# Mgt Company Charge, Defecits, Mis-calcuations and Incompetence?



## Chief Robert (21 May 2006)

Hi all,

I'm writing this to get some advice from those of you who may have encountered something similar or even the same - and how you improved the situation. I will let the Property Mgt company remain anonymous (as I don't know if it is okay to name them on these boards?).

I live in a relatively new development near Woodstown in Knocklyon, Dublin. The development comprises Apartments and Houses. The developers are still on site (3 years after the first tenants moved into the estate) as new phases to the development have been launched over the last number of years. As such, I believe that the developers have a say in who the Mgt Company for the estate shall be. Also, it appears that the developer has a relationship (either a brother or partnership or shares or something) with the incumbent Mgt Company.

We have received requests for payments every year for the Mgt Company services. We have a breakdown of costs to differentiate between Apartment fees and House fees. Apartment fees are higher of course.

At our annual AGM this year (I was unable to attend this one in person unfortunately) the Mgt Company advised that a deficit had arisen in the Mgt Company Fees for the year ended December 31st, 2005. The deficit was calculated at €75,000. All residents then received a letter informing of this defecit, and we have been informed that this is related to the cost of Refuse Mgt for the estate in 2005. The €75,000 defecit amounts to an extra charge of €177 per unit (house/apt) for the year ended 2005. The budget for refuse in 2005 came was set at €75,000, but the Mgt Company claim that the actual cost came in at €150,000. 

To quote the Mgt Company: _The 2005 Amenity Service Charge was €464 per unit, c €160 was in relation to the refuse service. Accordingly allowing for the defecit now the total charged to each dwelling is in the order of c. €330. The defecit arose primarily because of the phasing of the sales of units within the development. When the budget was set for 2005 in Nov/Dec of 2004, the majority of costs for 2005 were estimated. The billed charges were based on estimates of units closing throughout 2005. It was initially estimated that 504 units would be sold by the end of 2005 financial year however the actual figure (at the end of December 2005) was only 482 units. Therefore this meant that the expenditure for the upkeep of the development had to be spread over fewer units and hence a defecit arose._
_Secondly the capacity of waste per dwelling and the cost of removal and collection were under estimated...._
_Thirdly during 2005 the exceptional level of boxing/cardboard generated from people moving into their properties increased the number of required collections and accordingly increased the cost._

My questions are probably obvious but:

How can a group claiming to be a professional Mgt Company underestimate Refuse costs by 100%? Is this normal practice?
Is the explanation above something that should be acceptable?
Is it possible to issue something similar to a "Vote of no confidence" in the Mgt company for it's inabilility to forecast/estimate costs?
Is it difficult to change Mgt company?
Should I actually pay my proportion of the "defecit"? (I've been informed by most other residents that they have not paid - but what does this lead to?)
Sorry about the lenght of post, but I wanted to objectively explain the situation to give a background, before getting to the Mgt Company's explanation. All advice and suggestions on how to proceed (alone or with some other neighbours) would be gratefully accepted.

Thanks!


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## CCOVICH (21 May 2006)

A couple of observations (I too am an owner/occupier in a privately managed development).


Not being pedantic, but all owners are the Management Company.  It is the Managment Agent that is responsible for the budget etc.   
The owners should have representation on the Board of Directors of the Management Company.  We have 6/7 owners appointed as directors even though the builder is still on site and retains de facto control of the development.   
As I understand it, the builder was responsible for paying managment fees for apartments that remain unsold-this is how it happened in our development and we received fees from the builder in respect of finished but unoccupied apartments.   
It is a very valid explanation that people moving in generate large volumes of waste packaging etc.  This was very apparent in our development.  One thing that exacerbated the situation was that people were unbeleiveably lazy and selfish-refusing to break up boxes etc. and so bins filled much faster than should have been the case.  We also had people using the refuse service to dispose of xmas trees (when there was a collection point less than 5 minutes away).   
To me, the Managing Agent's explanation seems fairly reasonable-by definition-estimates are just that-you would obviously hope that they improve in time (is it a long established Managing Agent or someone fairly new to the scene?), but for a first cut, it is something I would tend to allow.   
I'd imagine that it is still at the discretion of the builders as to who acts as Managing Agent, but this is something that may be in the Lease/Management Agreement or the Articles/Memo of Association.   
It is possible to fire the Managing Agent, how you go about it may depend on the situation as per my previous point.  Will a new agent be any better?  Is this refuse budget the 'only' problem?   
If enough of you feel it is worthwhile (I doubt that it is), you may want to club together to engage legal advice on your options.   
What happens if you refuse to pay?  It is only yoursleves that you are kidding-if the actual costs incurred were in fact €150,000, then the owners are liable.  If a deficit persists, you could find yourself in court, or, other essential services will not be undertaken, i.e. by refusing to pay the refuse charges, their may be no money to clean the hallways, change the lightbulbs, service the lifts etc.
 I would certainly try to get representatives to meet/liase with the Managing Agent on a regular basis. I would also make sure that you are not being penalised on the basis that there are unsold apartments-the developer should 'pay their way'-the fact that the unsold apartments are not generating expenses (they are to a certain extent) is irrevelant-costs are spread on the basis of ownership, not usage of services (I know that houses and apartments pay different rates, but that is only a rough cut).


