What is a Management Company?

The Managing Agent is a commercial business with whom the Management Company contracts to procure service provision in respect of the day-to-day management, administration and maintenance of the development.

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If you are a Unit Owner, you will generally be required to pay a fee on an annual basis. This fee is known as a “service charge”, and the service charge should be set at a level adequate to finance the provision of necessary services and maintenance activities for the Development. The payment of an annual service charge in a Multi-Unit Development is not optional. This is because your purchase contract, which has the effect of making you a part owner of the common areas via your ownership of the unit and membership of the Management Company, engages your responsibility and liability for the management and maintenance of the common areas. The Management Company decides the level of service charge and this service charge bill has to be delivered to each individual unit. The Management Company should have a schedule of the costs used in computing the required annual “service charge” amount. This information should be provided in your initial purchase contract, but if not, should be available from the Management Company itself. You are responsible for ensuring that you accept the basis for calculation of the service charge before you purchase your property (Unit), as you have an ongoing legal obligation to pay it.

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The IHBA has agreed to adopt a new Code of Practice relating to Management Companies. This will be formally endorsed at the IHBA AGM and be applicable to all new management companies established by members of the IHBA with effect from 15 May 2008. The IHBA Code of Practice extends to responsibilities around the ownership, management and maintenance of common areas and the provision of common services within the Multi-Unit Development. The Code sets out a series of measures intended to ensure that developers, agents and home buyers share a common understanding of their respective roles and responsibilities in contracting for the sale/purchase of units in a Multi-unit Development and to establish a framework for the maintenance and management of common areas and for the provision of common services.

The Code of Practice addresses housing developer responsibilities in each of the following areas:

• The Management Company
• The Managing Agent
• Service Charges
• Sinking Fund
• Completions and Transfer of Ownership of the Management Company
• Snagging of the Common Areas
• Dispute Resolution and Redress
• Standard Marketing and Sales Materials

For more download the Code of Practice relating to Managment Companies (PDF).

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