Irish Times Property Clinic 9th day of October 2014.
Publishing Date; Thursday the 9th day of October 2014.
Q. I'm in my twenties and about to buy my first apartment. It's very exciting, I'm quite nervous but the place is a good deal. One of the reasons it's a good deal is that there is some damp damage resulting from water finding its way into one of the bedrooms through the balcony above me (the balconies on the top few floors are stepped). I've had a builder in to look at the damp damage and it is fixable, but would involve taking up the upstairs balcony.
I should be paying for it in the next month or two, and once I do the management fee of around €2,000 will be due. My builder has told me that the management company is responsible to fix this water problem. I've spoken to one or two other tenants in the building, and apparently the management team can be very slow in dealing with issues. My concern is that once they have their fee they'll be slower to pay attention to my problem, urgent as it is. I'm quite concerned as I won't be able to rent out that room until the leak is fixed, and I don't want that to be months.
So the question is; do I have any legal right to withhold the management fee until this is fixed? I'd rather not start butting heads with them from the get-go, but at the same time I'd need to get the problem fixed as quickly as possible.
A. You do not have the right to withhold paying your management fees. Members of an owners' management company (OMC) are legally obligated to pay their service charges each and every year regardless of any material issues arising, which may ironically be as a result of other members failing to pay their service charges. Your solicitor acting in your interests should adequately inform you of the basic formalities of apartment ownership and of your responsibilities and rights within a multi-unit development.
It would be absolutely necessary to engage a building surveyor to check the apartment and the development thoroughly. The cost for this may be prohibitive but none the less it is the information you will need to make an informed decision. You say that the apartment is a good deal, this cannot be verified without the knowledge of how prevalent the balcony issue may be throughout the development. If the issue arises elsewhere it will be a shared problem for all the members of the OMC, of which you are considering becoming a member. I would caution any purchase of a property where immediate finance is required by way of letting. The lending institution should adequately stress test you to ensure that you are able to make mortgage repayments. If you can afford to buy the apartment, pay the service charges on time in full each year and part finance the rebuild of the balconies in the development, manage to pay all your bills without renting a room then it may perhaps be a great deal. The issues that would be outside of your control is the ability of the other property owners paying their service charges in full and on time so that the operational and reinvestment funds are available. The members will also require the engagement of a competent and efficient agent and the participation of an enthusiastic board of directors. I understand that the two pillar banks will be releasing circa 1600 residential buy to let properties onto the open market shortly. Note the recent "SCSI Service Charges in Multi Unit Developments Survey", you might revaluate your options.
Paul Huberman is a member of the property and facilities management professional group of the Society of Chartered Surveyors Ireland www.scsi.ie
Author: Paul Huberman of H&H Property Management Consultants Ltd
Publish Date: 09/10/2014