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## RainyDay (21 May 2006)

Wow - Difficult situation. I've done a bit of researching on these issues, but I'm not an expert. You might get some useful information from posters on this Boards.ie thread also.

I have heard that most such contracts state that the developer will run the management company until the last property is sold, when each property owner becomes an equal shareholder in the management company. On its own, this is a sensible, practical solution to ensure that the site is serviced while new purchasers are getting established. However, I've heard that some developers will hold onto a few properties, thus giving them rights to run the management company for ever and ever. I would imagine that any possible resolutions to this problem would involve expensive legal proceedings.

Perhaps new purchasers should insist on some time limit on the developers involvement in the management company?

Is it possible for you to move to some kind of pay-by-weight system for waste disposal? As long as you have a flat fee, there is no incentive to reduce/reuse/recycle, so the careful householders will pay for the excesses of the others. Can you get the local authority to commence a waste disposal service?


			
				Chief Robert said:
			
		

> My questions are probably obvious but:
> 
> How can a group claiming to be a professional Mgt Company underestimate Refuse costs by 100%? Is this normal practice?
> Is the explanation above something that should be acceptable?




I guess you'd need more detail to seriously assess this. Where did they get their original estimates of use from? How far out were these? Are they paying market rates for waste disposal? It shouldn't come as a huge surprise to property managers that new householders will have lots of cardboard to dispose of.



			
				Chief Robert said:
			
		

> [*]Is it possible to issue something similar to a "Vote of no confidence" in the Mgt company for it's inabilility to forecast/estimate costs?
> [*]Is it difficult to change Mgt company?


Is each householder a member (director or shareholder) of the management company? If so, a majority of householders could take control via votes at EGM or AGM. If not, I don't think you have any voting options.





			
				Chief Robert said:
			
		

> [*]Should I actually pay my proportion of the "defecit"? (I've been informed by most other residents that they have not paid - but what does this lead to?)


Difficult - If you don't pay, it is more likely that the estate will not be well maintained, which is not in your interest in the long run. 

Hope this helps, and I hope others can help.


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## Chief Robert (21 May 2006)

Thanks CCOVICH,

I understand your point making the distinction between the Mgt Agent and Mgt Company. I am not sure how many "owners" have been elected to be part of the running of the Company. I need to get more clarity on this, but at the Mgt company meeting in January 2005 - there were no owners on the Company. The Company was run by the Developer, the Agent, and a 3rd party representative. I am not sure of the present situation.

Also - a neighbour of mine quizzed regarding the charges, and was informed (over the phone) that a large percentage of homes have never paid the intial annual charge for 2005.

Finally, while I accept that estimates are just estimate - the Mgt Agent is supposed to be a specialist at running such companies. If you had the same experience of people dumping excessive boxes & packaging etc when moving in for the first time - isn't it fair to assume that this is a norm? And if so - shouldn't they have been capable of budgeting for this? I could accept an over-run in the budget - but really, when they budget for €75k and it comes to €150k - aren't they demonstrating real incompentece?

As I say, I am not sure if this is a norm etc so just wanted to get the feedback. If others have had the same experience etc, then no problem. Just seems a little bit sus to me...

Thanks alot!


