Client FAQs

Client FAQs


What is a Management Company?

A management company is a company established to own and look after the common areas of a multi-unit development. Management companies are responsible for the maintenance of communal areas and shared services within multi-unit developments, such as apartment blocks or housing developments.


Who is the Management Company?

Each residential unit is entitled to membership of the owners’ management company and is generally entitled to one vote.


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). 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 all units and transfers ownership of the common areas, the developer’s nominees as directors will generally resign from their roles as directors and resident Directors will be appointed.


How do I become a director of the management company?

To become a Director of a management company you must put your name forward at an Annual General Meeting by filing in a director nomination form that is included in all AGM packs issued. Your nomination must then be voted by other members of the management company at the AGM.

What are my responsibilities as an Owner’s Management Company Director?

It is the role of the Directors to act in a voluntary capacity in the best interests of all the members of the management company. These responsibilities include ensuring compliance with all statutory & regulatory obligations on the management company.

What is a residents’ management committee and how does it differ to the board of directors

Usually, at the start of a development an ad-hoc owners’ committee is formed to liaise with the management agent and/or developer on day to day management issues in the development. Although the owners’ committee has no legal standing the committee members often volunteer as Directors when the developers eventually handover the development to the members.


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


Why does the management company require a managing agent?

As the Board of Directors act in a voluntary capacity it often makes practical sense to delegate day to day management functions to an agent. The agent should also have expertise in the area of statutory and regulatory requirements for the management company.


What are service charges? How are they calculated?

Service charges are the annual fees that property owners pay for services provided by their development’s management company. These service charges 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 and this method is noted in the lease / contract that all owners sign when they purchase their properties.


Am I legally obliged to pay service charges?

You should be aware that you must pay your service charges as your solicitor should have advised you on your contractual obligation to do so when you purchased your property. You should also recall signing documents when you purchased your property, thus you were entering into a contract with the owners’ management company (OMC). The lease agreement binding you as a property owner to the OMC is, amongst other things, an obligation to pay service charges in full to your OMC for the running of the development each year.

Service charges can be paid in several ways. Smith Property Management accept card payment both online and over the phone. We accept the following card types: Major Credit Cards and Debit Cards. We also accept payment by Standing Order, quarterly Direct Debit, Cheque or Bank Transfer. For any queries on the different payment methods offered by SPM, please contact our Credit Control department by calling 01 8255423 (option 1)

How long is the service charge payable for?

As long as you own the property, you pay an annual service charge. Once the property is sold, the new owner is responsible for the payment of the service charge and the annual fee is apportioned to the date of sale.


Will the service charge fee be the same amount every year?

Not necessarily, it will depend on how much work needs to be carried out and the budget agreed by members at the AGM.


What happens if I don’t pay my service charge fee?

When you bought your property you signed a document which entered you into a legal agreement with the Management Company, to be bound by the rules of the Management Company. The Management Company can charge interest on overdue accounts as per the terms of the head lease. If the situation continues, the Management Company will pass the outstanding service charge to an external company who specialise in debt collection. This process results in extra charges being applied to the outstanding balance.
If an owner continues to not pay their service charge fee, the balance will be passed to a Solicitor to obtain a judgment in court on behalf of the Management Company. This judgment will be recorded against the property.


What is a Precedent Pre-Contract Enquiries (formerly known as Requisitions 37)

When purchasing a property, the prospective Purchaser’s solicitor will raise some general queries about that property by way of Precedent Pre-Contract Enquiries. These are a standard set of questions as set out under the MUD Act 2011 relating to the sale of the property and seek additional information about the Title of the property.
It is the responsibility of the selling solicitor to undertake to have this document completed and the solicitor will contact the Management Company (or Managing Agent acting on behalf of the Management Company) for the details. These questions are complex and time consuming and the Managing Agent will charge a fee for providing this service.
It is important to notify the Managing Agent when the sale has been finalised, and provide the new owners details, so that the Management Company’s records are kept up to date.


What is a sinking fund?

This is a building investment fund for capital expenditure. A proportion of the annual Service Charge is put aside for the replacement of major common area items i.e. roof, lift replacement, carpets, tarmac, painting and new plants or trees.


What repairs and maintenance is the management company responsible for?

The management company is responsible to repairs to the common areas only. The management company is not responsible for any repairs and maintenance works inside your apartment/house.


What does the insurance paid through the management company cover?

The management company insurance policy (known as the “Block Policy”) usually covers, inter alia, the external structure of an apartment block, the common areas, damage caused by burst water pipe, subsidence, vandalism, storm damage.


What happens if I have an insurance claim?

If you want to make a claim under the block policy firstly you must contact the management agent. The agent will forward your claim to the brokers who may appoint a loss adjuster. It is the underwriter who decides whether you have a valid claim or not. Depending on the claim type please note that there will be an excess on the policy payable by the claimant.


What are House Rules?

The House Rules are a set of regulations for living in a multi-unit development that all residents must adhere to. The rules are laid out in the Head Lease signed by all members on close of sale.


What is the MUD (Multi Unit Development) Act?

The Multi-Unit Development Act has been enacted to improve the regulation of multi-unit developments and the governance of management companies in such developments. This came into effect on the 1st April 2011 and a copy of same is available upon request from our office.


How will this affect me as a member of an OMC (Owners Management Company)?

The Act is designed to give greater transparency & control to homeowners in multi-unit developments. It aims to tackle many of the issues that have arisen in the area of service charges, handover of developments and general meetings.


What is the Property Services Regulatory Act?

The Property Services Regulatory Act 2011 applies to all Property Services Providers (PSPs) involved in the area of selling, management and letting of property. The Act sets out a comprehensive licensing system, standards of education and procedures for investigation of malpractice.

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