Property management service charges
July 2010
Many goods and services in Ireland have been coming down in price in recent times. But despite a falling property market, some consumers are experiencing higher bills in one particular area: the service charges they have to pay property management companies.
Proposals are currently going through the Oireachtas under the Multi-Unit Developments Bill 2009, which may soon give consumers more rights in terms of the clarity of service charge bills and how they are calculated.
With or without these changes, what action can you take if you are getting unsatisfactory service or if you find that these bills are rising without good reason?
The following are some of our ConsumerProperty.ie website's main points in terms of service charges.
| Don't forget to check back on the ConsumerProperty.ie website for more details - it will have updates on your rights under the new legislation if and when it comes into force. The site also has other guides, tips and resources on your rights and responsibilities if you have bought an apartment or house in a multi-unit development. |
1. Read the contract carefully
Your starting point should be the contract which governs your relationship to the management company.
Service charges are not an optional payment if they are part of the terms and conditions of your contract when you bought your home. Once you conclude the contract, you have an ongoing legal obligation to pay these charges, usually on an annual basis.
Withholding your service charge as a protest is not advised - this is a breach of your contractual obligation under the terms of your lease. Bear in mind too that some management companies charge interest on money owed or late payments.
2. Know who to go to
Who do you go to if you are dissatisfied with the level of the service charge, the service provided or the information about how the money is being spent?
You should first raise the issue with the management company rather than with the managing agent. The reason is that the management company (not you) has the contractual relationship with the managing agent.
The management company's directors decide the service charge. While they may be guided by the managing agent, the ultimate responsibility for setting the charges and their collection lies with the management company.
The contract between the agent and the management company should specify the procedure for dealing with owners' complaints.
If you are a tenant, ask your landlord to forward your complaint to the management company.
3. Other steps you can take
Forming a residents' association may be another important step if one hasn't been established already. If you are unhappy with high bills or the level of service, other owners are likely to have similar problems.
A residents' association cannot determine the charges in itself, but there is strength in numbers and you might eventually take over the management company itself.
At the very least, a combined group will have a stronger lobby when seeking information from the management company in relation to how the budget is set and charges are calculated.
Also if you need to seek legal advice, you may be able to share the costs among a group of people. Approaching another management company which is keen for the business may be another way of getting some free guidance and advice.
4. Check for tax reliefs
Home owners in multi-unit developments may be entitled to relief at the standard rate on some service charges if they have paid them in full and on time in the previous calendar year.
Service charges paid to local authorities qualify for income tax relief for the following domestic services:
- 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.
Learn more
Visit our ConsumerProperty.ie website for guides, tips, checklists and other resources