Buying And Living in a Multi-Unit Development Property in Ireland
6. Managing Agents
6.1 Introduction
As the task of maintaining the common areas can be time consuming and specialised, many management companies employ professional firms known as managing agents to administer the maintenance of the common areas on their behalf.
Managing agents and management companies are two very different entities and should not be confused.
The management company employs the managing agent firm and ultimately the agent is accountable to the management company for its actions.
The information set out in this section is an overview of some of the functions of managing agents and the services they provide.
6.2 Managing agent services
At present, there are no specific qualifications or licenses required to operate as a managing agent, but this is likely to change after the National Property Services Regulatory Authority (NPSRA) is established on a statutory basis.
The range of services provided by managing agents varies from firm to firm and it is not possible to have a complete and exhaustive list.
Some of the most common services that agents provide to management companies are:
- Maintaining the common areas (e.g. cleaning, refuse collection etc) often by engaging subcontracted tradespersons to carry out this work;
- Carrying out inspections and organising internal and external common area repairs;
- Procuring suitably qualified professionals such as surveyors to estimate the sinking fund;
- Collecting service charges from owners;
- Advising the directors on appropriate levels for service charges, the setting the annual budget and administration of the management company's accounts;
- Arranging insurance cover for the common areas;
- Paying accounts (for example, electricity charges, waste disposal);
- Arranging and undertaking administrative duties in relation to annual general meetings and returns to the Companies Registration Office;
- Maintaining management company records (for example, the members' register, minutes of meetings);
- Arranging mechanical and electrical services and repairs;
- Responding to reactive repairs and emergency services;
- Organising and attending management company meetings;
- Issuing information and advice and responding to enquiries from owners;
- Organising the management company's finances e.g. accounting and maintaining bank accounts.
Additional services to the above may be provided depending on the services offered by the agent or the management company's requirements.
Management companies should consider the type of services which are absolutely essential in the first instance before considering extra services.
While it is important to make sure that the management company gets a quality service and value for money from the agent, it is also vital to make sure that the entire annual budget is not spent on the day-to-day services provided to maintain the common areas and that monies are put aside in a sinking fund.
6.3 First appointment of the managing agent
In new developments, the developer generally establishes the management company at the outset, often before the first unit is sold (see section 7.5).
It is likely in such cases that the developer or their nominees as directors of the management company will appoint the initial managing agent.
The developer should refrain from committing the company to long-term agreements with any agent pending formal transfer of control of the management company to the owners.
When the agent is first appointed, the developer should arrange for purchasers to be informed.
Owners should be informed of the specific duties to be provided by the agent, how they may be contacted and how requests/complaints from owners are to be handled.
As part of the contract, the agent should agree to meet at least quarterly with the members of the management company or any residents committee.
Such a committee may be formed by owners to represent and articulate their interests pending the transfer of control of the management company from the developer to the owners.
To facilitate the agents in their work, on establishment of the management company or as soon as is practicable thereafter, the developer should provide the agent with:
- The title documents and counter part leases;
- Agreed snag list and practical completion certification;
- As built drawings;
- A register of all capital assets;
- Warranties and other guarantees, including test records for drainage, water and heating pipe work;
- Certifications for Fire Safety, Health and Safety, Planning and Building Regulations.
6.4 How are managing agent services paid for?
Employing a managing agent will require the management company to pay the agent a fee.
This should be paid out of the management company's annual service charges budget. The agent's fee should be clearly identified as such in the company's financial records.
6.5 How much should a managing agent cost?
The cost of employing a managing agent will depend on the firm and the services the management company requires. There is no set fee.
To help ensure value for money, management companies should employ agents based on a competitive and transparent tendering process.
It is advisable that the management company get a number of quotes to ensure the most suitable agent has been selected both in terms of value for money and quality of service provided (see section 6.9).