Irish Times Property Clinic 23rd day of April 2015.

 

 

Publishing Date; Thursday the 23rd day of April 2015.

 

Q I own a ground floor apartment in a small town in Co Mayo. I have lived here for nearly nine years and have paid the service charge every year. The fee has reduced in the last few years but it is still an expense that I have to budget for.

What is on my mind at the moment is that I know a lot of my neighbours have not paid their fees in the last few years. Also, I don’t know what I am paying for. . . I get an invoice at the end of the year with just the fee that has to be paid.

When I contacted them last year about why the charge had increased, I was told the insurance had gone up. I don’t know how to go about dealing with this, and what information I am entitled to as a home owner.

 

A  Your neighbours are contractually obliged to pay their service charges in the same way you are by way of their binding lease agreement that they entered into with the owners’ management company (OMC) when they purchased their property. Provided the common areas are transferred, that is to say the freehold or reversionary interest is passed from the development company to the property owners, the beneficial and legal interests stand merged.

 

In the event that a member of your OMC is in arrears of payment Section 22 of the Multi-Unit Developments Act 2011(MUDs Act 2011) provides that subject to service charges levied in accordance with either Sections 18, 19 or 20, the due service charge or debt may be recoverable as a simple contract debt in court. Recovery of service charge debt in court is onerous and expensive.

 

You say you do not know what you are paying for. The OMC is required to levy charges in accordance with the MUDs Act 2011 and, should it have failed to do so, one could argue that the charge is not recoverable in court however morally vacuous such a stance would be. The proposed budget for the coming financial year should be sent to each member in advance of the OMC general meeting in the prescribed format as stated in Section 18 Sub Section 3 of the MUDs Act 2011.

 

Section 17 Sub Section 2 (G) of the MUDs Act 2011 pertains to insurance particulars, which must be provided to each member at the end of each year as stated in the year-end report. Specifically; “a statement of the insured value of the multi-unit development, the amount of the premium charged, the name of the insurance company with which the policy of insurance is held and a summary of the principal risks covered”. You could then benchmark each year’s data to identify changes in premiums and sums insured.

I would strongly recommend that you seek the counsel of a property service provider holding a category D licence as issued by the Property Services Regulatory Authority.

 

 

Paul Huberman is a member of the Society of Chartered Surveyors Ireland (SCSI) Properties and Facilities Management Professional Group

 

 

Author: Paul Huberman of H&H Property Management Consultants Ltd

Publish Date: 23/04/2015