# New apartment block - Management Fee Query



## New-Red

Hi,

I'm new to this site, so I hope I'm posting this in the right section.

I'm a first time buyer who recently went sale agreed on an apartment and everything was moving along well, until the issue of management fees arose.

It's a new apartment block with 23 units.  Only a few of them have been sold so far, and the fee for my one-bedroom apartment has been set at 1,700 euro.

My solicitor said that the builder has confirmed that this fee will not rise for the first year, but after that the contracts seem a bit vague about how the fee will be calculated in future.

Can anyone tell me if this is normal for new apartment blocks?
And if the other 19 units in the block remain unsold after another year or two, then will I be liable for a huge increase in fees?

Is there anything that I should ask my solicitor to have inserted into the contracts to protect me against this?   Such as a ceiling or maximum percentage increase year on year?


I've read through a lot of other threads on this forum and found some parts that were relevant to what I'm asking here, so I don't sound like I'm duplicating threads/posts.


Any advice would be very much appreciated.   Thanks!


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## Teknon

Hi

I'm am in the same boat as yourself, I'm going for a 2 bed and the fees are 1,990 a year!!!  My solicitor said there is little I can do to prevent the fee going up but that as a member of the management company together with the other residents we can question why the fees are high and insist the MC justify every last cent.

Management Fees are a real turn off to apt living and the sooner the government regulates this industry the better for the likes of us!

Hope all goes well!


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## New-Red

Cheers Teknon, Yeah its a bit scary!  Best of luck with yours as well, hopefully everything will work out!


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## ontour

At the time of the signing of the contract, it is not the amount of this year's fee that is important but the percentage share of the overall management cost that is assigned to you.  Currently it is virtually impossible to change this once you are in.  So for example if it is a development of 50 apartments of equal size and amenities, you would expect that you are liable for 2% of the management cost.  An annual management fee is not a charge for a service, it is your share of the cost of running the complex.

The annual cost will depend on many factors but at this stage it is important to see whether the development is constructed in a way that keeps the cost down.  Is the lighting of the common areas energy efficient?  Is there sufficient security cameras etc.  Are things like bicycle racks etc provided?  If the management company needs to provide or rectify any of these after the builder is goen, that will increase your management fee.

You should ask for a copy of the budget for the management company for the coming year.  This should tell you what the money is being spent on and what money is coming in.  It should be obvious whether or not it is based on the builder contributing for the unsold apartments.  It is normal practice that units should be contributing to the management funds once completed but as the management companies are generally run by the builder at the early stage, there tends to be a 'flexibility' in the interpretation.

You are at a point now where they want your money and have a good reason to answer your questions, you should maximise this opportunity as you may find that they are a lot slower to answer once you are in.

The key to a successful management company is the owners getting involved so when you do move in get to know the other residents and get involved.  It will cost you time but will save money and protect your investment / home.


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## New-Red

Thanks Ontour, that was a good informative reply, fair play.  That bit about the percentage share of the overall cost is something I definitely need to look into.

Thanks again!!


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## Manage - ClC

To be honest this figure of €1700 for a 1 bed is a little concerning. As most of the expensive equiptment id possibly still in warrenty should it be a new block this figure will increase dramatically when these warrenties cease. The developers are possibly insuring the block currently also and this will cause additional fees. Unfortunatly in a small block of apartments, service charges will always be high, this is due to the fact that only 35 service charges are servicing an entire building. You should have received a budget with the insurance details at entering the management company(you are a shareholder in this company). If you have not received this budget, contact the managing agent, they will send you one, this will cause the break down to be a little more transparent but again as this is a new block there are possibly several other over heads which are not applicable this year but will be in the budgets going further causing the service charge to go up. In these times where apartment blocks contain empty units for a considerable amount of time make sure that you as owner of one unit is not compensating for the lack of service charges coming in from the empty units. This is important as many owners have faced paying charges to manage an entire block where its only half empty.


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## New-Red

Hi Manage-CIC, thanks for the reply.

I haven't actually signed the contracts yet, everything is in place but this management fee dilemma is causing me to re-think buying it at all.  My solicitor said that he now has a copy of the budget for the fees for next year and I will be seeing him early next week to look through it.

I was told when putting in my bid that the fee was 1,700, but yesterday evening when I got home there was a letter from the solicitor telling me that the fee for 2010 is now 1,900 !!!

