Permanent TSB criticised for management fee delays

Sinn Féin's finance spokesman Pearse Doherty has hit out at State-controlled Permanent TSB for not immediately paying management-fee arrears on properties that it repossesses from customers.

Instead, the bank waits until it has sold the property before settling the bill on the arrears. On average, there was €6,353 due in management fees per apartment sold by PTSB last year.

This emerged via a written answer from the Minister for Finance Michael Noonan to a recent question from Mr Doherty.

PTSB told the Minister that this included fees owing from the original owner and from the bank, which is responsible for management fees incurred when the repossession takes place.

Mr Doherty said this was an “unacceptable practice” and called on the bank to pay the fees.

“I am amazed at the brazenness of Permanent TSB and, I believe, other banks, in adopting such an arrogant attitude towards management fees,” he said.

“The effect of this practice is to complicate potential sales by adding a nasty surprise of arrears on fees to buyers while putting management companies under pressure, too. Naturally, this can lead to an increase [in fees] for other compliant apartment owners.”

In response, PTSB said rent receivers were only appointed in cases where the property owner was not engaging with the bank and their role was to ensure that the rent being paid by the tenant [to the owner] was paid to the bank.

“In such cases we will typically agree to pay management charges linked to the property as they arise but not to settle historic bills which the owner has not paid and which would typically be substantially higher than rent being received,” a spokesman said.

“Where a property is sold, we will use the proceeds of the sale to settle any outstanding management charges. To do so before the property is sold would only risk the bank’s money and would be unwise. The responsibility for any such debts is of course with the owner of the property not the bank.”

PTSB had 407 properties in the Republic in its possession at the end of last year, including 196 buy-to-lets, many of which would be apartments that would involve annual management fees.

AIB said its policy was to ensure that all agents appointed by the bank were instructed to ensure that all charges, including management fees associated with properties, were "discharged in a timely and appropriate manner".

Bank of Ireland told the Minister that the information being sought by Mr Doherty was "not disclosable".