unsold apartment - management fees?

H

hippo.hi

Registered User
Messages
22
I appreciate your time reading this, and will be thankful if you have any ideas and tips how to deal with the situation.
Background information
New development (about 3 years or so).
200 apartments
Roughly 40 unsold, 20 of them rented by the builders
Managing Company – directors are the builders
Management Agent – Wyse
We are in nearly 80 000 debt. Property is poorly managed! Builder do not fix outstanding work.

Are builders obliged paying for the unsold apartments (managing fees)? At least for the part of them that is occupied by tenants? Surely they are owners of those properties (the builders). The figures don’t match either. We are billed for things as people working for the directors for their phones. Gardner that nobody have ever seen and so on. How can we go on for getting a resident director, getting independent audit (currently audit done by the builders accountents)

Do we have any rights and say?
I know we are obliged to pay the bill we are given, but this is over 50% increase for us. And we are afraid that builders will try to make money out of us, to put pressure on us to sign off the unfinished work!
 
I forgot to mention - there are 60 owners keen on getting this sorted, all currently looking for information on actions
 
The builder should definitely be paying the fees on the units that they own.

The empty units may be tied up in some complex limbo but one would feel they should be liable for the costs on these.

They clearly should be liable for costs on the ones rented.

This is an unfortunate situation and the residents committee will be in a lose lose situation.

The builder, most likely being the client, of the manging company and the whole situation is far from desirable.
The only way I see to get the builder to cough up would be through a legal action - after appropriate attempts through the agent requesting payment in the normal fashion.
The rented ones should be tied into the managing agent and service charge obligatory.
The unsold ones, perhaps more complex and unfortunate situation.

I could see this coing for years now and there is huge opportunity for a private agency to represent residents committees in a professional advisory capacity. From the behaviour we saw in the boom to t converse described above where the builder still "robs" the final customers.
 
I may consider media assistance in the case. It's a big developer with allot of properties for sale!

I will contact the Directors in writing, asking them if there is way to get independent financial audit. And if there was bad managing of funds, steps to prevent it in the future! I will also say that if I don't get response, I will go public with the issue and search legal advise.

We have contacted local government too, and there is meeting arranged to discuss actions.

I really don't mind paying the shortfall that much, I just want my property well managed and steps taken to prevent similar situations in the future. Also fair explenation why this happen, and fair statements!
 
Is there a residents committee in place? From previous experience in this type of situation, it is my view that when a group of residents has complaints about this type of thing, it is best to speak with a common voice, through a committee which represents all residents/owners rather than people individually contacting developers/directors.

If a meeting is arranged with a local govt representative, wait for their advice on how to proceed rather than threatening the media, which will only antagonise the developer in question and could make the situation worse.
 
I'm open to correction on this but my understanding is that the only thing that requires an owner to contribute to the costs is the lease agreement. Since the builder didn't sign one (even if they're renting the units out), there's nothing compelling them to pay for void units. This causes a problem because most lease agreement specify a percentage of the costs leaving a big black hole in the accounts.

Most builders will cover part of the costs to keep the estate/block afloat until they can get them sold and get out but they don't have to. My own estate suffered badly because the developer left us with a hole of over €100k.

When an AGM is held (which it should be after 18 months and then every 12 months after that) and if the developer didn't give themselves 'golden shares', you can vote them off the board of directors and vote some of the owners on instead. It will help you control your expenses but you'll still have to try to find some way to strong arm money from the developer.

Would you mind saying (or PMing me) the name of the developer?
 

I am in a similar situation and this is my understanding also. Unfortunately, legally the developer does not have to cover the fees for those apts.
 
What is the situation for any new purchasers of these apartments? Will they be taking on part of the debt when they buy into the development, and are they made aware of the issue when purchasing?
 
I dont' want to be smart, but I don't think the builders will be kind enought to inform them! And yes, the new buyers are asked to pay part of their fees due to the outstanding mony
 

I would suggest contacting your local government representative...unfortunately many of them will not be aware of the issues at hand...in fact I'd say none of them in our area are aware of the implications.

We are having similiar issues with developers now who are looking for fees for acting as directors. We are debating all options. It is very time consuming and frustrating. The agent is also saying the directors are refusing to release details such as state of finances of the account details. We will look at the http://www.odce.ie/

Media coverage could affect the future sale of your apts but in your current scenario you would have trouble selling them anyway.

It sounds like the developer is not going to cooperate anyway, given their history.
 
AKA said:
IThe agent is also saying the directors are refusing to release details such as state of finances of the account details.
Click to expand...

In such circumstances you should contact the Companies Registration Office www.cro.ie For a small fee, you can access copies of the most recently lodged accounts of the company. I'm not 100% sure what the position is with 6 monthly accounts, but I think these also have to be lodged with the CRO. Assuming the financial year is Jan-Dec, those accounts should be lodged already or due to be lodged shortly with the CRO.
 
Between dealing with builders due to reacuring dampness, private serveyers, full time job, comute, small child, management company issues... I really wonder will I be able to cope for long! I know it's not real problems on scale of things, but it takes so much energy off me! (and my family).

I love the 'hood'. The neighboors are great. Full with kids my son's age. Near to town and all sorts of things (shops, schools, bus lane, dart not too far!)

I have no plans to sell or move anytime soon! So I suppouse I will have to find time, and energy and start work more with the resident comitee (which have done allot!) and see if I can be any help.

Thanks for all responses.
 

The problem arises when you want to get an up to date status of the management company in relation to debt and debt collection by the agent. Waiting until the years accounts are filed won't suffice.
 
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