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## CCOVICH (21 May 2006)

Chief Robert said:
			
		

> The Company was run by the Developer, the Agent, and a 3rd party representative.



Interesting-insist (if possible) that owners have some form of represntation.  Who/what is a "3rd party" in this instance?



			
				Chief Robert said:
			
		

> Also - a neighbour of mine quizzed regarding the charges, and was informed (over the phone) that a large percentage of homes have never paid the intial annual charge for 2005.



I would get clarification on this point:

1.  Is it that there were a large percentage of unsold apartments that did not contribute; or
2.  Owners did not pay

Point 2 needs expansion-it is generally the case that you have to pay over fees for the year on signing the contracts-was this the case?  Or did people move in and take possession prior to 2005?

If a sizeable percentage are refusing to pay this is a cause for concern as it is only yourselves that will suffer.



			
				Chief Robert said:
			
		

> Finally, while I accept that estimates are just estimate - the Mgt Agent is supposed to be a specialist at running such companies. If you had the same experience of people dumping excessive boxes & packaging etc when moving in for the first time - isn't it fair to assume that this is a norm? And if so - shouldn't they have been capable of budgeting for this? I could accept an over-run in the budget - but really, when they budget for €75k and it comes to €150k - aren't they demonstrating real incompentece?


 
I agree that the Agent should be able to do their job-I have no doubt that they are being paid well enough.

But one incident doesn't generally demonstrate incompetence (in my view anyway)-it really depends on their experience, or the experience of the person within the agency who is responsible for your development-i.e. the more experience they have, the higher the expected standard.  But regradless, I still don't think that a once -off (so far) incident demonstrates incompetence, and they haven't necessarily cost you any money, some/a lot of frustration I'm sure, but if the €150,000 is bona fide, there isn't much you can do but pay up.  I'm pretty sure we ran a deficit in our first year, and our refuse costs have been very high compared with all other costs.

On some of the issues that _RainyDay_ has referred to, we actually received indepedent legal opinion on the issue of 'forcing' the developer to hand over the development and were told that the agreement they have to retain the development until all units are sold is 'cast iron' so to speak. It is an issue that I'm sure many would like to challenge.


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## Chief Robert (21 May 2006)

Thank you both RainyDay and CCOVICH for the advice offered above - it is much appreciated. All I am really looking for is an objective analysis and experience others may have of similar situations. So thank you both again. 

As my original post was quite lengthy I didn't elaborate on the perception that many of the residents had regarding the performance of the Mgt Company. The Mgt company didn't have a good reputation prior to all of this in the first place. But perhaps very few of them do anyway? This is a first home for most residents, so we don't have much experience to compare and evaluate good performance with poor performance. It began with little things like lack of refuse collection and then little things became more annoying. For example, it was quite irritating to be charged for "Lanscaping charges" when you don't see anything happen over the course of a year bar 1 annual walkaround the estate by people with a weedkiller gun and a spray mask!!! Then little things like questions unanswered, lack of communications, telephone calls/queries never being taken as "no one was available" and no-one ever returning calls became larger issues.

Regarding the 3rd Party - I can't recall exactly, but I think the guy was a Solicitor who also happened to be a Commisioner of Oaths. I will check out who makes up the Board of Directors of the Management Company. If there are some owners appointed as directors then I guess I need to trust their integrity in these matters - even though as you say the builder is still on site and retains de facto control of the development. 

Also - I will check out if the builder was responsible for paying managment fees for apartments that remain unsold. This will be interesting to find out.

Finally, I will ask the Mgt Company to explain how they calculated their original estimates for 2005? As you both have said it shouldn't come as a huge surprise to property managers that new householders will have lots of cardboard to dispose of. But I will check.

Am I right to ask them to provide me with this visibility and transparency before paying the defecit? This should not be an issue for them to provide me with I hope?

Thanks again...


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## CCOVICH (21 May 2006)

Chief Robert said:
			
		

> Am I right to ask them to provide me with this visibility and transparency before paying the defecit?



Yes.



			
				Chief Robert said:
			
		

> This should not be an issue for them to provide me with I hope?



No.  But don't hold your breath if they won't return your calls.


