FAQ - Property Management
What is a Management Company?
On purchase of a unit in a privately managed development you become a member of a Property Management Company. This brings rights and responsibilities that all owners need to understand. A Property Management Company is made up of all owners in a development. It is legally responsible for maintaining the standard of the development. An effective Property Management Company will secure the long term future of the complex by providing for its future needs.
How is the Management Company setup?
The Management Company is a company set up by the developer at the commencement of the estate which is responsible for the maintenance and management of the structure and common areas of the complex, as defined and shown on the plans/site maps in your title documents (i.e. your lease)
How long will the developer be involved with the Management Company?
At present there is no time limit on when the development is handed over to residents. Even after the complex is completed, the developer need not give up control. In addition to keeping control of the Management Company the title to the land surrounding the development is often still in the hands of the developer. The developer may choose to keep the title to these lands because they hope to get planning permission for more units. When a developer wants to hand over the development an AGM is called where each owner is given 21 days notice and the builder resigns as a Director of the Management Company. Owners are then invited to put themselves forward as the new Directors of the Management Company.
What are the duties fo the management Company?
The main duty of the Management Company is to maintain the development. It must decide on an annual budget to pay for the cost of this maintenance. The budget is met by a service charge paid by all members. The Management Company must decide what services it will provide, for example cleaning or employing a Management Agent. The Management Company will use the money it gets from members to budget for things like:
Ongoing maintenance, i.e. cleaning, landscaping
A sinking fund for long term or unforeseen expenses
What is the need for a Management Company?
The need for a Management Company structure arose in order to ‘manage' all of the common parts and services within a complex, not belonging to, or the responsibility of a single person. In the case of multi unit developments such complexes will contain internal and external common areas which are accessible to everyone who occupies the building. Typically these would include the lobbies, halls, stairwells, lift, corridors and the roof. The owners share collectively the common areas and will have certain rights and duties in regard to them.
Are Management Companies Regulated?
No, Property Management Companies are not regulated. However, the Government plans to introduce a law to set up a national property services regulatory authority.
As a member of a Management Company, what will I have to do?
When you buy a property you become a member of the Management Company. Each member of the Management Company must pay their service charge fee every year. This will be used to maintain the common areas of the development.
What is a Service Charge Fee?
Every property in a managed complex carries a service charge which must be paid to the management Company. The service charge represents the sum of money which the company will need to collect from all owners on a regular basis to pay for the expenditure incurred by the Management Company in carrying out its obligations. Where there is a Management Agent appointed it will be their responsibility to collect these fees from all owners.
What is covered in my Service Charge Fee?
The service charge is used to pay for all expenses related to the development such as: Insurance, electricity, cleaning, garden and ground maintenance, lift maintenance, bank charges, waste removal services etc.
Should owners focus on getting the lowest possible service charge?
It is important to make sure owners get value for money and that all service charges are properly spent. But it is also vital to make sure that enough money is collected to pay for the long term maintenance and improvement of the development.
What happens if I don't pay my service charge fees?
As per the lease agreement each owner is obliged to pay an annual service charge fee towards the maintenance on the common areas. Interest may be charged to an owners service charge account (again this is as per the lease agreement) and the owners account may be sent to the management Company's solicitor with instructions to sue for breach of contract.
What is a Management Agent?
The Management Agent is simply the servants of the Management Company who are hired by the Management Company to ensure that the company honours its obligations to the individual owners, and that the individual owners, in turn, honour their obligations to the company and to each other.
What is the difference between a Management Company and a Managenment Agent?
The Management Company will usually employ a management Agent to help run the complex. The Management Agent will be expected to do just some of the following:
Keep the accounts
Sort out problems relating to the common areas
Send out service charge fees to all owners
Make sure that all bills relating to the development are paid
How should the Management agent deal with the day to day issues affecting the owners?
The Board of the Management Company should decide how the agent responds to problems from individual residents relating to the common areas of the development. The Board should tell the residents:
Who the Agent is
What their duties are
The limits of the agents authority
Although the agent works for the residents as a whole, the board employs them. Residents must be clear that the agent has the authority and support of the board to carry out their role.
What Qualifications must the Managment Agent have?
There are no specific qualifications for property management agents, but this may change after the national property services regulatory authority is set up.
How do I check the accounts of my Management Company?
Before the AGM each year, each owner must see a copy of the Management Company's accounts for the previous year. An independent auditor must verify these accounts. The accounts show how the money was spent during the year and how much is left over in the sinking fund. The law requires that at the AGM the members vote to ratify the accounts.