Property Clinic

Q I have a duplex apartment in a development of 12 units. There are no gardens or lifts. My management fees are now €1,800 a year. This is due to the fact that only three out of 12 units pay their fees and the management company has raised the cost per unit for the three units paying fees. I feel this is grossly unfair. Is there anything I can do about this?

A The Multi-Unit Developments Act 2011 requires each owners’ management company to call a meeting of owners to consider an estimate of expenditure for the coming period before any service charge is levied on its member owners. Each owner should receive 14 or 21 days’ notice of the meeting and be made aware that one of the purposes of the meeting is to consider the service charge to be levied. This gives each owner the opportunity to attend the meeting and discuss the expected expenditure for the coming year and the level of service charge.

You describe a situation where 75 per cent of the owners are not paying service charges which is driving the cost to the paying owners upward. This position is unsustainable for the management company and it is unfair to the paying owners. Paying the increase in service charges presumably keeps essential services in place, in particular structural insurance, and this is the correct and prudent course of action in the short-term by the paying owners. Looking beyond this, you must explore your options and what actions have been taken to recover service charges from those owners who are not paying.

In the first instance, one should explore if there is any particular reason that these units are not paying other than non-participation. Attempts should be made to engage with them to see why they are not paying and explain the inequity and unreasonableness of their actions. In addition to this, full statements of service-charge arrears should be prepared, lease documentation and meeting notices and minutes should be gathered to assess that the charges have been properly levied, ascertaining the correct balance due and ensuring a strong case for recovery through the relevant court. Should the engagement with the non-participating owners come to nothing, the owners’ management company should pass the matter to their solicitor for immediate action.

As owners’ management companies are limited companies they are required to have a minimum of two directors. Presumably the other two paying owners are directors of the management company and they had to take the tough decision to recommend that service charges be increased to take account of the 75 per cent of owners defaulting within your estate.

In my opinion, the correct decision has been made in the short term to protect the property assets of the owners and the long-term solution lies in more owners becoming active in the owners’ management company in order to change the attitude of the remaining owners. Once this has been achieved, future service charges can be determined by the building’s and occupiers’ requirements rather than the unreasonable and inequitable withholding of service charges by your co-owners.

Paul Mooney is a member of the property and facilities management professional group of the Society of Chartered Surveyors Ireland

Q I have just received planning for an 1,800sq ft four-bedroom house on a site. I am wondering if I should employ a builder to project-manage the build and various contractors or if I should do it myself? What are the main issues to consider?

ALet’s look firstly at the DIY option. Unless you come from a construction background and have significant experience, I would caution against managing a building project yourself. The management of a significant project like a large house can often prove difficult and is always time-consuming and stressful, even for experienced professionals.

However, if you have the appropriate experience and expertise, there are several factors you need to consider if you wish to project-manage it yourself.

An overall budget needs to be determined, together with a breakdown of the various cost elements. The budget should include build costs, utility costs, fees, charges and levies. It should also include a contingency sum. The input of a quantity surveyor will be useful with regard to estimating the required budget.

You should endeavour to ensure that any over-runs are compensated for, where possible, with savings while also calculating how much your involvement will save in terms of the budget.

You also need to confirm that your financial institution will support your role and provide the funding if you are managing the project yourself.

Work out what amount of time you will need to direct, instruct, and manage the various workmen, electricians, plumbers, heating contractors etc. You may well be required to be on site every day, including nights and weekends. Other factors to consider include:

Where you will buy your materials and what kind of discounts you will achieve (builders always get a discount on materials used, and this is sometimes passed on to the customer).

How you will gauge quality of workmanship, compliance with building regulations, codes of practice for installations of pipework, heating, electrical etc.

Your ability to source suitable, experienced, registered contractors and subcontractors – do you have a list of people / companies to refer to?

The extent to which you will require technical input on a regular basis to assist you in decision-making. You may require the services of an architect/building surveyor, engineer or quantity surveyor at various stages during the build.

Certification of the completed build. An architect/building surveyor will be required to provide a Certificate of Compliance. This document confirms that the build has been completed in accordance with the planning permission and the building regulations and is necessary should you wish to dispose of the property in the future.

Insurance for the works.

However, if you employ a builder to project manage the build on your behalf you should bear in mind the following considerations.

First, make sure you have the project finance in place from the financial institution to avoid any unnecessary payment delays which could hold up the project.

Secondly, a key consideration is to only employ a registered individual with a proven track record in project-managing similar developments. You need to do some research here and this could save you time, money and heartache in the long run. You need to check all references, look at other projects the builder has completed and talk to his previous clients.

Make sure that you have insurance in place for the work.

Once you select a builder as project manager, the next step is to define the scope of the works and specify exactly what your requirements are. Agree on a fee and sign a contract to avoid any ambiguity over what he is expected to do.

You should also insist that the builder only uses registered contractors and subcontractors and it would be a good idea to review the list of who he intends using. Other factors to consider include:

Whether you require that he employs an architect/building surveyor to periodically review the quality of the work and to advise on technical issues.

Whether you require that he uses a quantity surveyor to obtain tenders, to manage the budget as outlined earlier and to advise on payments to the contractors, subcontractors and suppliers.

How often you will undertake a review of the work and the budget – I would suggest twice weekly.

How he will ensure that you receive all the necessary warranties, guarantees and documentation.

You will also need to ensure that you get a Certificate of Compliance on completion of the project.

There is a third option which you don’t mention but is worthy of consideration and that is hiring an independent project manager to oversee the work from start to finish. The project manager would take on all the work outlined above including hiring the builder and the various contractors.

While some may view this as an extra layer of costs, many have found it removes a great deal of stress from the equation and that experienced project managers can save on costs while also ensuring the project is completed to the highest standards, on time and on budget.

Paul Dunne is chairman of the quantity surveying professional group of the SCSI; scsi.ie

Send your queries to propertyquestions@irishtimes.com or to Property Clinic, The Irish Times, 24-28 Tara Street, Dublin 2.

This column is a readers’ service. Advice given is general and individual advice should always be sought