A Guide to Management Companies

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If you have bought a property such as an apartment or a house within a new development, there are likely to be common areas for you and other home owners to enjoy. 

These common areas may be as practical as a lift in an apartment block or alternatively could be a communal green or garden in a housing development.

But who is responsible for the common areas contained in your property?  Here’s all you need to know…

Who is in charge of maintaining the common areas?

The upkeep of these common areas is organised by a Management Company.  This is a company which is set up by the developer of the apartment building or housing development.  Each property within the apartment block/housing development will have one share each in the Management Company.

The Management Company will be responsible for the upkeep and maintenance of the common areas and insurance covering these areas. The Management Company will meet annually in order to allow residents to address issues of concern such as litter or noise.   It is worthwhile attending these meetings as there may also be discussion on issues which may affect the costs that the Company incurs each year – for example, costs relating to the frequency of works such as weeding or window washing, or the replacement of items of large expenditure such as lifts or remote control gates and doors.

Who pays for the maintenance of the common areas?

The Management Company is funded by way of a ‘service charge’ which you, along with the other residents of the apartment block/development, will be obliged to pay annually.  It is important that you account for this expense when considering whether a property is affordable for you.  The service charge can be substantial, especially where there are lifts to maintain or Block Insurance to pay in respect of an apartment block.

What happens if I don’t pay my service charge?

As with any other company, the non-payment of service charge can result in the Management Company failing which can have severe ramifications when you either attempt to get insurance or ultimately sell the property.  This can be a particular problem in the case of apartments. While a well-run Management Company can be of great benefit, when they cease to function, homeowners can find themselves greatly out of pocket and inconvenienced trying to have a new Management Company set up.  It is important that you should consider this risk when deciding if a property is really for you.

RFlinnRuth Flinn is a Solicitor in the Property Law Department of Francis Hanna & Co Solicitors. She is experienced in all areas of residential conveyancing. For more information on management companies, please contact us below or contact Ruth on rflinn@fhanna.co.uk 

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