There are three apartments sold and they have been occupied for a few months now, so I'd guess insurance etc is already in place.
Yesterday I rang the auctioneer about all this and was told that the developer is happy for me to have it said in the contracts that the developer is responsible for the management fees of all unsold units and so I have nothing to worry about.

But if it has already gone up 200 euro then I think I have every right to feel worried.

There are only 23 apartments in the building, three sold plus possibly mine if I go ahead.   Really not sure what to do at this point


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## Yorrick

Make sure you get a look at the Lease Agreement and the Articles and Memorandum of ssociation.
The method of calculating the ManagemEnt Fee should be in the Lease Agreement. It is usually decided on a square footage ( sq metre) basis. Bear in mind that all apartments in your complex may not be the same square footage. 
The agreement should say for example that you are responsible for 2.5%. of annual budget.
The Multi Unit Development Bill going through the Dail will tidy up a lot of the issues surrounding apartment living. One of its sections states that the Management Company should have a meeting of shareholders i.e owners, each year in which they will present a budget for the coming year. The owners will vote on this and there must be at least 60% of the attendance in favour. 
The percentage you pay should be in the lease agreement.

The big problem about apartment living in Ireland is that when buying apartments many owners were either unaware or did  not realise that management fees were an annual occurrence.
A properly run management company can do a great job in providing  a pleasant place to live but a bad manageement company can be a disaster.
It does need for the owners to take an active part in the running of the complex either by operating the management company theemselves on a voluntary basis or by active attendance at A.G.M. and getting rid of management agents if necesary. It does take work and leadership.


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## orionstar21

New-Red, welcome to the world of ripoff apartments. In fact there is nothing stopping the increase of your fees to go up to 5k or more per year, NOTHING, scary huh. Your management fee is proportional to the amount of units so if everyone moved out, you'd have to pay all the management fees for all the block.  If someone offered me an apartment tomorrow for free I wouldn't take it. Its the altime ball n' chain around your neck.  The governement created this and then washed their hands of it so dont look for any regulation any time soon. I said it once and I'll say it again, its the biggest scam ever to grace the property market.  The management agent is separate from the management company and will never loose out. You will, trust me.  The agents normally own the shelf companies that clean the grass/windows and common areas too. The pay cheap labour to people doing this and charge your management company premium rates.  Oh, and wait till you go to make an inurance claim.  Nothing behind your door is covered by your fee, period.  Only stuff outside your door and thats not only it, if your neighbour leeks ontop of you, YOU have to pay it and if you manage to actually get an inusrance claim there could be a rediculous excess to pay.

Advice
Dont become a slave to the agent, they work for YOU, not the other way round.
Check your lease as mentioned above
Read your accounts and statements
Attend the AGMs
Definitely get involved in the residents committee but even better get someone on the board of directors (lot of thankless work)
Check the excess on your insurance policy as well as the termns and conditions.
SNAG the place immediately but some issues dont become visible until you start living there like the lack of noise/heat inuslation.

One final piece of advice, GET A MORTISE LOCK FOR YOUR APARTMENT, THESE APARTMENTS COME STANDARD WITH A LOCK THAT CAN BE BROKEN INTO IN LESS THAN 20 SECONDS.

With the recession and all that milarky there has been a surge in break ins.  Mine was done so I just want to pass on what I learned so no one else has to.  

You have been warned.  Apartments? Worse that the Ballymun towers, Knock them all down and start again.


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## DianeC401

As previous posters have said, the main issue for you will be to check the terms of your lease carefully and be prepared to take responsibility for the smooth running of the management company you will become a member of. 

Payment of management fees are no more of a ball and chain than paying your mortgage or any other utility bill.  Make sure to build them into your monthly budget calculations. It will be your responsibility as a member of the management company to ensure that fees in the years ahead are carefully managed so you get value for money and aren't grappling with escalating costs. You will get lots of good information about apartment living on the following websites: 

[broken link removed]
[broken link removed]

The only other point I would make is that in the past developers often set the first year’s management fees artificially low in order to attract interest. I sincerely hope that paying nearly €2k a year now, your fees are being more realistically priced. 

Personally I would be concerned that you are only the fourth person to move into a 23 unit block. With the current stagnant market I do hope these other units will be filled. It would significantly affect the security and aesthetics of your development if they were left uninhabited.