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## nai (22 May 2006)

Our Management Company (when it was setup) was created as a Ltd Company (as they all are) and there were three directors nominated by the builder to set it up - his secretary, solicitor and his brother. They then had control over all of the decision making processes - whenever the residents approached the mgt company about getting work done it was at the mgt co's discretion whether it would be done or not.

As such the Residents Association decided that they wanted to take control of the mgt company. We got legal advise and it is possible to remove the directors and replace with duly elected directors.

We had to force an EGM - to do this we needed a petition signed by > 75% (or maybe more -can't remember details) of all shareholders in company (ie residents - 1 vote per household). The existing directors were notified and the agenda was set with the main item to vote on removing the directors and replacing with new ones. This happened and there are now 5 residents on the executive committee of the Mgt Company. This gave us power to dictate what we wanted done with the mgt fees.

My advise - get advise from a solicitor (payable by the mgt company). And do it properly - it's worth it in the long run.


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## CCOVICH (22 May 2006)

_nai_-did this situation arise after the developer had sold all units in the development?

While we have had our own directors elected (the developer had no objections to this), the fact remains that they sill own units onsite and hence have de facto control.


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## Chief Robert (22 May 2006)

Hi again,

Just to update - by chance there appears to be a groundswell of solidarity among the residents against the "Mgt Fee Rip Off!" A residents meeting is being held in the coming days with local TD's present to agree on how to proceed. 

An interesting twist is that many residents are not taking the angle regarding Mgt Company incompetence but more to do with the issue of the legality of paying for services that are normally paid for from taxes. eg roads, lighting, insurance for public areas etc. This is apart from the ripoff on the refuse collection.
The point is that they are making is that we are paying twice for these services and the minister for environment did agree with this point of view although nothing has happened since. There is an election coming up in less than a year so the politicians are going to get heat on this one.

Does anyone have any ideas on this?

Thanks again!​


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## CCOVICH (22 May 2006)

This thread started off about the refuse charge issue.

As I have said-if the Managing Agent can indeed prove that the €150,000 is a legitimate expense, there is no rip-off.  Poor/inadequate budgeting/estimation, yes, but if you are being charged on the basis of actual expenditure incurred, then there is no choice but to pay really.

The issue you have referred to in the post above is a much wider one, and is arguably beyond the scope of this thread.  It has been discussed on AAM before if you care to use the 'search' facility you will find the thread and you may wish to post there.


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## nai (22 May 2006)

CCOVICH said:
			
		

> _nai_-did this situation arise after the developer had sold all units in the development?
> 
> While we have had our own directors elected (the developer had no objections to this), the fact remains that they sill own units onsite and hence have de facto control.


 
Hi CCOVICH

Yes - the developer had sold all of the units on the site (just kept a few 5-bed detached houses for himself and his family to live in !). 

By you saying they had de-facto control - do you mean the developer owns a majority of the units ? i assume this is the case. Nonetheless - the op appears to be moving into a much broader issue as you have said (the whole legality of mgt co's and servicing of estates).

cheers,
nai


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## CCOVICH (22 May 2006)

By _de facto_ control I mean that the developer has a 'golden share' or some such provision so that they can control the development, even though they may only own one unit etc. and there are more owner directors than developer directors.

To illustrate, our directors can make minor decisions regarding expenditure etc, but we couldn't apply for planning permission to make alterations unless the developer agreed.

It's something I want to learn more about, I may actually request the legal opinion that our management company received on this issue


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## Chief Robert (22 May 2006)

CCOVICH said:
			
		

> This thread started off about the refuse charge issue.
> 
> As I have said-if the Managing Agent can indeed prove that the €150,000 is a legitimate expense, there is no rip-off. Poor/inadequate budgeting/estimation, yes, but if you are being charged on the basis of actual expenditure incurred, then there is no choice but to pay really.
> 
> The issue you have referred to in the post above is a much wider one, and is arguably beyond the scope of this thread. It has been discussed on AAM before if you care to use the 'search' facility you will find the thread and you may wish to post there.


