CityLiving:Frustrated by your management company? Why not vent your feelings online, says Edel Morgan

Online discussion forums are enabling people to get to grips with the head-spinning complexities of being a member of a management company and are helping them to share their experiences. A typical question thrown out on these forums by perplexed property owners in the hope that someone - anyone - will shed some light on their situation, is: "My service charge is €1,500 per annum. Does that seem excessive in a development of 200 apartments?", or "I've requested a breakdown of the service charge from the management agent, to no avail. What should I do?"

The websites, which include neighbours.ie, boards.ie and daft.ie, are filling the yawning chasm that has been created by the lack of regulation and education in the area. There are now an estimated 500,000 apartment dwellers in this country and apartments account for around half of new residential units built in Dublin.

And it's not just apartments that are being run by management companies. Local authorities are washing their hands of new townhouse estates and are insisting residents pay for their upkeep.

Looking through some of these discussion forums, it appears that excessive service charges are a highly contentious issue. In its consultancy document published before Christmas, the Law Reform Commission commented on the widespread practice of developers setting service charges in new developments at ridiculously low levels. This, of course, is all about not scaring the punters off with too much realism but the subterfuge often ends in acrimony when buyers are presented with the "non-fictional" charge - which can be double or even triple what they're expecting.

A source said the developer usually sets the service charge when a new scheme is launched and the management agent is often reduced to "a mere servant or puppet of the developer". He says the agent is often caught in the middle, often knowing the service charge is inadequate to cover expenditure, but going along with the ruse anyway. "Agents should be stronger and resist this, but sadly they often aren't," he said.

While the National Consumer Agency and the Law Reform Commission have called for a regulatory body to be established, at the moment it seems that developers often call the shots. Ideally, a residential scheme should be handed over to residents immediately after the last units are completed but there are instances of developers holding on to blocks for five, 10 and 15 years or more.

A developer might cling on to a scheme if it has future development potential or valuable parking spaces they don't want to relinquish to the residents.

Not that management agents are all unwitting pawns in some developer's game. Some agents have even been accused of engaging in false invoicing, and inventing call-outs to apartment blocks to boost revenue. A resident board member of a city centre apartment block once told me he gets impatient when he hears people in other developments complain that a management agent is squandering funds collected from the annual service charge.

He believes residents need to take control of their development's financial affairs and monitor every cent being spent by the agent.

However my source tells me that while residents should keep track of expenditure, "there is a case for the argument that being overzealous in this regard could slow down the process of management and bump up management fees if every two weeks the agent has to go before the board to get cheques signed".

An increased agent's fee might be a small price to pay. He says a lot of agents don't produce invoices or provide a comprehensive breakdown of costs, "just a vague income and expenditure quarterly spread sheet. It plays on the ignorance of apartment owners and is sharp practice which regulation should clean up".

According to David Ward of Core Estate Management, apartment living is so new in this country that agents often don't know historically how much they should budget for the sinking fund. "There is nothing to set the bar at and now some of the older blocks are 20 years old and the lifts need to be replaced and there aren't the funds. The sinking fund should be ring-fenced in a high interest account and should move with inflation. Before hiring a management agent, residents should consult an engineer, a surveyor, or a financial person to assess how much the building will depreciate and then calculate how much needs to be set aside for the sinking fund."

He also recommends that residents should tender for a new agent every three years to ensure they get the best value. "You shouldn't just stick with a management agent because you are used to them. Agents are servants of the management company and in that respect are no different from the contract cleaners."

Edel Morgan will be on leave until the summer