I live in an apartment myself and sometimes wonder whether I would go for an apartment again in the future. Slack regulation and the terrible financial state some developments are in would make me think twice.  BUT, if you have a good management company it really does make a difference to your environment and in some ways you have much more power to address  the anti-social behaviour of neighbours through house rules etc.  So I wouldn’t be warning you off them as vehemently as OrionStar! 

Good luck!


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## orionstar21

DianeC401, 
Payment of the fee exceeds a ball and chain.  At least you get mortgage intrest relief on that, you only get tax relief on the refuse part of a 2k management fee which is about 80 euros.  2k of someones Net Wages for what?  Thats colossal, I'm sorry I whole heartily disagree.  Kock them down, build them proplerly and reglulate them fairly.  
Time will tell......  My advice does not have any fancy bells or whistles, its the raw truth. Hindsight has 20/20 vision, anyone who asks me for advice on buying a home I always tell them to stay away from apartments. They are anti-social, comunity crushing money making rackets with detremental effects on peoples well being.  Of course if you have good job and a good solid apartment then to heck with everyone else I suppose.  Maybe I'm just cynical.  Anyone out there happy with their management fees and aprtments?


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## purpeller

orionstar21 said:


> DianeC401,
> Maybe I'm just cynical.  Anyone out there happy with their management fees and aprtments?



I think you've said it there, Orionstar21.  You're cynical and negative.
If there's a good managment agent, and they do exist, and oversight by owner occupiers, you can be happy.

I am very happy with my situation, albeit because I got involved and helped make things better.  And it isn't thankless, I often get thanked by people who live in the building.


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## orionstar21

Can you blame me?  Can you advise a good agent then?......  

You will go down as the only person I am aware of who is happy with paying unregulated, overpriced management fees, you must have a very secure job, I hope it lasts.


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## Juris

purpeller said:


> I think you've said it there, Orionstar21.  You're cynical and negative.
> If there's a good managment agent, and they do exist, and oversight by owner occupiers, you can be happy.
> 
> I am very happy with my situation, albeit because I got involved and helped make things better.  And it isn't thankless, I often get thanked by people who live in the building.



Sorry but although a newbie I felt I need to chime in here on this. Purpeller I'm not sure what trying to say calling someone cynical and negative on this matter. The dearth of legislation in this area is a clear and resounding expose of the corrupt mentality that has been and is prevalent in the management sector. Lets not kid around here. Charging someone the equivalent of 10% or more of yearly rent is not trivial, is not regulated and although you have found it productive to get involved (hope that continues to work for you) it lacks any transparency. There are virtually no legal protective measures for tenants in place as of yet. All the good will and community spirit will mean nothing before a management companies counsel in court. Furthermore as explained above by ontour where if you rent 1 apt in a 50 apt complex your management fee = 2% = "your share of the cost of running the complex" it does not grant you additional equity in, legal recourse against, or locus standi to enforce as against any defects in another tenants premises which may increase your personal management costs. You pay for someone else, often their negligence, poor material usage, construction etc with no recourse. Similarly if 25 of the 50 apts are left vacant and your fee where to double, your now 4% stake in the fee payment does not grant you greater equity in empty premises which may suffer damage and you have to cover it. How very Celtic Tiger.  

I'm truly glad you have found  management company you feel happy to deal with but if your trying to say many Irish management companies and developers are not widely engaged with profiteering I think your missing the reality of Irish real estate and how the last 10 years of corrupt politics has assisted them, and the desperate need to regulate through legislation. Its not surprising they remained unregulated throughout the boom when its the politicians who make the laws is it. 

If I'm in a management company, who just so happens to have close ties to a/the developer, who also happens to have close ties with (say own or have business interests with) contractors who do you think I will get to do my next paint job, my next lift maintenance. Thats right. Interweaving companies are a factor of Irish company law and little more than a law suit and applications for discovery (you should see that cost for laughs) will uproot the reality of a system of endemic corruption and back door profiteering where its basically a closed loop, even in tendering for maintenance. 

Can you explain the rise in many tenants management fees this year as opposed to last, even in complexes with full capacity. I can. Its called covering your loss. Developers/landlords who have lost out during the downturn try to pick up part of the loss in rental prices by upping the management fee. They may make cross agreements with another development: developer A has ties to subsid management co A, who manages developer B's complex while developer B has a management co to manage A's complex. If they all raise prices together = revenue stream cross-flow. 

