How much do people pay for Site Management?

crystallady


Joined: 16/04/2008
Posts: 103

Message Posted:
17/03/2009 16:37

In all the different posts about site management companies, I can't find anything out about what would be a 'normal' charge.

We ( the villa & apartment complex) are in the process of being taken over by a newly formed management company. They have given us the annual charge of just short of £700 with the option of a monthly standing order but with a % surcharge, plus a further float which is top-upable when it dips below a certain point.

Apart from having several issues with the contract, I am not sure if this additional float is general practise?

joseph


Joined: 17/04/2008
Posts: 709

Message Posted:
17/03/2009 16:46

Hi Crystallady;



I think a lot depends on your site, ie



Is it a large site or small

If small are members in contact with each other?

Any members living permanently on site?

Could you form your own committee?

If so, why not put out to tender?

Check out the companies who do tender with other sites etc?



Just my thoughts on the little info you have provided



Regards Joseph

the butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
17/03/2009 17:06

Hi crystallady,



The first thing you need to know is how many owners are there on site. Find out what the core services are going to cost. Electric, water, pools, gardening etc.

Find out how much the new management company are going to charge for managing the site. You do need a contingency fund, in case anything goes wrong. Add all these together and divide by the number of owners. You may wish to add on insurance or money for planting up the gardens. Some management companies will give you a flat fee. Other sites have a fund management. This enables the owners to control where the money is being spent. You will read that some maintenance charges are on £50 or less a month on some sites but it will depend if they are all apartments and how many there are. Also what facilites are on site to be maintained. So there is no easy answer to your question. As joseph says, it all depends on your site.



The butlers wife

Pearlbayer


Joined: 06/10/2008
Posts: 204

Message Posted:
17/03/2009 17:19

Hi Crystallady,

I think I am in the same "Villa complex " as yourselves and would draw your attention to some of the other posts on here regarding Management Companies. This company is going to be run by one of our own and I can assure you they will be doing everything in the owners interests as they live on the site and are paying the same fees as us. I just hope that owners do not decide to withhold payments as it will make things worse for all of us.Just look at the problem on Turquoise Bay to see what problems can occur.Don't forget that we can in the future form our own Management company but as it stands, to all intents and purposes, this is our own Company.

crystallady


Joined: 16/04/2008
Posts: 103

Message Posted:
17/03/2009 17:50

Hi Pearlbayer

I was really asking any others from different sites what charges they were paying and is it the general rule of thumb to have an additional float. There are a lot of complaints about site management companies on the forum but not a lot of real information about what to expect from them and at what cost.

gates


Joined: 08/12/2008
Posts: 1096

Message Posted:
17/03/2009 18:34

you should have come to us http://www.braceybuilders.com you dont have to pay 10% comition every time you need a service as we do all services in house peolpe dont understand they pay more in the end

Pearlbayer


Joined: 06/10/2008
Posts: 204

Message Posted:
18/03/2009 10:38

Hi Gates,

We are not paying 10% comission but 5% if we wish to pay monthly instead of the Yearly figure in advance which works out at £2.90 a month. Do not think this is unreasonable.

griffin9870


Joined: 01/03/2009
Posts: 92

Message Posted:
18/03/2009 11:43

Hi Crystallady



We were paying £48 per month and £40 per year for the comunial electricity. However the management company have been forced to put it up to £60 per month due to the number of non payers. This is something you should be aware of. Check with the m/c what contingency plans they have for non payers.



Mind you, I think I would rater pay £2.90 (a typo perhaps)

Pearlbayer


Joined: 06/10/2008
Posts: 204

Message Posted:
18/03/2009 11:58

Griffin,



Thought I made it clear, the yearly figure is £696 which is £58 per month but if you opt to pay Monthly ,5% is added (£2.90) IE £60.90 per month.

crystallady


Joined: 16/04/2008
Posts: 103

Message Posted:
18/03/2009 12:29

It seems that the monthly payment is about average now but no-one has said whether they also pay into a float for the communal charges and other purchases and if so, how much?

Anonymous


Joined: 15/03/2009
Posts: 16

Message Posted:
18/03/2009 13:05

£1400 for Medview sites per annum

Aussie


Joined: 17/06/2007
Posts: 657

Message Posted:
18/03/2009 13:57

Currently pay TL150 per month (was 75 until late last year) as part of group of approx 30 small houses with large communal pool and a lot of communal lights.

Includes a full time caretaker/ gardner who lives on site.



Would still be less except for some non payers and massive increase in electricity costs.



Aussie

griffin9870


Joined: 01/03/2009
Posts: 92

Message Posted:
18/03/2009 14:47

Pearlbayer



Have read your post three times and didn't see anything about £696 for the year. And I didn't mean to upset you.



As some one who has an apartment on Turquoise Bay, I have first hand knowledge of what happens when you get non payers. And no I don't think those charges you have stated are unreasonable. Hope it all goes well.

stewy


Joined: 18/10/2008
Posts: 279

Message Posted:
18/03/2009 20:21

Sounds pretty cheap to me if they do a good job.

