Apartment Service Charges

You'll have to forgive my ignorance in this area; despite paying service charges for years, I'm only recently really looking into it, as charges seem to rise and rise.
I don't have a lease from the management company, I have a mortgage on my apartment with Dublin City Council. There isn't a seperate management company managing our complex, it's the parent company that owns the whole complex that I'm dealing with.
As owner-occupiers, we don't have anyone mediating between ourselves and the management. We're all dealing with them individually, not a good situation in my opinion.

Ok.
You'll have to forgive my ignorance in this area but despite paying service charges for years, I'm only recently really looking into it, as charges seem to rise and rise.

I asked in an earlier post how I could tell if the charges for my apartment were fair or correct. My service charges have risen year on year, until this year when they reduced very slightly.

A member kindly said that I should check my lease, as this will outline how my service charges are calculated.

shesells said:

You need to check your lease. The method of calculating your fees will be detailed in that. For example in our budget it's worked out with each unit type paying a certain percentage of the budget. Which is not actually fair as it treats own door units the same way as shared entrance units (where those shared entrance units get extra services such as common area lighting and cleaning). Other developments similar to ours don't do this.

However, while I know I'll be paying x% of the budget, we don't know how much the budget will be. So it's still difficult to predict.

Have you considered becoming a director of your management company so you can be more involved in the budget preparation process?

Click to expand...

.....but I don't have a lease from the management company I have a mortgage on my apartment with Dublin City Council.

There isn't a seperate management company managing our complex, it's the parent company that owns the whole complex that I'm dealing with.
As owner-occupiers, we don't have anyone mediating between ourselves and the management. We're all dealing with them individually, which is not a good situation in my opinion.

Does anyone have any thoughts/experiences that might help me? I have asked the management co for a breakdown of charges, but they've just sent me a copy of the costings for the whole complex!

If you sum the cost and divide it by the number of dwellings in the complex you should be able to get a rough figure on what the cost per dwelling is.

Some management companies that have a mix of aparments and houses in the same complex normally charge apartments more than the houses.

What is the cost of your management fees ?

If you live in an apartment you don't own the apartment, you have a lease from the management company (of which you are a member). Regardless of who your mortgage is with, you will have signed a lease (sales deeds) at purchase.

As an owner and a member of your management company you are entitled to an AGM at least every 15 months, a copy of the budget, and annual accounts every year. Have you had any of these? I would suggest looking up your management company on www.cro.ie and downloading the latest accounts if you don't already have them. There is a small fee, a couple of euro I think.

An AGM would give you a forum to address your concerns with other owners and the Directors of the Management Company. Have you attended one?

alexandra12 said:

If you sum the cost and divide it by the number of dwellings in the complex you should be able to get a rough figure on what the cost per dwelling is.

Click to expand...

The assignment of charges is usually based on some or all of the following factors; size of apartment, number of bedrooms, floor of apartment, whether it is a penthouse or not, number of units in the block, whether there is a lift in the block, underground or above ground parking spaces etc etc. Based on these factors each unit is assigned a percentage share of the cost of running the development. One person could be be legitimately paying four times more than another owner depending on how the percentage was assigned.

When you purchased the unit your solicitor should have explained your commitments to the management company and the share of the running cost you were liable for.

Have a read of the key posts which link to some excellent resources that will give you an indication of what drives service charges up and what keeps them down.

If your leasing the apartment and you have a mortgage for 30 years.
What happens when the 30 years is up , do you have to refresh the lease with another mortgage ?

No - you can't own an apartment, due to shared walls, floors etc. Your front wall is probably someone elses front wall and your floor may be someone elses ceiling. So you lease an apartment from the management company that owns the buildings, and by doing so you become a member of the management company.

A lease on an apartment in this way is what people get when they "buy" an apartment. Our lease is 1,000 years long, well 994 now! Your mortgage is dealt with in the same way as it would be if you bought a house.

..

Thanks all, some very valuable and enlightening information there. No I have never attended an AGM or been made aware of one. I'm sure I can get a breakdown of my personal service charge if I ask for one? I have no way of knowing what others in my complex are paying. My bill for 2010 is just under €1800, but I've nothing to compare that too, though I feel our charges are high for the so-called service we get.

Mine is about 350 a year !

alexandra12 said:

Mine is about 350 a year !

Click to expand...

As mentioned above, there are ten or twenty factors involved in calculating fees, just mentioning a number is of no use for comparison.

Fees in our development go from approx 400 to 1500. Again those figures are useless unless I post a breakdown of services and qualifying factors.

The OP needs to see accounts and budgets for their development to see what theirs are based on.

Hi TP,
Like you I also own an apt bought through the Affordable Housing scheme from DCC, I'm guessing as your mortgage is with DCC you're purchased via Shared Ownership. When you purchsed your solicitor and/or DCC should've outlined the cost of the Service Charge and you should ask for this eventhough you're living there a while.

Up to the time you bought, DCC would've been covering the Service Charge, as they purchased the apt from the developer in the first place and were liable for the SC until you moved in. Check the purchase contract you have with DCC it should mention it in there or ring DCC.

As you're living in an apt complex, regardless of how you funded the purchase you should still obtain a copy of the lease; the lease is on the apt....as in "lease-hold" so you still need it eventhough you have a mortgage due to shared areas in an apt block legally you "lease" the apt from the developer.

Find out who the Managing Agent is , they're the people who manage the development on behalf of the management company. Mgmt company is made up of the owners within the development and once you find out who the managing agent is you can contact them about service charges etc.

Just to let you know, SC's go up nearly every year for the first few years in a development due to inaccurate budgeting of costs for the first couple of years the development is in existence, it's pretty normal from what I gather.

My advice is contact the Managing Agent and buy a copy of Robert Gogan's book "The Essential Guide to Apartment Living in Ireland"...it's the best €15 you'll spend! As it tells it like it is when buying/living in an apartment.

Best of luck,
FTB1975

FTB1975 said:

As you're living in an apt complex, regardless of how you funded the purchase you should still obtain a copy of the lease; the lease is on the apt....as in "lease-hold" so you still need it eventhough you have a mortgage due to shared areas in an apt block legally you "lease" the apt from the developer.

....

Just to let you know, SC's go up nearly every year for the first few years in a development due to inaccurate budgeting of costs for the first couple of years the development is in existence, it's pretty normal from what I gather.

Click to expand...

You lease your apartment from the Management Company and not the developer. Once all the apartments are sold the developer retains no interest in a development.

Regarding service charges, they don't always go up. If you have proactive directors they can and should go down. Our charges have gone down year on year since the owners took over 5 years ago.

Thanks for that FTB; appreciate the info.