Example:
Rent + management fee
'08 €2,000 + €2,000 = €26,000
'09 €1,800 + €3,000 = €24,600

Factor decreasing costs of materials for maintenance, vastly greater bargaining power of management companies as against contracting for workers (desperation in the industry means they will work for 25% less than last year just to see a paycheck) with many other potential savings as occurs during recession and even the gross loss of €1,600 above is not only wiped out but profits may be increased. Thats the reality. 

To the OP, I'm paying 0 in management fees officially where I'm renting. I say officially as I have discovered the management company have been overcharging for utilities to the tune of nearly 250% and misrepresenting utility costs. They may also, in league with the overall landlord, who is a well known figure in Irish property, be charging and accounting the apartment blocks utility fees to a franchise business adjoining the premises owned by the landlord, but I believe not declaring the residential usage to revenue and instead claiming the usage as business purpose sole. I spotted this about 7 months ago and after chasing management I finally caught up with them and made them sign a statement refusing to pay utility fees until the discrepancies were explained. They can't and seemed worried by my discoveries. The management company have been telling foreign nationals in my development (majority) that their false costs are real (ESB + Gas) direct supply charges by doctoring and issuing false statements and playing on their unfamiliarity and often lack of good English. Thats a criminal matter and I'm only waiting till after Christmas to bring the matter to the attention of the Gardai. I doubt their '10 will be as good as '09 from where I intend to put them. Be cynical, be vigilant and if you spot any abnormalities, inform all other residents and hunt as a pack. Irrespective of the lack of legislation we have very clear laws regards fraud. Hope it works out for you and everyone else. Slan.


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## orionstar21

At last! I'm not alone!  I said this in a different thread.  ALL the people I meet in my every day life HHHAATTTEE  this system.  Maybe they dont know how to use computers or the internet because everyone (excetp Juris) on this askaboutmoney website seems to be advocating their existance,,,...actively PROMOTIING if you will this sham.  You cannot deny your mind, body and spirit's own response when it tells you, "mate, you've just been robbed" right after paying those fees. I would mind paying it if it was 

proportional
fair
full transparancy
and most importantly (which also should go without saying) REGULATED!!!!!!!!!


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## Buddyg

You've only gone sale agreed? Do everything in your power to get out of ths. The fact that only 2-3 others have acutally bought there tells you everything. As one poster said these management fees could be any amount in a few years and you've just signed away a blank cheque if you buy.


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## New-Red

Thanks everyone for your replies, much appreciated.

Yes, buddy, getting out of the whole thing (before I get into it!) is something I'm seriously thinking about.

If there was any way of protecting myself against insane future hikes in the management fee, then I'd rather go ahead and buy it as its a smashing apartment and I really couldnt afford a house in the same area.

The developer owns all the commercial offices in the other side of the building so its very unlikely that they're going anywhere.   But yes, only 3 of the 23 units have been bought so far and 1,900 is very high for a one-bed apartment.

I'd be prepared to pay that, but if it starts hitting 2,500 within a year or two then I'd be in massive trouble.

Ideally I'd love to go ahead and close the sale, but most of the advice I'm getting (both here and elsewhere) seems to be telling me not to.

I'm a first time buyer as well, so I was scared enough as it was even before all this came up!!


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## orionstar21

New-Red
You say you cant afford a house,,... let me give you one final piece of advice.  How much are you paying for the aprtment?  How much is the house?  NOW,,,.... drum roll....... add 50k MINIMUM onto your apartments price.
whats that? i hear you say.  Well thats your (minimum) management fee over the life span of a 25 year motgage.  The lenders NEVER take that into account. Borrowers over look it.   Forget it dude, take the house!  It solid, secure, yours and you own everything not just chalkboards but the land its on too.


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## orionstar21

p.s. I wish someone gave me this advice before I bought mine.


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## New-Red

Hi Orionstar!

Mate, you seem very passionate about the subject (having read some of your posts on other threads as well as this one) and I realise that you're speaking from experience so I certainly appreciate your input.

About your last point, I know what you're saying makes perfect sense, but if I was to apply it to my own situation then the 50,000 that you rightly pointed out is added to the cost of my apartment, still wouldnt be enough to get me a house in the area.