 
I guess I am deviating to an extent from my original question, but I was hoping to emphasise the reputation of the Mgt Company and Agent. I did some quick checks. If waste collection reverted to the council it would cost €6 per bin. On average I put out a full bin once every 3 weeks which would equate to €104 for the year. Even if you put one out every week it would be little more than €300. That's tax deductible too which would take a chunk off it. 
_The 2005 Amenity Service Charge was €464 per unit, __ c €160 was in relation to the refuse service. Accordingly allowing for the defecit now the total charged to each dwelling is in the order of c. €330. _
If the Amenity Service Charge was €464, with €160 going towards refuse collection (then raised by the €177 per unit defecit) what the the other €304 was for in the Amenity Service Charge? 

I am working on getting a breakdown of these other costs. It seems excessive to me as a House owner, as opposed to an Apartment Owner.
I checked some of the other threads regarding the "legality" issue. I'll leave comments on that in those threads:
http://www.askaboutmoney.com/showthread.php?t=16988
and 
http://www.boards.ie/vbulletin/showthread.php?t=133336
and
http://www.askaboutmoney.com/showthread.php?t=17266

One question to the Moderators - is it okay to name the Mgt Agent? They have been mentioned in the Boards.ie thread above, but is it okay to name them on AAM? It would be interesting to see if others have had the same experience with the Agent.​


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## CCOVICH (22 May 2006)

As long as you don't say anything that is potentially defamatory (you have mentioned incompetence, which could be taken as such) then it's ok to name them.

However, please send a PM to _Brendan_ first, as it really his call.  Ih he gives to ok, then by all means go ahead.


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## Guest107 (22 May 2006)

Unless they are 'managing' a number of estates and developments then there is no point in naming them. If they appear to be sizeable and if there appears to be a wide pool of victims then its different of course . !!

CCOVICH says: Wider discussion split into this thread.

Please keep this thread on the refuse charge issue.


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## AKA (22 May 2006)

2Pack said:
			
		

> CCOVICH says: Wider discussion split into this thread.
> 
> Please keep this thread on the refuse charge issue.


 
Anyone know why tax relief can't be claimed on refuse charges that are part of a maintenance fee?


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## CCOVICH (22 May 2006)

AKA said:
			
		

> Anyone know why tax relief can't be claimed on refuse charges that are part of a maintenance fee?



It can-what makes you think that it can't?  At least one person in our development was able to make a claim for relief.  Have you talked to the Revenue about this?


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## jestertk (7 Jul 2006)

Did anyone see the feature on Primetime last night on service Charges ?

I thought the discussion was really interesting and shows the attitude of FF towards the people. The FF TD was so badly briefed on the subject and all the government is using the law reform commission as an excuse for doing nothing on this subject which affect mainly younger people. 
This is a great example of why government does not work as the government's function is one of regulation and I would expect my government to be pro active rather than reactive

Note to M Mulchay TD The council cannot take charge of estates until all the houses are complete per the developer


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## RainyDay (8 Jul 2006)

Labour have produced a useful leaflet on management companies which you can download from [broken link removed].

For the record, I'm a Labour party member.


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## ClubMan (8 Jul 2006)

Some possible inaccuracies in that leaflet:


> In today’s housing market, homebuyers often have no option but to join a management company.


 Of course homebuyers have an option. They don't necessarily have to buy in a development that is privately managed. 


> • The first years fees are frequently included in the overall mortgage package
> • Often it is only when owners receive a bill for management company fees in the second year that they realise their home is subject to a management company


 This does not sound correct to me and is certainly not my own experience with private management.


> Get your solicitor to confirm that service charge payments on your potential home are up to date


 Sound advice but this should be done as a matter of course and normally the seller cannot legally sell the property without discharging any outstanding management fees.


> Ensure that all insurances are in place and premia paid by the previous owner;


 It is not clear how this relates to the management company/fees issue. If the management fees are paid up then the relevant block and/or public liability insurance should be sorted. Is this actually referring to individual property/unit insurance or something?


> The landlord should be responsible for paying the management charge so look carefully at your lease agreement to make sure that this will not be passed on;


 Surely the landlord can pass on the management charge if s/he so chooses and the tenant agrees to it as one of the conditions of the lease agreement? Obviously only the householder is entitled to be a member/shareholder of the management company though.


> As a tenant, you can vote for the estate to be taken in charge by the Local Authority, by registering on the list of Local Government Electors.


 I have never heard of any such voting mechanism. Obviously you can vote for a local representative who might help lobby for your area to be taken in charge but that is a different matter. Also, I would expect that the views of the housholder (management company member/shareholder) rather than the tenant would carry more weight in these matters but I could be wrong.


