Quiz (text version)
Question 1: What is a management company?
a) A company run on behalf of owners to look after the common areas of a development
b) The estate agents selling the development
c) A private company created by the local authority to manage the development
Right answer: A
A management company established to own and look after the common areas of a development. In general the developer establishes the management company at the outset, and owners become members when they buy a property.
Question 2: Who is responsible for completing a property development?
a) The property management company
b) The developer
c) The local authority
Right answer: B
The developer must complete the development in accordance with planning permission and the building regulations. The property management company should have no involvement in any construction related work.
Question 3: You want to insure your personal property. Who is responsible for organising this?
a) The management company
b) The developer
c) You are
Right answer: C
You are responsible for insuring your own personal property.
The management company is responsible for insuring the common areas only.
Question 4: Who decides the service charge?
a) The managing agent
b) The residents' association
c) The directors of the management company
Right answer: C
The directors of the management company decide the service charge.
Members of the management company may have an input into this process but directors make the final decision.
Question 5: You think the service charge is too high. Do you have to pay?
a) Yes, because you've signed the contract and the services were provided
b) No, because it's too high
c) No, there is never an obligation to pay
Right answer: A
The obligation to pay service charges is set out in your contract to buy your property.
If you refuse to pay the service charges, you may be in breach of your contractual obligation.
Question 6: What services do managing agents carry out?
a) Maintenance and repair work inside my home, such as painting, plumbing etc
b) Providing financial compensation if things are stolen from or damaged inside your home
c) The list of duties and services as decided by the property management company
Right answer: C
The main aim of a property management company is to look after common internal and external areas in a development, and shared services and infrastructure such as lifts. Management companies usually employ a managing agent to do this. The specific list of duties and services that the managing agent will do is decided by the management company's directors.
Question 7: Who is responsible for maintaining the fire safety of common areas in an established development?
a) The local authority
b) The management company
c) The residents
Right answer: B
Responsibility for fire safety will depend on who owns the common areas. Generally speaking, in an established development this will be the management company. The Fire Services Act places a duty on persons in control of buildings which contain apartments to take all reasonable measures to prevent the occurrence of fires.
Question 8: What is a sinking fund?
a) A pool of money to cope with flooding and other natural disasters
b) Money put aside each year from the service charges budget to cover the cost of major long-term expenses
c) A fund for protecting properties from sinking into the ground
Right answer: B
A sinking fund is money put aside each year from the service charges budget to cover the cost of major long-term expenses (such as one-off or potentially expensive repairs, e.g. replacement of a lift or windows).
Question 9: When is control of the management company transferred to the owners?
a) On the day the final unit is sold
b) When the development is complete
c) It differs from development to development
Right answer: C
Transfer of control of the management company to the owners differs from development to development. It may be dependent on the completion of the development and/or the sale of the final unit or both. Your solicitor should explain when this will happen.
Question 10: What are the directors of a management company responsible for?
a) Ensuring that your apartment is kept tidy
b) Ensuring owners can vote in general elections
c) Managing the development and making decisions on behalf of all members
Right answer: C
The directors of a management company are responsible for managing the development and making decisions on behalf of all members. The key tasks directors perform are deciding service provision and the service charge level. The directors should also ensure that the company complies with relevant company law.