Apartment owners should prepare for the worst
Owners not putting nearly enough aside for rainy day fund to meet cost of repairs
Views of Longboat Quay Apartments on Sir John Rogerson’s Quay in Dublin. Photograph: Dara Mac Donaill
Ireland is only really getting used to the concept of apartment living but, true to form, we’re getting it wrong.
A report for the Society of Chartered Surveyors of Ireland this week found that, in most cases, apartment owners are not putting nearly enough aside to build up a rainy day, or sinking, fund to meet the cost of both regular and unexpected repairs as well as general maintenance.
Sinking funds make sense – a steady amount deposited each year by all owners within a development that is available as and when it is needed. The surveyors say this is not happening, and it’s not helped by the law.
The Multi-Unit Development Act of 2011 suggests all owners contribute €200 annually. In general, that’s nowhere near enough.
But the presence of the figure only makes it more difficult to persuade owners to make sensible provision. The vast majority of property managers say, unsurprisingly, that owners don’t wish to pay higher service charges now to build a fund for future liabilities.
The surveyors recommend that it should be a requirement of development that a sinking fund is put in place from year one – ideally included in the annual management charge – and that this should be set down in any amended legislation.
It also recommends the use of regularly-updated Building Investment Fund reports by management companies. These quantify the funding required to maintain or replace ageing buildings or equipment. Six out of seven apartment developments don’t currently have such a document, the surveyors’ study says.
Even where they have, only a minority are fully implementing their findings.
In the words of the surveyors’ study, this is “storing up huge problems for owners in the future”. It says bluntly that the situation cannot continue. How very Irish.