1. What is an Owners' Management Company?

2. Who controls the Owners' Management Company?

3. Why is an Owners' Management Company formed and what is its role?

4. What's the difference between an Owners' Management Company and a Managing Agent?

5. What is the role of the Managing Agent?

6. What are Service Charges?

7. What do the Service Charges consist of?

8. How are Service Charges calculated?

9. Why does the amount of Service Charge change every year?

10. What is a Sinking Fund and what is it used for?

11. How can I pay my Service Charges?

12. Who decides on what the Service Charges will be annually?

13. Am I legally obliged to pay Service Charges?

14. What happens if I don't pay my Service Charges?

15. Am I entitled to tax relief on Service Charges?

16. I am unhappy with the service being provided by the Managing Agent. What do I do?

17. The Owners' Management Company says that I cannot keep a dog in my apartment. Can they do this?

18. I am renting a unit in a development. Do I have to pay Service Charges?

19. If I rent a unit, do I have any input into the Owners' Management Company's activities?

20. Is there a planning ban on satellite dishes in apartment developments?

1. What is an Owners' Management Company?
An Owners' Management Company is a company established to own and look after the common areas of a development. Owners' 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.

2. Who controls the Owners' Management Company?
Each buyer becomes a member of the Owners' Management Company (OMC) on completion of their purchase transaction and receipt of certificate of membership. Each unit is assigned one vote of equal value. This is a legal right and the vote is used when the OMC is making important decisions in relation to the running of the development.

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.

3. Why is an Owners' Management Company formed and what is its role?
• To manage and maintain the common areas
• To be the legal owner of the common areas

4. What's the difference between an Owners' Management Company and a Managing Agent?
The Owners' Management Company (OMC) is legally obliged to oversee maintenance work and the management of common area services in multi-unit developments. OMC's employ professional firms known as managing agents to provide maintenance and other services. The managing agent and the OMC are two very different entities. The managing agent works under the instructions of the OMC.

5. What is the role of the Managing Agent?
The managing agent works under the instructions of the Owners' Management Company. Managing agents' services typically include:
• Inspecting and maintaining common areas
• Organising refuse collections
• Collecting service charges from owners
• Administrative duties such as arranging insurance cover
• Organising meetings between the management company, owners and residents
• Providing information and advice and responding to enquiries from owners

6. What are Service Charges?
Unit owners pay an annual fee known as a service charge to pay for the maintenance of these common areas and other shared services such as cleaning and waste disposal. The Owners' Management Company (OMC) sets the service charge. It is up to the OMC to establish how services are provided.

7. What do the Service Charges consist of?
Service charges are the annual fees that property owners pay for services provided by their Owners' Management Company. These pay for the upkeep of common areas, such as repairs and running costs (e.g. electricity, lifts) for these areas.

The following are typical items that a service charge may pay for, though the range of services will depend on your individual development:
• Repair and maintenance of common areas, car park, footpaths, roads
• Cleaning common areas, windows, carpets/mats, gutters and drains
• Lift repairs and inspections
• Electricity and lighting for common areas
• Landscape and gardening,
• Pest control
• Security - internal locks and doors, intercoms, external doors and gates
• Safety - smoke alarms, fire extinguishers, health and safety inspections
• Refuse collection and recycling
• Professional charges (e.g. block insurance, public liability insurance, management company's legal/auditor fees)
NB: The service charge should not include costs relating to the original design, construction and snagging of the development.

8. How are Service Charges calculated?
Most Owners' 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.

9. Why does the amount of Service Charge change every year?
The overall level of service charges is not a set amount. It varies from development to development, and depends on the type of services the Owners' Management Company decides to undertake. It should be set at a sufficient level to finance necessary services and maintenance for your development. Factors that may affect these running costs include:
• If common areas are designed to a very high standard
• If they have elaborate features (e.g. ponds, fountains)
• The number of lifts
• Electronic gates
• The size of the grounds and landscaped areas
• Whether 24-hour concierge/security services are provided

The initial annual charge is likely to be provided in your purchase contract, but the service charge for subsequent years won't be. Your solicitor should look for an estimate of charges for future years, and any copies of the schedule of costs used to draw up the annual service charge budget. This budget may change from year to year, so your own payment may vary accordingly. In general, future charges should be based on normal wear and tear, inflation and new or additional services, and average inflation costs.