Stewart


Joined: 19/07/2008
Posts: 1107

Message Posted:
19/03/2009 16:54

Why not request a monthly breakdown of costs...so you can see where your money is going?.

Pipie


Joined: 05/01/2008
Posts: 5499

Message Posted:
19/03/2009 18:49

crystallady



Charges vary it depends what is offered on the complex , amenieties etc .

some complexes who have been up and running have started to get organised and offer the maintenance to a tender . an experienced management company would provide a predicted budget this would then be divided between how many apartments were on the complex and charged accordingly , on the other hand owners can again organise a tender to work for the complex for a fund this means tender gets financed for salaries/costs of running the site , again that would be presented to owners in a predicted budget what ever was left over from the fund at the end of year would be invested back into the complex . A voted in committee oversees the management company's obligations and owners at quarterly meetings .

At present we pay on our complex £45 per month for gym , 2 large swimming pools . childrens pool , and gym, showers . this also pays for 2 gardeners , and cleaners and management . hope this helps .

negativenick


Joined: 10/11/2008
Posts: 6023

Message Posted:
19/03/2009 19:05

My tenpenny worth...



You really should put the management out to tender - there are plenty of companies out here that can offer a decent service and hopefully if they know they are in competition, they will sharpen their pencils.



I understand that Turtle Bay complex are paying £60 p/m per appartment, and with 400 odd appartments the sums don't seem to add up !



A gardner is going to be paid 60 TL a day, so where does almost £25,000 a MONTH go ??





Nick

Pipie


Joined: 05/01/2008
Posts: 5499

Message Posted:
19/03/2009 19:18

Nick you are spot on . However there are some good maintenance companies out in the TRNC who are providing a fair service and that is all owners ask for .

Sandcastle


Joined: 16/03/2009
Posts: 215

Message Posted:
20/03/2009 15:44

How big are sum of these sites?



How many pools does it cover and does it include water for gardens and pools etc and sewage systems?

LynxLtd


Joined: 24/04/2009
Posts: 46

Message Posted:
17/06/2009 00:32

Good management boils down to good systems and procedures. If you are uncomfortable with a fee/float concept why not ask for a fund concept for total transparency? We would be very happy to assist- please contact Jackie for more info at Lynx at 0392-8160314 skype: lynxco_ or email info@lynxco.com http://www.lynxcyprus.com . Lynx

sienna


Joined: 09/01/2009
Posts: 1627

Message Posted:
17/06/2009 09:40

Lynx, Can you tell me what management concept (i.e. fee/float or fund) you prefer to operate, and why?

the butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
17/06/2009 12:07

Hi all,



I am interested to know if there are any downfalls to owners themselves running their complexes?

For instance if there were some permenant resident owners on site and they wanted to run the site

themelves, would they need to get work permits to do this? Could they get into trouble from the taxmen for doing this? We are very happy with our present management company but I have heard that some owners run their own sites.





The Butler

LynxLtd


Joined: 24/04/2009
Posts: 46

Message Posted:
17/06/2009 14:17

ref mes 21 v. good question thanks- it's a risk/reward decision.

From Lynx's perspective:

1- Fee/Float: if project is reasonably well built, delivered, has little teething issues & with a Homeowner rep then a float system is ok as the risk is well calculated

2- Fund: if project is being delivered, has teething issues, low sales, built quality is questionable, builder is not local... there we prefer a fund system to offset the risk

From the Homeowner's perspective:

1- Fee/Float: if Homeowners reach a comfort level on the professionalism, references, certifications, team etc. they normally go for the fee/float

2- Fund: usually it is a case of Homeowners who have had an “unpleasant experience" with previous co that require full account transparency/scope to establish confidence etc, we believe that in some cases it ends up costing more than a fee/float.

In either scenario we work with full transparency with monthly online accounts/maintenance reports etc. Hope this helps. Lynx

sienna


Joined: 09/01/2009
Posts: 1627

Message Posted:
17/06/2009 14:32

I totally disgaree with you completely the opposite from my experience



Fund is more akin to a very well finished site with no teething problems and where owners have a good track record of payments coming in on time!!! and things are running efficiently and with very little teeething problems



(A fund doesn't give companies as much freedom as everything has to be accountable and you are paid a fee for managing the fund and everything else spend wise is agreed by committe/owners and belongs to the site)



Fee/float comment about risk is calculated your risk not the owners risk - and therein lies a problem you rightly or wrongly are looking at total service fee risk from your perspective and I would be looking at a Fund base at owners risk not MC risk

Pipie


Joined: 05/01/2008
Posts: 5499

Message Posted:
17/06/2009 15:18

100% agree with Sienna also any monies left over can gain interest for the complex and as we all know high interests are paid in NORTH CYPRUS so again this is very good for owners investments money pot .



Our experience is that we do not feel it is a good idea for resident owners to run the site unless they adhere to a SLA /CONTRACT , unfortuntly you are always going to get the few residents who think they can run it to there own advantage , so in my opinion put your investments in the hands of impartial management .

