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Apartment owners 'getting fleeced'

Apartment owners are being left at the mercy of unscrupulous management agents and being forced to pay over the odds for inadequate services, a leading figure in the sector has claimed.

Mark Fisher, managing director of Global Property Care Group, has lifted the lid on a range of practices which he alleges are commonplace in the management of Ireland's 500,000 apartment units.

He has revealed that his own firm has been offered "kickbacks" by plumbers and cleaning service firms looking for maintenance contracts on the apartment complexes he manages.

Describing the offer of what he termed "rebates", he said, "When we set out in 2006 here in Ireland, we would have had to contract services because we didn't have our own services fully set up yet.

"We would have had contractors who already had arrangements with other agents, and they offered us a percentage back. We were told that if we were to give them 'X' amount of business every year, that we could invoice them for a percentage of that business.

"For example, in the case of a cleaning company, they would submit a tender price for the development of say €50,000 a year. We were told that if we guaranteed them that business, they would give us a €5,000 'rebate' for that year. We didn't go for that.

"Instead, we set up our own services and we strictly drew a line that we never took any kind of a rebate from any service provider."

Having witnessed at first hand the results of poor and even non-existent provision of maintenance services to apartment complexes across the country, Mr Fisher is now calling on the Government to empower the Office of the Property Services Regulatory Authority (PSRA) as a matter of urgency.

The Global Property Care MD identified some potential signs that apartment owners should look for if they suspect their development is being mismanaged.

"If you have guys putting in bills for €15,000 for landscaping and the grass is only being cut now and again, while none of the shrubbery or the weeding is being done ever, then somebody is just putting in a figure and being paid for it.

"Another thing to look out for is if you are paying per bin on the collection of waste -- who is actually there to say what number of bins is being collected on a weekly basis? Who is there to verify that? We found in one case that residents in one development were paying up to €20,000 a year for illegal waste that wasn't being recorded by the previous agent.

"A lot of the problems we have found stem from the very first budget drawn up for the development.

"In one development, we found a first-year budget for the ESB bill to be €5,000. The [real] budget came in at €20,000.

"The standard of accounting in many cases is atrocious. We've seen agents miscalculating service charges. They don't budget enough.

"We've also noticed service charges being kept artificially low so that apartment units can be sold by the developer in the first place. Then the next year, residents find their charges increasing sometimes by up to 100 per cent. You can see that from the accounts."

Unfortunately, the matter of paying one's management fee in its entirety is not open to negotiation, regardless of the quality of the service.

Mr Fisher said, "If the service charge isn't paid, there is a mechanism where it can be collected through the enforcement of the lease. If somebody fails to pay that debt, there are a number of mechanisms there to recover the cost. If that charge is not paid, that unit may not be able to be sold until outstanding payments are paid off in full.

"People quite often don't realise that not only will they face a personal judgment against them, but that it will also affect the saleability of their property."

Asked what regulation exists in the property management sector at present, Mr Fisher said, "At the moment, anybody looking to set up a property management agency can do so.

"In property management, there's no regulation. Anybody can set themselves up in the business."

Calling on the Government to address that deficiency, he added,"We are very supportive of the Property Regulator. We don't know when exactly he is going to be empowered. Obviously with Nama and the Budget, it's being pushed out to next year, but the legislation is there in the form of the Multi-Unit Development Bill and the Property Services Bill to protect the client and to regulate the agent.

"The more regulation, the better, we believe."

Sunday Independent