a guide to management companies
DESCRIPTION
A Guide to Management CompaniesTRANSCRIPT
Q. What is a sinking fund?A. A sinking fund is money that is put aside every year from the service charges budget to cover the cost of major long-term expenses.While the service charges budget is generally used to fund the costs of the day-to-day maintenance of the common areas, a portion of the budget must also be set aside to cater for non-recurring works. (E.g.) lift replacement, road resurfacing, windows, roofs etc. Under the MUD Act it is mandatory for all Management Companies to put in place a sinking fund. Contributions to the sinking fund must be held in a separate bank account.
Q. What to do if I have a complaint about a Management Agent?A. If you are dissatisfied with the performance of your management agent you should always raise the issue with the management company (i.e.) Directors.
Q. How do I find out who are the Directors of my Management Company?A. Directors are elected by the shareholders (i.e.) residents at each AGM. If you are unsure who the Directors are you can obtain a list of Directors from the Company Registration Office. The directors are also listed on the annual report that is sent to all property owners.
Q. Why are AGMs important?A. The purpose of an AGM is to review the company’s performance and plans for the future. At the AGM some members may agree to serve on the Board of Directors of the company.Whether or not you are on the Board of Directors, once you buy a property and become a member of the management company you have an interest in how the company is run. Key decisions in relation to how the management company is being run may be taken at the AGM and it is important that you attend and have your say.
Q. When do AGMs take place?A. Members of Management Companies must be given 21 days notice of an AGM. The notice should specify the place, date and time of the meeting. The notice should also contain a clear outline of the matters to be dealt with at the meeting.The AGM must be presided over by a chairperson. The chairperson is usually one of the directors and minutes must be taken. Third parties such as the managing agent, company solicitor and auditor may also attend the meeting if invited by the directors.
Q. What are EGMS?A. EGMS are all general meetings of the Management Company other than the AGM. These meetings can generally be convened at short notice to discuss specific issues that may arise.
Q. Is my property insured?A. In developments that have a mix of houses, duplexes and apartments the Management Company may be responsible for insuring all the buildings. However it is also possible that the owners of houses may be responsible for arranging their own building insurance cover.In the event that the Management Company pays the insurance premium (normally in the event of apartments and duplexes) the cost of this is included in the annual budget and ultimately paid for through the service charges. The Management Company own the building structure so it is therefore not possible to obtain your own building insurance.
BrIAn HAyES TD MInISTEr of STATE
Dail Eireann, Leinster House, Kildare Street, Dublin [email protected]: Brian Hayes TD
your fInE GAEl TEAM In DuBlIn SouTH WESTAn InforMATIon lEAflET for oWnErS of propErTIES In MAnAGED DEvElopMEnTS
A Guide to Management Companies
BrIAn HAyES TDDublin South West
An InforMATIon lEAflET for oWnErS of propErTIES In MAnAGED DEvElopMEnTS
0612
Senator Cait Keane Tel: 01 6183179
Email: [email protected]
TallaghT CenTral:Cllr Colm Brophy
Tel: 086 250 9223Email: [email protected]
TallaghT SouTh:Cllr Brian lawlor
Tel: 087 6445472Email: [email protected]
raThfarnham:Cllr emma Coburn
Tel: 087 0628484Email:
Cllr anne-marie DermodyTel: 087 3072030
Email: [email protected]
Dear Resident,
Every week I receive many queries in relation to developments controlled by Management Companies. In effect these developments are privately run and not the responsibility of the local council. As a result, all services throughout the development such as drains, roads, footpaths etc are the responsibility of the management company. There are some cases where the local council may be responsible for some areas. (EG) Drains
The primary piece of legislation governing Management Companies is the Multi-Unit Development Act 2011 (MUD). The aim of this Act is to change the law on the ownership and management of common areas of developments and to facilitate the proper management of bodies that are responsible for the management of these common areas. The Act also contains detailed provisions concerning the management and operation of management companies.
The aim of this guide is to act as a reference to property owners who live in a development controlled by a Management Company. I hope it answers a number of questions you may have. If you require further clarity or have any other questions please do not hesitate to contact me on 01-6183567 or email [email protected]
Kind Regards
Brian Hayes TDMinister of State
Disclaimer: This guide is presented for information purposes only and does not constitute legal advice. Every effort has been made to ensure that the information provided is accurate.
Q. What is a Management Company?A. A company established to be the legal owner of a development. It has responsibility to manage and maintain the common areas within an apartment block or housing estate. When you purchase a property in such a development you automatically become a member of the company.The management company is responsible for areas such as the maintenance of halls, corridors, lifts, public lighting, footpaths, gardens and refuse collection.
Q. What is a Management Agent?A. It is common that Management Companies hire a separate company to carry out the above services. These companies are known as Management Agents. They have responsibility to oversee maintenance and administer duties such as insurance throughout the development. These companies usually receive a set monthly payment by Management Companies for carrying out this service.
Q. What are common areas?A. The law defines common areas as those areas generally accessible or used by all residents in the development. These include: - External walls - Foundations - Lifts, - Halls, - Staircases, - Roads, - Carparks - Gardens.
Q. Why pay service charges?A. Service Charges are paid in order to ensure the development is maintained. When a property is purchased in a managed development a legal contract is signed committing the property owner to contribute to the Management Company. This money is then used to pay for items such electricity in common areas, refuse collections, maintenance works, landscaping etc.Service Charges should be paid directly to the Management Company and not to the Management Agent. Management Agents will only operate with whatever money is paid into the Management Company. In the event that property owners do not pay their service charges, services could be curtailed or cancelled such as grass cutting, lighting, and cleaning.
Q. Who decides how much service charges are?A. It is up to the Directors of the Management Company to decide the service charge (Budget). The budget outlines how much each service will cost for the year (EG) cost of refuse collection, maintenance, electricity, landscaping. Management Agents will generally draw up the budget but the Directors of the Management Company must agree it.Under the MUD Act members of a management company must approve the budget each year. This takes place at a General Meeting convened. If over 75% of the members do not approve the proposed change, the existing charge must remain in place. The service charge must be calculated on a transparent and fair basis and expenditure must be properly recorded.
Q. Do all properties in a development pay the same amount in service charges?A. No. The process by which fees are calculated for individual units is outlined in the Memorandum and Articles of Association. example 1: A development consisting of apartments and houses would often have different fees due to the fact that a house may pay and dispose of its own refuse, whereas an apartment most likely has a communal facility that they pay for via their service charges. Apartments also have more common areas to maintain such as corridors, lifts etc. example 2: A development of apartments may have its fees calculated on size of each unit (i.e.) floor space or number of bedrooms.
Q. What are Memorandum and Articles of Association?A. These are the governing documents of the Management Company. These must be filed with the Companies’ Office. These documents are important as they set out how the company is operated and controlled. These documents also clarify what rights you have as a member of the Management Company.
InforMATIon for oWnErS of propErTIES In MAnAGED DEvElopMEnTSA MESSAGE froM BrIAn HAyES TD