FAQs
- What is a management company?
- Who controls the management company?
- What's the difference between a management company and a managing agent?
- What are service charges? How are they calculated?
- Am I legally obliged to pay service charges?
- I am unhappy with the service being provided by the managing agent. What do I do?
- The management company say that I cannot keep a dog in my apartment. Can they do this?
- I am renting an apartment in a development. Do I have to pay service charges?
- If I rent an apartment, do I have any input into the management company's activities?
- How can I switch cable TV provider if the current one has an exclusive contract with the management company?
- Are satellite dishes banned by planning regulations?
Q1. What is a management company?
A management company is a company established to own and look after the common areas of a development.
Management companies are responsible for the maintenance of communal areas and shared services within multi-unit developments, such as apartment blocks or housing estates.
For example, the company may be responsible for the maintenance of halls, corridors, lifts, public lighting, footpaths, gardens and waste services.
In many apartment developments, this company is also the legal owner of the leasehold of individual units and common areas of the development.
Home buyers are advised to engage a solicitor to guide them through all the legal paperwork in relation to management companies before finalising the sale.
Q2. Who controls the management company?
It is initially likely to be controlled by the builder or developer who set it up in the first place, often before any units have been sold. They usually nominate the first directors and members of the company. Generally, the developer or some of their staff, associates or solicitor may fill these roles.
Then each buyer becomes a member of the management company (on completion of their purchase transaction and receipt of certificate of membership).
But at this stage the developer may still retain control the management company if he/she still has the largest shareholding.
The memorandum and articles of association will set out the rules and procedures about the appointment of directors to the company and will also set out what rights individual members will have in relation to how the company is run.
In general, after the developer sells and transfers ownership of the common areas, the developer’s nominees as directors will generally resign from their roles as directors.
The management company should advise unit owners of this step at least eight weeks in advance.
Where a director nominated by the developer wishes to stay on the board, this should be agreed by vote at the meeting of the company.
At this stage members of the management company should volunteer to fill the role of directors. This should generally be done at an AGM of the company.
Q3. What's the difference between a management company and a managing agent?
The management company is legally obliged to oversee maintenance work and the management of common area services in multi-unit developments.
Many developers and management companies employ professional firms known as managing agents to provide maintenance and other services. The managing agent and the management company are two very different entities. The managing agent works under the instructions of the management company.
Generally the developer will appoint a managing agent at the outset of a development, often before the first unit is sold. The developer should:
- Inform buyers that a managing agent has been appointed
- Outline the services to be provided
- Explain the managing agent’s procedures for dealing with requests/complaints from owners
Q4. What are service charges? How are they calculated?
Service charges are the annual fees that property owners pay for services provided by their housing or apartment development's management company.
These pay for the upkeep of common areas, such as repairs and running costs (e.g. electricity, lifts) for these areas, and may cover other services such as refuse collection or landscaping.
Most management companies use an "apportionment" method to decide the individual service charge.
This method factors in the size and type of unit in calculating what percentage of the overall service charge bill is owed by each home owner.
Q5. Am I legally obliged to pay service charges?
Service charges are not an optional payment if they are part of the terms and conditions of your contract to buy the unit.
Once you conclude the contract, you have an ongoing legal obligation to pay these charges, usually on an annual basis. So make sure your solicitor explains these obligations.
So not paying may leave you open to legal action, and any outstanding debts can be tied to your property. For example, unpaid service charges can be deducted from the money you receive if you subsequently sell your property.
Q6. I am unhappy with the service being provided by the managing agent. What do I do?
The contract between the agent and the management company should specify the procedure for dealing with owners’ complaints.
If you are dissatisfied with the managing agent’s performance, raise the issue with your management company rather than with the agent.
Withholding your service charge as a protest is not advised – this is a breach of your contractual obligation under the terms of your lease.
If you are a tenant, ask your landlord to forward your complaint to the management company.
Q7. The management company say that I cannot keep a dog in my apartment. Can they do this?
Most property management companies draw up a set of "house rules". These set out basic standards for communal living.
House rules typically cover noise levels, and other issues such as whether owners and tenants can keep pets, hang laundry from balconies and common spaces etc.
The management company has ultimate responsibility for setting and enforcing the house rules. Procedures for dealing with complaints in relation to the house rules should be clearly outlined and communicated to all owners and residents by the company directors.
Depending on the lease and the company's articles of association, the house rules may be changed by a vote of members at the company's AGM.
In extreme cases, owners and tenants may seek legal assistance to resolve disputes about house rules. But good communication and co-operation between owners, tenants and the management company should ensure that disputes are speedily resolved without recourse to the law.
Q8. I am renting an apartment in a development. Do I have to pay service charges?
Tenants are not obliged to pay service charges directly to the management company – the charges are applied to the owner of your apartment. But landlords and buy-to-let investors may factor in service charges when setting your rent.
Q9. If I rent an apartment, do I have any input into the management company's activities?
Not directly, as tenants have no legal rights in terms of membership of management companies.
But a tenant in an apartment block or housing estate may decide to join a residents’ committee, which in turn lobbies the developer and/or management committee on issues of common concern to both home owners and tenants in the development.
Q10. I want to switch my cable TV provider but the current one has an exclusive contract with the management company for several years. Is this legal?
The Competition Authority has received numerous complaints on this and related issues. Read more about its guide for consumers.
Q11. Is there a planning ban on satellite dishes in apartment developments?
Again, this issue is covered by the Competition Authority's guide for consumers. Read more about the guide.