management company employ a management agent (eg Wyse, SPM etc) to manage the development and the budget and accounts for the development. The management agency charge the management company a fee for their service. It comes out of the management company accounts.

Our management company have withdrawn permission for the management agent to take their fee in one chunk. Instead they get paid it from the management company account on a monthly basis.

I never said I paid my management fees for my unit monthly.


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## mercman (5 Apr 2008)

A misunderstanding here.Seashells was referring to the Management Co., paying the Management Agent monthly.


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## AKA (8 Apr 2008)

Interesting - so who holds details the bank account information - I assume this bank account also holds the sinking fund?

Who has authority to draw from the account - directors only or by named members of management company?

Now that I think of it the bank account details the agent provides is in the name of the management company.

sheshells, did you change agent when you implemented the month by month draw down or how did you arrange this with the incumbent?

This would keep them on their toes.  How would we know if the management agent is drawing monthly or annually?  I assume the res. association acting on behalf on the management company can request a set of bank accounts.


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## shesells (9 Apr 2008)

No we didn't change agent but refused to sign off on the accounts unless they agreed it and they did. Directors have access to the bank statements to see this.

The residents association has no right to any accounts of the management company. The accounts are presented retrospectively at the AGMs having been issued to all members of the management company at least 3 weeks in advance of this.

As to who controls the bank accounts, that's up to each development. In some a director has to sign cheques with a management agent, in others only directors, in others only the management agent.

The management agent controls ours but cannot sanction spending over a certain amount without reverting to the directors.


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## AKA (10 Apr 2008)

Our developer directors never showed up at our first AGM - they just the agent with a one page excel print out of the 'accounts' - not issued in advance. I assume we should be looking for more than an excel sheet?

Is your monthly fee over the limit required for director approval?

How did you agree the monthly fee with them - at an AGM?

We are having problems with agent in relation to our accounts and developer directors are not very helpful.

How do we get proof that the agent is not misusing the accounts and has deposited the fees into the company account that residents have sent in? i.e. that the sinking fund is intact etc.  

Thanks


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## shesells (11 Apr 2008)

Sorry AKA, thought I'd mentioned somewhere that I'm a director of our management company.

Builder directors didn't show at our first AGM either but said they wanted to step down so I decided to go forward as it was the only way I could ensure my investment was protected. 3 AGMs later and I'm still there. It's a LOT of work but for as long as we own in this development, I would prefer to be a director, to be in the know and in some aspect of control.

The monthly fee to the management agent is their annual fee/12

Accounts generally run to several pages, budgets, expenditure and income sheets...all that sort of thing


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## oilpainting (18 Apr 2008)

also you cant switch directors until the development is fully finished as in our case,we cant appoint another director until the rest of the development is finished and they have stopped building because of the current climate... there are a number of unsold properties in our estate and the building contractors owe outstanding fees for the maintainance fees.... 

the best think to do is form a residents committee,we are a new developmet and have recently formed a committe and we are attending the agm meetings and communicating as a group which offers great support,we also set up a neighbours forum and we can get more support from there also...

we have recently had the same problem with outstanding fees owed by residents who are refusing to pay,but the management agent has written some heavier letters from solicitors,threatening to get the debt collectors in... we are starting to get some response,which hopefully will build the resolve....


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## AKA (19 Apr 2008)

Cheers for the info - we looked for the accounts - i.e. individual breakdown of units paid but were told that only the directors could access this info due to Data Protection Acts?


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## mercman (19 Apr 2008)

AKA, That's a load of crap. Just aren't al the apartment owners equal shareholders in the development. This really is starting to be a bit smelly.


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## Complainer (19 Apr 2008)

mercman said:


> AKA, That's a load of crap. Just aren't al the apartment owners equal shareholders in the development.


Not necessarily crap. Shareholders don't have automatic entitlements to see every detail of every transaction that goes on in the company.


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## mercman (19 Apr 2008)

Maybe, but as a shareholders of the  Management Company  there is a huge amount of specific information they are entitled to see and raise  questions and queries. i.e. where is the money going etc.etc.


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## Complainer (19 Apr 2008)

mercman said:


> there is a huge amount of specific information they are entitled to see and raise  questions and queries. i.e. where is the money going etc.etc.


Agreed, but they may not necessarily be entitled to see where it has come from (or not come from)?


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## AKA (19 Apr 2008)

Yes, but this isn't an apartment block - rather a housing estate.  The agent has specified that the res. assoc. can visit their offices to review the accounts but won't give us an individual breakdown.  This is what they have said, I'm not saying I believe it all.

We are reluctant to become directors before we get a taking in charge policy from the county council.


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