Residential

Some owners in my apartment block have approved a huge levy, and I’m not happy

Property Clinic: OMCs have tended to set low budgets and put issues on the long finger but, don’t forget, they act in the owners’ interests

Red 3D house model next to growing stacks of coins
Good estate management requires an informed and active agent, an involved board of directors and the participation of members to provide the funding. Photograph: Agency Stock
Tue Jun 07 2022 - 06:15

I’m the owner of a lovely older apartment that I purchased about 15 years ago. In the past few years, we the owners feel a lot of pressure placed on us by Owners’ Management Company (OMC) costs. Most recently our OMC held an extraordinary general meeting. I was unable to attend, but I have since been notified that a budget has been approved which would mean a significant levy has been imposed on owners. How many owners are needed to provide approval for our budget, and is there anything I can do to question it at this point?

Paul Huberman writes: The nature of your query suggests that you view your OMC as a separate entity from your interests. The OMC is made up of you and your fellow property owners and is a collective representation of all members. Now that a large portion of the housing stock is ageing, more capital investment in developments is becoming a pressing matter.

Long-term strategies of funding multi-unit developments is essential for appropriate asset management. The cheaper the historical service charge costs were, the likely the more expensive they will become to make up for previous underfunding. There has been a widespread tendency here of OMCs setting anaemic budgets, putting issues on the long finger and then hoping they’ll be dealt with at a later date, possibly by someone else. The process of good estate management requires an informed and active agent, an involved board of directors and the participation of members to provide the funding.

An independent Building Investment Fund report should be sought by an OMC to set out the funding requirements of the development over a 20-year cycle or thereabouts. This allows for members to plan for the future without the need for annual meetings, debates or EGMs to vote for emergency funding. It also facilitates a more efficient management process.

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It’s vital all members participate in general meetings. If members are unable to attend, they should avail of a postal vote or appoint a proxy in their stead. Taking personal responsibility for a property in a multi-unit development can decrease anxieties, improve on-site relations and allow the development a chance to prosper both as a community and an investment.

Section 18 of the Multi-Unit Developments Act 2011 sets out the structure for setting service charges at general meetings.

A proposed service charge can be approved by members at a general meeting. If there is a requirement to amend the proposed charges, 60 per cent of those present and voting may vote to do so. If the proposed budget is to be rejected, this is to be done by a minimum of 75 per cent of those present and voting.

Once the budget is passed the invoice and corresponding budget indicating the projected expenditure has to be furnished to all members.

Paul Huberman is a chartered property and facilities manager, and a member of the Society of Chartered Surveyors Ireland www.scsi.ie

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