My one-bed apt is costing 290k, theres no chance of me getting a house in the same area (certainly not a half-decent one) for 340k, plus the bank wouldnt loan me 340k.

But your point is very valid to others.

If I get a contract stating that I will only be liable for 1/23rd of the upkeep in my apartment, does that not protect me (or help protect me) against any hugely insane rises in my yearly fees?  (a genuine question, not a rhetorical one btw)


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## purpeller

A few points before I give on this board completely.

1) There was legislation published this year.  See here: 
[broken link removed]

2) Tenants have rights.  The (slow and nowhere near as good as they should be) PRTB are very pro-tenants.  

3) Developments that are not completed and all sold are very different to ones that are finished and occupied.

4) Of course I agree that regulation is important.  But it isn't there yet and in the meantime, developments need individuals to get involved and stop sitting around complaining.

Finally, Juris - why would you wait for 6 weeks to bring such serious allegations to the Gardaí?


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## shesells

Juris said:


> Lets not kid around here. Charging someone the equivalent of 10% or more of yearly rent is not trivial, is not regulated and although you have found it productive to get involved (hope that continues to work for you) it lacks any transparency. There are virtually no legal protective measures for tenants in place as of yet. All the good will and community spirit will mean nothing before a management companies counsel in court.
> 
> Furthermore as explained above by ontour where if you rent 1 apt in a 50 apt complex your management fee = 2% = "your share of the cost of running the complex" it does not grant you additional equity in, legal recourse against, or locus standi to enforce as against any defects in another tenants premises which may increase your personal management costs. You pay for someone else, often their negligence, poor material usage, construction etc with no recourse. Similarly if 25 of the 50 apts are left vacant and your fee where to double, your now 4% stake in the fee payment does not grant you greater equity in empty premises which may suffer damage and you have to cover it. How very Celtic Tiger.
> 
> I'm truly glad you have found  management company you feel happy to deal with but if your trying to say many Irish management companies and developers are not widely engaged with profiteering I think your missing the reality of Irish real estate and how the last 10 years of corrupt politics has assisted them, and the desperate need to regulate through legislation. Its not surprising they remained unregulated throughout the boom when its the politicians who make the laws is it.
> 
> If I'm in a management company, who just so happens to have close ties to a/the developer, who also happens to have close ties with (say own or have business interests with) contractors who do you think I will get to do my next paint job, my next lift maintenance. Thats right. Interweaving companies are a factor of Irish company law and little more than a law suit and applications for discovery (you should see that cost for laughs) will uproot the reality of a system of endemic corruption and back door profiteering where its basically a closed loop, even in tendering for maintenance.
> 
> Can you explain the rise in many tenants management fees this year as opposed to last, even in complexes with full capacity. I can. Its called covering your loss. Developers/landlords who have lost out during the downturn try to pick up part of the loss in rental prices by upping the management fee. They may make cross agreements with another development: developer A has ties to subsid management co A, who manages developer B's complex while developer B has a management co to manage A's complex. If they all raise prices together = revenue stream cross-flow.
> 
> Example:
> Rent + management fee
> '08 €2,000 + €2,000 = €26,000
> '09 €1,800 + €3,000 = €24,600
> 
> Factor decreasing costs of materials for maintenance, vastly greater bargaining power of management companies as against contracting for workers (desperation in the industry means they will work for 25% less than last year just to see a paycheck) with many other potential savings as occurs during recession and even the gross loss of €1,600 above is not only wiped out but profits may be increased. Thats the reality.
> 
> To the OP, I'm paying 0 in management fees officially where I'm renting. I say officially as I have discovered the management company have been overcharging for utilities to the tune of nearly 250% and misrepresenting utility costs. They may also, in league with the overall landlord, who is a well known figure in Irish property, be charging and accounting the apartment blocks utility fees to a franchise business adjoining the premises owned by the landlord, but I believe not declaring the residential usage to revenue and instead claiming the usage as business purpose sole. I spotted this about 7 months ago and after chasing management I finally caught up with them and made them sign a statement refusing to pay utility fees until the discrepancies were explained. They can't and seemed worried by my discoveries. The management company have been telling foreign nationals in my development (majority) that their false costs are real (ESB + Gas) direct supply charges by doctoring and issuing false statements and playing on their unfamiliarity and often lack of good English. Thats a criminal matter and I'm only waiting till after Christmas to bring the matter to the attention of the Gardai. I doubt their '10 will be as good as '09 from where I intend to put them. Be cynical, be vigilant and if you spot any abnormalities, inform all other residents and hunt as a pack. Irrespective of the lack of legislation we have very clear laws regards fraud. Hope it works out for you and everyone else. Slan.