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## RainyDay (9 Jul 2006)

Most reasonable persons would find a fair degree of nitpicking in Clubman's post.

The leaflet does not say as an absolute that homebuyers have no option but to join a management company. It says that '*often*, homebuyers have no option....'. Purchasers with limited budgets will find themselves squeezed towards apartment/townhouse developments, which inevitably involve management companies. I searched myhome.ie for properties for sale in Dublin at less than €250k and got 33 properties, only 4 of which looked like they wouldn't involve management companies. THe others were all apartments and townhouses. So is it theoretically possible for buyers on restricted budgets to avoid management companies? Yes, if they are prepared to dramatically reduce the number of properties they consider. In reality, this is not a practical approach for the majority of young FTBs.

In relation to the inclusion of the management fees within the overall sale price, I personally haven't come across this happening. I have heard politicians from Labour and (iirc) FG talking about this scenario recently. In many ways, this makes sense. From the purchasers short-term cash-flow point of view, it probably suits to include the in the mortgage rather than trying to fund this directly at time when they are financially strapped. From the developers point of view, it eliminates difficulties in chasing the money and disputes about value/service etc. I'm pretty sure Clubman's personal experience of house purchase was sometime in the 90's. I'm quiet prepared to accept that this approach is happening now. In fairness, any serious dispute of this point should be a bit stronger than 'didn't happen in my day'.



			
				ClubMan said:
			
		

> Sound advice but this should be done as a matter of course and normally the seller cannot legally sell the property without discharging any outstanding management fees.
> It is not clear how this relates to the management company/fees issue. If the management fees are paid up then the relevant block and/or public liability insurance should be sorted. Is this actually referring to individual property/unit insurance or something?



Indeed, ensuring that the management fees and insurance premia are up to date should happen as a matter of course. However, I'm pretty sure I've seen postings (here and/or boards.ie) of cases when this didn't happen, so it is sensible advice to any purchaser to be proactive on this.



			
				ClubMan said:
			
		

> Surely the landlord can pass on the management charge if s/he so chooses and the tenant agrees to it as one of the conditions of the lease agreement? Obviously only the householder is entitled to be a member/shareholder of the management company though.



I've never heard of a case where a tenant pays the management fee directly and becomes a member of the management company. In general, it is not really appropriate for tenants to hold this power, given the relative short-term nature of their involvement. It would be in many tenants interest (for example), not to pay into a 'sinking fund' to cover future maintenance costs, if they reckon they are not going to be in this property in 3-5 years time. A management company dominated by tenants would be dominated by short-term decisions. Also, the landlord can get full tax relief as an legitimate expense for the management fee. The tenant cannot.



			
				ClubMan said:
			
		

> I have never heard of any such voting mechanism. Obviously you can vote for a local representative who might help lobby for your area to be taken in charge but that is a different matter. Also, I would expect that the views of the housholder (management company member/shareholder) rather than the tenant would carry more weight in these matters but I could be wrong.



Are you stating that this mechanism doesn't exist because you haven't heard of it? The fact that you (and many others) haven't heard of this mechanism is a great reason for publishing this leaflet, to ensure tenants are aware of their rights.


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## igora (9 Jul 2006)

Hi, 

1. Does anyone know if a shareholder of a management company ( ie. a house owner) can be a "committee member " and have voting rights on the day to day running of the development without actually becoming a director of that company?

2. What happens in a situation where the management company for eg. goes bankrpupt - Is there then an issue for the director personally and could this interfere with / reflect on the individuals private business profile?.

All replies appreciated.


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## ClubMan (9 Jul 2006)

igora said:
			
		

> 1. Does anyone know if a shareholder of a management company ( ie. a house owner) can be a "committee member " and have voting rights on the day to day running of the development without actually becoming a director of that company?


 I don't think so. I think a shareholder/member who is elected to the board must sign a _CRO B10 _form and become a director if the management company is a limited company. Definitely the case with my own management company anyway. Obviously non director member/shareholders have a vote at general meetings.


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## RainyDay (9 Jul 2006)

igora said:
			
		

> 1. Does anyone know if a shareholder of a management company ( ie. a house owner) can be a "committee member " and have voting rights on the day to day running of the development without actually becoming a director of that company?