LynxLtd


Joined: 24/04/2009
Posts: 46

Message Posted:
17/06/2009 16:54

Ref mes 24&25 many thanks for your comments very appreciated excellent points.

I think one can agree in general that one cannot generalize on one system being fairer than the other in respect to the Homeowners (from experience in other markets). For example on some of our managed sites we would have loved to be on a fund system but we honored our agreement (out of pocket) because of unforeseen higher expenditures relating to the project and scope. Therefore the Homeowners got a good deal and we upheld our commitments. If the Homeowners were on a fund system they would have paid 14% + their current contract. When the contracts are up for renewal we’ll give the Committee the choice and let them decide- for your interest we’ll let you know what they chose.

Therefore from Lynx’s perspective, it’s on a case-to-case basis. Lynx

LynxLtd


Joined: 24/04/2009
Posts: 46

Message Posted:
17/06/2009 16:55

Ref mes 25 excellent points thank you. Homeowners tend to think that they can easily manage a site because it doesn’t take much to arrange subcontractors for pools/gardens etc and keep accounts. From our experience however this is only 30% of the total scope. The 70% is General Admin, work order management, reporting, communication, Quality & Health & Safety inspections, and most of all following up on collections. Invariably, individuals that take on that responsibility do not manage to collect from enough homeowners to carry out their scope. Then problems arise between those who have paid and those who haven’t and the issue becomes how to move forward thereafter. Lynx

sienna


Joined: 09/01/2009
Posts: 1627

Message Posted:
17/06/2009 17:22

Ok so what will happen then you have audited accoutns available - a very good thing and this should be compulsory whichever system is chosen in my view ( some MC will not produce audtied accounts)



.. But there is money left over once everythign is paid for - do you take the money (under a fee/float system ) or do you consult with owners on how they woudl like this spent on their site?



I agree there is a lot of admin but presumable you take a salary from the maintenacne to cover this

clayton


Joined: 30/11/2008
Posts: 1143

Message Posted:
17/06/2009 20:33

if there are still empty apartments on the site which the builder owns should he pay is share towards the maitenance charges,because surely once the site is looking nice it would help him to sell his remaining apartments

LynxLtd


Joined: 24/04/2009
Posts: 46

Message Posted:
17/06/2009 20:41

Ref msg. 26 thanks for your interest. I think it’s clear- fee is a charge for a service, float is client’s fiduciary funds at their disposal. If/whenever you are in Cyprus pop in for coffee- we are located across from the Kyrenia law courts in an old renovated Cypriot property with green shutters (parking available). Regards, Lynx

Pipie


Joined: 05/01/2008
Posts: 5499

Message Posted:
17/06/2009 20:49

Most def yes , failure for developer to pay M/ fees on unsold apartments, means that all other owners would have to pay more than there fare share that is not right .



It is happening at present where a complex has only 22 sold apartments , there is no way that owners are going to keep up the running costs of that site so it stands a strong chance of falling into dis repair .



It should written in the contract that the developer will honour his obligations following unsold apartments and pay maintenance .



The fact that an owner owns a proportion of the site divided by how many owns on the site = the amount all should pay individualy .

clayton


Joined: 30/11/2008
Posts: 1143

Message Posted:
17/06/2009 20:54

thanks pipie hope so

sienna


Joined: 09/01/2009
Posts: 1627

Message Posted:
17/06/2009 22:50

Lynx I think you have answered my question it is clear a total service fee amount is set and you as the MC will get that money come what may - the additonal funds required will go to the site ! but thats the point ADDITIONAL FUNDS - we do not hae a bottom less pit of money



However with a fund all is the owners to spend - so a no brainer really ! my point is made



Regards

LynxLtd


Joined: 24/04/2009
Posts: 46

Message Posted:
18/06/2009 10:27

Sienna- Lynx uses different approaches in different markets: management at cost plus , management with a percent of GSI (gross scheduled income), management with a fund at cost plus, management with a fund with flat fees, management with a fund with success fees(on increasing GSI) etc…. for our regional activity check http://www.lynxconsult.com. We are confident about reaching an agreement that suits both parties. When a fund is involved, however, the important issue for the homeowner is to be presented with a budget that has been accurately & competitively priced at the onset in order to avoid requests for top- ups during the year. Best of luck. Lynx

sienna


Joined: 09/01/2009
Posts: 1627

Message Posted:
18/06/2009 12:09

You are correct about the fund, the budget and forecast has to be fairly accurate to avoid requests for further monies - however it is a dead cert with a total service fee that you will have put addtional monies to move the site forward.



I am sure your tailored style of management is a way forward as I agree sites are at different stages ie levels of ocupancy good payer & non-payers some owners that do and do not want to be involved.



But for me the management fund is the way forward from an owners perspective. However thank you for your very professional debate on the subject



Regards

LynxLtd


Joined: 24/04/2009
Posts: 46

Message Posted:
18/06/2009 12:23

Pleasure, anytime. It's always good to share information. Lynx