Am I the only person confused by this post?? For starters there's a clear misunderstanding of the management company/agent thing but also where does tenant come into it?

If you rent an apartment in a managed development you pay zero management fees and you have zero input into affairs of the management company


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## Juris

New-Red said:


> Hi Orionstar!
> 
> If I get a contract stating that I will only be liable for 1/23rd of the upkeep in my apartment, does that not protect me (or help protect me) against any hugely insane rises in my yearly fees?  (a genuine question, not a rhetorical one btw)



Hi New-Red. Your contract to only pay for 1/23rd may be irregular but there is no legal bar to implementing it as far as I am aware. However, there will also be no legal bar from the management co. increasing to double the current amount. For the sake of math lets make it a 24 apartment complex. 

You sign a contract stipulating 1/24th payment of management fee currently at €1,900. Imagine all 24 apartments are filled. Management are happy with €1,900 x 24 = €45,600. 

3 years later 12 people have left the apartments. Management have now got intake of €22,800 = €1,900 x 12. The management could double your management fee to €3,800 to cover their loss (although not a legal loss but prospective) and still claim you were not paying for the other empty apartments. Although it is clear what is going on legally there is little at the current time to protect the tenant. 

If I were arguing against you in a court (as defense for management) I would site the inability to forsee increasing costs when signing the contract, the 'fact' that costs of maintenance for common grounds/lifts etc remain the same or have risen (and health and safety obligations to upkeep by statute to back it) irrespective of the numbers of units occupied. Net effect is I could likely nullify your contracts purpose (i.e keeping the managements costs down) without having to try and nullify the contract itself = valid but useless piece of paper. Proving that costs have not risen would be difficult for you if the management co. were engaging companies they are (cough) 'comfortable with' to do maintenance and funneling the revenue back to themselves through the back door. I'm not your solicitor but I would ask them if they have a better way to do it, such as an agreed cap (management co. may have a heart attack with such proposals but try anyway) or alternative method. I'm sure they will be helpful if they can. Also be sure to query the potency of the new legislation with them and outline how it will relate to you. If they don't know tell them to get acquainted with it, quickly. 

May I ask why you are purchasing now, at this moment in time. I know its a broad question and I don't mean to pry or put you off but with the worst budget in Irish history about to hit, a mass destabilisation in the housing market, likely increased property taxes (may be small, may be the same as your management fee) in that budget and lending capability likely to improve if NAMA's ensures bank liquidity improvement (I'm wary on that but however you did say that getting a house was impossible due to current lending criteria) I'm just wondering if the deal on the apt is too good to wait really. Sorry if I sound like I'm prying, just concerned as have family and friends who have gotten into financial strife with recent purchases and mortgages. 

@shesells: Tenant comes from someone residing in a premises for rent. I'm coming from a tenants perspective, not owner. As for not paying a management fee myself the point is the management co, while stating there is no direct management fee being paid by tenants (as he stated the landlord was paying him from rent accrued, naturally) was in reality accumulating a fee through fraud on utility bills. The landlord was/is assisting/directing in that fraud, and potentially using some of that fraudulent accrual to pay off his own management fees. Circular fraud. As for not understanding the "management company/agent thing" please clarify what you feel is wrong?

@purpeller. Hi. My own dealings with the PRTB (not huge thank god) have been very pro landlord but everyone seems to have their own totally valid viewpoint. It is an arbitration board only and unfortunately although they can be beneficial it can also be a slightly haphazard experience for some. I'm looking forward to the legislation as well, its been long enough coming and in the current economic climate will be battle tested to within an inch of its life very soon I'm sure. It'll be great for everyone to know where they stand, especially in these uncertain times. I agree that anyone buying in a development should make it a priority to get acquainted with all aspects of the management and community dealings. The 3 of 23 sold in the OP's situation would make me nervous as others have said. If its your home be proactive, it can really help. As for waiting the 6 weeks, multiple reasons. 

