Balcony repairs - who has to pay

SimpleWorried

Registered User
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I live in a house in a mixed development estate. The estate has houses and apartments.
A problem with the apartments balconies was discovered and for safety reasons apartment owners have been told not to use them until they are inspected and repaired.

The cost of repair of the balconies will be a substantial cost. The management company are claiming the cost of the repair will need to be paid for by everyone, apartment and house owners.
As a house owner I do not understand why I have to pay for an apartment owners balcony.

The managements company's stance of this is that the repair is the responsibility of the management company. Every owner is a member of the management company so then the cost of the repair should be shared equally among all members.(NOTE: Each apartment has its own balcony for its own exclusion use i.e. the balconies are not common areas for use by everyone)

On top of this:
The "common areas" where never transferred from the developer to the management company. The developer is now in receivership and the receiver has stated it has nothing to do with them.
If the common areas are not transferred to the management company, can members of the management company really be forced to pay the repair costs.

Shouldn't the management company charge only the apartment owners, rather than all owners. They suggested if they don't charge everyone there could be a legal challenge?

You thoughts and advice welcome
Thanks
 

Monbretia

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1,638
I don't know the answer but my brother worked for a company in the UK at one stage where there was always problems when lift repairs were needed, the ground floor residents never wanted to pay for lift repairs as they didn't use it obviously but the system was all residents in the development had to contribute to all repairs.
 

elcato

Moderator
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3,176
You are a member of the management company and shoold raise your objection at the AGM. I presume they will need to pass a vote on the repairs anyway as the annual budget needs to be passed. how many heads have you on the houses side ? You need to start campaigning them.
 

Andy836

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372
Balcony repairs, if applicable to all units are typically charged to the management company. The management company is ultimately responsible for maintaining structurally sound apartment buildings. After all, an apartment buyer doesn't actually buy the apartment walls, floors etc. They buy the space inside those walls & floors & windows etc.

If your house is part of the same management company then your part of that. Contributions are typically made on a pro rata basis so you're monthly management fee will be much less than the management fee of the apartments so your contribution to fixing this will be much less than that of the apartment owners.
 
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Didn't the MUD act stop apartment owners being charged for services that they do not avail of? i.e. fair cost apportionment. I think I read that.
 

Palerider

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You are either a member of the OMC or you are not, if you are then costs required to maintain or improve common areas are shared equally, in your case you raise a good point as these are not common areas and should refer to your house rules with the managing agent can get to you.

I have experience of this just not in Ireland, in my case all owners in the apartments paid to repair the balconies but check your rules.
 

lantus

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293
Service fee apportionment is stipulated in the primary lease and is how all service fees should be collected including savings for unforeseen expenses.

Generally houses are separate to common buildings but you need to check.
 

Threadser

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I am a volunteer director of an OMC in a mixed development. In the budget charges that relate to apartments such as lift maintenance and common area cleaning are charged to Apartment owners only. Hence management fees for apartment owners are higher. Charges such as ground maintenance and bin collection apply to to all units. I would imagine in this instance that the cost of the balcony repairs would be charged to apartment owners only.
 

SimpleWorried

Registered User
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11
Thanks all, the OMC are suggesting putting a levy on each unit outside of the annual service charge to pay for this. Not sure they are allowed do that?

Houses don't have a lease agreement so I'm not sure where to check this?

With the common areas not transferred from the (now bust) developer, can they levy a charge onto its members for something they don't legally own?
 

mathepac

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6,772
@SimpleWorried you keep referring to the OMC as "they". Surely the OMC consists of property owners in the development, so the correct pronoun is "we". The annual budget, or changes to it, must be voted on by the members of the OMC, not imposed as you seem to perceive it. Do you attend AGMs? Do you get notices about them?
 

SimpleWorried

Registered User
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11
@mathrpac True, I should say we, but I'm referring to the directors and agent when I say 'they'.
Anyway the plan is to hold an EGM, vote for the preferred repair Option and then charge a levy to members, which is outside of the standard service charge. Can the OMC impose a levy without it being voted on?
I cannot see any rule that allows a levy to be imposed on top of the service charge.
The MUD act states funds from service charges are not allowed to be used for issues under the developers remit unless 75% of members sign off on it. So the OCM cannot pay for repairs out of service charge.
So we can't use the service charge money and I'm questioning the right of the OMC to impose a levy. Its a mess.
 

Jim Stafford

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459
Its a mess.
The issue with some OMCs is that they are ran by volunteers who do not have the necessary experience or knowledge. The issue is further compounded by advising solicitors who do not understand the complexities of property/company law etc.

I once had a client in a similar scenario (i.e. living in a house on an Estate) and, given the particular terms of the documentation we argued that any levy on our client for structural work to the apartments was:
  • In breach of contract.
  • Was an attempted "Oppression" (within the meaning of the Companies Acts) of our client who was a minority shareholder.
Rightly or wrongly, the OMC backed down. However, our client's professional fees came to about €8,000 + VAT. He viewed the fees incurred as a good investment, as it set a precedent for future "rows".

In order to obtain definitive advice you need to instruct an experienced solicitor who will require the full "bible" of documentation in order to review it.

Regards

Jim Stafford
 

lantus

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293
So houses should have a lease, it's the only way they can be legally bound into the omc.

Any repair needs to form part of the service fee cost but could be separate subject to timings and egm approval of the motion.

The 75% mud act section refers to scenarios where the developer is on site and building. To prevent them using fees to build actual units or repair unfinished units.

There is a national problem with sinking funds which is going to hit hard in the next 5 to 15 years as major repairs need undertaking. Not a good time.
 

SimpleWorried

Registered User
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11
Thanks @lantus and Jim for your updates

I thought the 75% approval would apply since the common areas were never transferred the the management company and are still in the name of the developers?

The MUD act states the costs and expenses should take account of the respective level of use of any common area by the owners of different classes of units.
My understanding of this is that since houses have zero use of the balcony's and apartments have exclusive 100% then the costs of repair should be apportioned similarly?
 

SimpleWorried

Registered User
Messages
11
Just an update on this. Our Management Company got independent legal advise on this issue and concluded that the Houses did not have to contribute to the repair costs of the apartments balconies. What it boiled down to was that the balconies are not defined as 'Common Areas' so they do not need to be contributed to by all.
 
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