Even a director wouldn't have a huge involvement in the day-to-day running in most cases. If the management company takes on a managing agent, the agent will be responsible day-to-day. The real power depends on how the contract between the agent and the company is written.

I would guess that in practical terms, it may well be possible to exert influence without taking on a directorship by being the guy who does all the work. If you are the one who is prepared to write up a spec for the managing agent, get in competitive quotes from a few agents and analyse the responses, you may well be able to influence the direction taken. Similarly, if you provide support to the directors ("I know a great plumber who can sort that out"), you could become the power behind the throne.



			
				igora said:
			
		

> 2. What happens in a situation where the management company for eg. goes bankrpupt - Is there then an issue for the director personally and could this interfere with / reflect on the individuals private business profile?.


In theory, this could indeed be a reflection on you. In the worst case scenario, if the management company would found to have been trading in a fraudulent manner, you could be barred as a director for a period of time. I've never heard of anyone being barred in this way as a result of the activities of a management company (though I wouldn't have an exhaustive knowledge of this).


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## Kiddo (9 Jul 2006)

Getting back to the original reason for this thread, I live in the estate that Chief Robert refers to. We have lived here for three years and there was a defecit in the budget for two years which was explained by an overestimate as to the number of units that would be completed. We can only hope that the situation will resolve itself when all units are sold. The last phase goes on sale this autumn.

With regard to the waste charge..I did find it a little incredible that the management agent underestimated it by 100%. That said the 2006 budgeted waste charge works out at €246 per unit. Taking into account that it now costs €8 to buy a bin tag in South Dublin Co. Co. its cheaper than using SDCC, if you put your bin out every two weeks. We have received correspondance from the management agent encouraging all residents to recycle (there are huge bins provided for recycling) in order to reduce this charge. In addition we have a full time janitor who rotates the bins so that communal bins aren't overflowing and he deposits the bins back after the refuse has been collected...even the privately held bins (anyone with a side entrance).

With regards to the landscaping, IMO the estate is well landscaped and maintained. The grass in the common areas is cut on a regular basis and the plants/bushes are well looked after. During the winter the landscape company can be seen "hoovering" up the leaves. The landscape company can be seen regularly around the estate. winter or summer. Hardly 





> For example, it was quite irritating to be charged for "Lanscaping charges" when you don't see anything happen over the course of a year bar 1 annual walkaround the estate by people with a weedkiller gun and a spray mask!!!


 
Another house rule thats strictly adhered to is no clothes lines on the balconies and no satellite dishes which IMO really take away from any mixed development.

At the end of the day we were all made aware when purchasing that there would be a management charge involved. When we purchased in 2003 we were told it would be in the region of €300 per annum, at that time SDCC were collecting refuse. For 2006 we have been charged €478 which includes the refuse charge. Its hardly a "rip off"....

Having discussed the issue with a few of our friends who live in surrounding areas but in more traditional estates...the conclusion is that when local authorities "take in charge" estates that usually involves them cutting the grass in public areas on an infrequent basis and local residents (usually the same few) getting together to plant flower beds/paint over graffetii/clean up litter each year...so IMO its a small price to pay for a high level of service.

I have no connection with the management company or agents...but in this case,compared to other horror stories I 've heard..they are doing an ok job.


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## money man (10 Jul 2006)

Fair play kiddo, i am so sick of people whinging not only about the management company issue . it sounds like the estate is very well looked after which if you travel around is not as common as you would think. if the developer is not finished selling all the units then he is harly going to let the place get run down and affect his ability to sell the units.  the charge doesnt sound too high to me. the refuse issue is a difficult one however. you have someone to monitor the use of the bins etc which helps. if refuse collection is part of the service charge then there is no incentive to recycle. but on the positive side rented properties are guaranteed to have bins ( which most landlords dont bother doing) . if residents look after the estates what happens if some people rent out their houses and dont really care what the place looks like and doent fo their bit. also if your neighbour doesnt pay their service charge do you want to be on the board of directors that instructs legal proceedings against them? well done for speaking up though and not just going along with some of the rubbish (excuse pun) that is peddled out!