1. I don't want to disturb my Christmas playing with the courts and Gardai. 
2. Will be moving out soon as over the lease period, running on rolling 30 day. I have dependent family with me and until I have them somewhere comfortable I don't want to raise a storm. 
3. Gardai unlikely at Christmas to give a crap about investigating fraud. Drunk drivers make better targets for arrest targets.  
4. Even if they are being fraudulent and slimy I don't want to hammer someone else's Christmas with fraud allegations. January is fine.


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## purpeller

Juris said:


> You sign a contract stipulating 1/24th payment of management fee currently at €1,900. Imagine all 24 apartments are filled. Management are happy with €1,900 x 24 = €45,600.
> 
> 3 years later 12 people have left the apartments. Management have now got intake of €22,800 = €1,900 x 12.



I know it's a hypothetical but what do you mean by "12 people have left the apartments"?  If an apartment is sold, then someone else owes the management company the service charge, regardless of whether it's vacant or not.


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## Juris

purpeller said:


> I know it's a hypothetical but what do you mean by "12 people have left the apartments"? If an apartment is sold, then someone else owes the management company the service charge, regardless of whether it's vacant or not.


 
Over the course of the next 3 years I fear an escalation in repo's due to mortgage default. Although the bank would then be liable to pay management fees in lieu of the original clients the fact is many developers (who may own or be heavily affiliated with management companies, even if not as far as is registered with the CRO on the face) may be indebted to the banks. The banks will use their hold/position on this, potentially offsetting payment as against money owed to them which the management will likely require to function at 100%. If I was a management company I know I would prefer to increase costs to non-bank held occupied premises, engage in creative accounting (as many are already engaged in now even without such pressures), rather than try to enforce payment from the banks directly for management costs. ****ing off banks or fighting them in court is an expense few managements companies have either the resources, courage or stupidity to engage in. Even if you win a battle you can lose the war in the long run against these people. They are your credit line after all. Charging the little guy more is more like Irish business practice.

Please don't tell me there is no underhanded interplay such as this in Irish business as its a simple reality and is becoming more and more evident ever day. I'm not fighting with you on this as its clear your very clued in and savvy from your comments.

I would advise increased vigilence in these times from those in developments. Just ensure as best you can that this does not become a practice which goes unchallenged. The problem may be proving it. As you said yourself, be proactive, engage in participation, monitor budgetary expenature as best you can and be vigilent.

Although this is all predictive re the next 3-5 years when a person is entering into a 25-30 year mortgage and therefore massive longterm obligation I feel cynicism may be better than the blind sheep like faith and trust we collectively engaged in during the Celtic Tiger. Look where that got us.

Having had to call the Gardai and fire brigade at 12.30am last night to break the development gates to gain access (and ensure 100+ others could get out particularly in a fire situation) while management stated the work they contracted 'their man' to do was safe (brigade disagree after 6 of them couldn't break open the gate without equipment) I have no faith many such unregulated companies have the best interests of tenents/clients at heart. Solicitors will be brought in.


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## shesells

Going back to the OP. We pay €1100 for a 3 bed. Your fees sound excessive.


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## New-Red

Juris, thanks for the reply mate. Very informative. And capping the fee is a good idea, and worth a shot at least.   As for the timing, no there's no reason why I cant wait a bit longer.  If I could iron out these fee issues then I'd be happy to go ahead, but if not, then I will pull out of the sale and then wait and see how other things pan out, as you suggested.

Shesells, yes the fees sound very excessive.  There's underground parking with a barrier, elevators, etc so I can understand them adding more on for these but 1,900 for a one-bed seems far too high alright.


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## purpeller

While I agree €1900 is excessive, it may be that the company is not in good shape.  My own fees are similar to that level and we are going through a period of sorting out major problems with bad managing agents over 8 years, with only one proper year of management and oversight.  We (the board of directors) wanted to reduce the fees this year but we have so much debt owing (which is being pursued through the courts) that we couldn't afford the income drop.  

New-Red: The number of lifts will increase the costs as well.  Have you gotten a look at the accounts yet?


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## New-Red

Hi Purpeller, I will finally get a look at the budget etc today, meeting the solicitor to discuss it all at lunch-time today.