10. What is a Sinking Fund and what is it used for?
A Sinking fund provision is funds that are put aside each year to cover major but longer term expenses (A Rainy Day Fund). Possible items which would be paid for from the sinking fund include:
• External walls - External brickwork common areas
• Internal walls - Stud partitions (common areas apartments)
• Dividing screens – terrace/balcony
• Screen to bin stores
• External entrance doors apartments
• External windows common areas apartments
• Apartment Stairs, Balustrades & Handrails
• Paint Internal Walls; apartment common areas
• Paint External Walls of apartments
• Floor tiling common areas of apartments
• Carpet to Common areas of apartments
• Gutters / downpipes of apartments
• Roof coverings
• Paint to membrane surfaces
• Flashings, Eaves and verges
• Water main distribution / tank and pumps
• Lifts – replacement/major repair
• Post boxes – paint/replacement
• Dividing walls to terraces
• External boundary walls
• Railings
• Gates
• Painting to external metal work railing
• External steps
• Vents to car parking – e.g. underground
• Roads, paths and pavings – e.g. Tarmac areas, Line marking, External paving, Kerbs
• Lighting to external areas
• Motorized door equipment
• Drainage systems, pumps etc.
• Site fittings – External seating, Bicycle racks
• Bin Sheds/Bicycle Sheds
• Car Parks

11. How can I pay my Service Charges?
Cheque, bank draft, postal order, cash or online via our secure payment section on our website.

12. Who decides on what the Service Charges will be annually?
The Owners' Management Company (OMC) directors draw up a provisional service charge. The charge drawn up by the directors must be voted on and passed by the members/shareholders of the OMC. A service charge bill should be delivered to each individual unit. In general you should be invoiced in writing on an annual basis by the management company (or by a managing agent on its behalf). The invoice should be received before the year start and show a payment due date (e.g. 30 days).

13. 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.

14. What happens if I don't pay my Services Charges?
If owners do not pay the charges, your Owners' Management Company will also run short of money and in time it may not be able to provide even basic services. This in turn may have a negative impact on the residents' quality of life and the value of property in the development.

15. Am I entitled to tax relief on Service Charges?
You may be entitled to tax relief at the standard rate on some service charges if you have paid them in full and on time in the previous calendar year. Service charges paid to local authorities for the following domestic services qualify for income tax relief:
• The provision of water supply, refuse collection or disposal, or sewage disposal
• Group water schemes for water supply

Service charges paid to independent contractors for domestic refuse collection or disposal also qualify. You should contact your local tax office for further details.

16. I am unhappy with the service being provided by the Managing Agent. What do I do?
The contract between the managing agent and the Owners' Management Company (OMC) should specify the procedure for dealing with owners' complaints. If you are dissatisfied with the managing agent's performance, raise the issue with your OMC 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 OMC.

17. The Owners' Management Company says that I cannot keep a dog in my apartment. Can they do this?
Most property Owners' Management Companies (OMC) 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 OMC 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 OMC should ensure that disputes are speedily resolved without recourse to the law.

18. I am renting a unit in a development. Do I have to pay Service Charges?
Tenants are not obliged to pay service charges directly to the Owners' 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.

19. If I rent a unit, do I have any input into the Owners' Management Company's activities?
Not directly, as tenants have no legal rights in terms of membership of the Owners' Management Company (OMC). But a tenant in an apartment block or housing estate may decide to join a residents' committee, which in turn lobbies the OMC on issues of common concern to both home owners and tenants in the development.

20. Is there a planning ban on satellite dishes in apartment developments?
Regarding satellite dishes, the Competition Authority says residents should familiarise themselves with the precise restrictions, and the source of the restrictions, in their apartment development. Generally speaking, external walls of apartments are not owned by residents. On the question of planning restrictions, it says: "While there may be aesthetic grounds for preventing a proliferation of satellite dishes on apartment balconies, residents should be aware that Planning Guidelines facilitate, and indeed encourage, the erection of communal satellite dishes in apartment developments." However if this is covered under House Rules then you are bound by the terms and conditions of which you signed up to at the time of purchase.

 

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