ACCA warns of property management ‘time bomb’
The Association of Chartered Certified Accountants (ACCA) today warned of a potential “time bomb” for some homeowners, which could result in attractive properties quickly becoming downmarket.
The organisation claims that serious problems with the requirement for property management companies to manage the public spaces in apartments and housing estates are now emerging.
These companies, usually set up by the developers as a requirement of planning permission, own and manage the public spaces of most new housing estates and apartment blocks.
Now it has emerged that some residents not paying their annual management charge, resulting in these companies becoming insolvent.
In some cases where residents then attempt to take control of the company, annual returns have not been filed with the Company Registration Office, resulting in some property management firms being struck off.
This results in the ownership of the land, including both the apartment block and common areas, transferring to the Minister for Finance, and transferring them back can be a difficult and expensive exercise, according to the ACCA.
“This is a time bomb waiting to go off,” said Roger Acton, head of ACCA Ireland. “If lifts are not replaced and rubbish is not collected and repairs to sewerage pipes are not made, many attractive estates and apartment complexes will very quickly become downmarket.
“Nobody will want to live and where the value of the property will drop.
“Buyers of apartments or houses where an annual management fee is payable to a property management company should undertake a very careful legal and accounting due diligence prior to buying.
“They need to confirm that all residents are legally obliged to contribute, that it is not voluntary and confirm that residents may not sell their property without discharging any liability they may have to the property management company.
“They should also check the management company’s legal and financial status in the Company Registration Office which can be done on-line at the CRO web site www.cro.ie.”