I guess the 1900 is just about do-able for me, but its what happens over the next few years that really concerns me, with only a few of the units sold.

Hopefully what I see on paper today will give me some sort of indication about whats going on...


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## southside

developer agreeing to cover the management fee fopr any unsold units???  BE VERY CAREFUL, he will be happy to walk away from this too if the development goes bust.  You can be sure that it is a stand alone development company and you will have recourse to nothing and no one.  Your solicitor should of appraised you of this massive shortcoming in the developers offer.  Run fast and far is my advice.


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## New-Red

Southside, thanks for the reply.

So look, is the general consensus that it will just end in disaster if I buy into this apartment due to the fact that they've had units for sale for a year and only 3 out of 23 have sold so far?

And if I cant buy a house in the area then the next best thing is to buy an apartment in a block that has over 80% occupancy?

Or at least thats what I'm reading into the comments so far.

Ideally I'd still love to buy this one, but all advice seems to say not to. I'll be really disappointed to have to withdraw my offer but looks like I dont have much choice.

I'm a first time buyer who has never lived in an apartment so I'd best go with the advice given.

Thanks again to everyone who has taken the time to reply.

Much appreciated.


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## Grace1974

Hi there,

What did you decide to do in the end?

I own an apartment and have to pay extortionate service charges every year.  I then get a blase newsletter suggesting that they get security guards put it!  There isn't even a crime problem at the development.

These companies are a rip off.  They are an absolute disgrace.

I have been getting bills from a utility company, something to do with water.  I can't make head nor tail of it.  Surely the local water board should be charging for water not these sharks?  But apparently they are something to do with the management company.

I let the apartment out and I get charged by this company when the property is empty.  If the tenant doesn't pay their bill, they charge it to me as owner.

I've had enough of this.  My hands seem to be tied.  If anyone has any experience of taking on these companies or are aware of government legislation, I'd love to hear from you.

Many thanks.


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## onq

Could I jump in and ask are these parts of the service industry regulated in any way?

Perhaps there is a way forward there, .

ONQ.

PS Oops! Sorry, just read juris excellent post.


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## queenlex

*management fees-apartments*

After reading this thread my idea of buying an apartment over the next few years is becoming just that an idea.  

I was thinking of putting in a cheeky/what I think is reasonable offer in a year or two when we might have an idea of future expenses connected to property ownership like water charges, property taxes and future energy prices for property owners in this country but this issue of the apparent lack of regulation in this area of management fees was really holding me back too...from this thread asking what future management fees are is like asking how long is a piece of string!!  

Feel sorry for the OP though and anyone in a similar position it seems the last few years people in this country dont do their homework before buying though at all is that fair??


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## shesells

Grace1974 said:


> Hi there,
> 
> I have been getting bills from a utility company, something to do with water.  I can't make head nor tail of it.  Surely the local water board should be charging for water not these sharks?  But apparently they are something to do with the management company.



Sounds like you're not in Ireland? No water boards here...yet. AAM is an Irish based site where advice given is relevant to the situation here.


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## ontour

Grace1974 said:


> I own an apartment and have to pay extortionate service charges every year.  I then get a blase newsletter suggesting that they get security guards put it!  There isn't even a crime problem at the development.
> 
> These companies are a rip off.  They are an absolute disgrace.
> 
> I have been getting bills from a utility company, something to do with water.  I can't make head nor tail of it.  Surely the local water board should be charging for water not these sharks?  But apparently they are something to do with the management company.
> 
> I let the apartment out and I get charged by this company when the property is empty.  If the tenant doesn't pay their bill, they charge it to me as owner.
> 
> I've had enough of this.  My hands seem to be tied.  If anyone has any experience of taking on these companies or are aware of government legislation,



The main problem with taking on the company is that you are part of the company.  Many management companies do not run well but it is usually because the members do not get involved so agents and service providers ride the gravy train.  I take it from your post that you do not get involved in the running of the company.  From your post I would suggest that you should question whether you have the skills or time to be a competent landlord.

There is legislation working its way through in the Multi Unit Development Act which would be worth a read.  In most cases management company fees will rise in the future due to inadequate sinking funds when the cyclical tasks of roof repairs, lift replacement etc arise.  Costs like block insurance are also rising significantly at the moment


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## shesells

Well said ontour!! At times like this I wish AAM had a "thanks" button like other fora


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