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## ClubMan (10 Jul 2006)

Kiddo said:
			
		

> At the end of the day we were all made aware when purchasing that there would be a management charge involved. When we purchased in 2003 we were told it would be in the region of €300 per annum, at that time SDCC were collecting refuse. For 2006 we have been charged €478 which includes the refuse charge. Its hardly a "rip off"....


Exactly. If management companies and the associated fees come as a surprise to some buyers then they should be getting onto their solicitor asking why they were not apprised of these details as part of the conveyancing process. Where they are aware of the situation (the vast majority of situations I would expect) then claiming that they are being ripped off is plain silly. The main area of legitimate complaint here is when the developer won't hand over control of the management company to the residents or a previous management company has gone bust or been struck off. At the buying stage these should be identified as risk factors and the buyer needs to weigh them up and make a calculated decision as to what to do. Just plunging blindly in and hoping for the best is not a good idea. The number of people who are members of a management company but still can't distinguish the company from the day to day management agent is astounding. If people are not happy with the way that their development is managed then they are always free to become active in their management company and exert more direct control over matters (e.g. run for election to the board of directors or get involved in any ad-hoc committees that are established).


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## Sunny (10 Jul 2006)

I have no doubt there are some good reputable management companies around but at the same time, I have no doubt that there are total cowboys operating as well. With the amount of money involved, I can't understand why these companies can't be regulated or monitored just like the banks, solicitors, builders etc etc....From reading various posts and articles on this topic, the one thing that I find standing out is the fustration that people feel because they feel like they have no power or anyone to turn to if they have issues with the company. How difficult would it be to ensure that all management companies have to register with a body just like the landlords now have to and give this body the power to deal with complaints etc...


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## ClubMan (10 Jul 2006)

Sunny said:
			
		

> I can't understand why these companies can't be regulated or monitored


 They are monitored (or should be) by their shareholders/members (i.e. usually the householders) and are regulated by the normal _CRO _rules that apply to limited companies. If some people want even more regulation then they can presumably expect to pay higher management fees as a result of the higher overheads. However it seems to me that some people just want somebody else (e.g. a state agency) to take care of things for them. If that's the case then they should buy somewhere other than a privately managed development.


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## pinkie123 (10 Jul 2006)

I don't understand why people are against paying for the upkeep of their area. I live in a new estate in dublin 24, up and coming area. At the moment the place is being kept very well, nice plants, trees etc. The mgt fees aren't too bad, mainly because I live in a duplex and not an apt. block. I fear that if the mgt company is gotten rid of, and its up to the council to manage the estate, that it will not be kept to the standard as of now. And go down the same route as other estates in dublin 24. Is this not a valid point?


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## ClubMan (10 Jul 2006)

If you don't want you area to be taken in charge and the management company dispensed with then you should become active in the management company and in explaining what you see as the benefits of having one to your fellow householders.


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## annR (9 Aug 2006)

I have no problem paying management fees for the upkeep of the area and my estate is nicely looked after.  However the fee is very high and adds up to a huge amount annually.  To be honest I actually can't afford to pay that much for upkeep of the estate.  Even though they send a breakdown of what the costs are, there's no real transparency i.e I don't know for sure that it really costs that much to have someone mow the grass etc!

Clubman, what steps do you think I could take to monitor the management company?  I'm just a normal house holder who is not especially interested in being part of the residents committee.  Does this mean that it's ok for me to be ripped off?

I say ripped off because it has recently come to light (pun intended) that our management company has been charging fees for lighting the estate while all the time, Fingal CC has actually been providing it.  They've said they were doing this pending confirmation from Fingal CC as to who was looking after this.  Fingal say no one approached them.  Mgmt company just kept charging even though they were not getting billed for the lighting.  Now they have a PR company answering any queries.  I think this is nothing short of fraud.

How are ordinary householders supposed to keep up with all of this if the mgmt company of which they are a member is not even taking phone calls?  it's impossible not to feel that this is just some 3rd party making lots of money off people who have nothing to go on except bills and the odd budget breakdown.


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## Guest107 (9 Aug 2006)

annR said:
			
		

> Now they have a PR company answering any queries.  I think this is nothing short of fraud.


yes it looks like  fraud, _you _are entitled to an answer from the management _company _which asks the management _agent _not a PR bunny of some sort .


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