Why would a managing agent on behalf of the Owners Management Company (OMC) suggest producing an Asset Register? They, the managing agents, are suggesting this at a cost to the OMC of €18k plus VAT and have put themselves forward to do the work. I would think that this information would be contained in the lease and should be produced free of charge by them. After all what are we paying management charges for?
From your query, it is not entirely clear what your managing agent means by an ‘asset register’.
Normally, as the name suggests, this is a report that itemises, and perhaps describes, all assets in a residential development. It would focus in particular on mechanical and engineering (M&E) plant and would be prepared in accordance with guidance documents from the Chartered Institution of Building Services Engineers (CIBSE).
This would not form part of the lease agreement for your apartment. However, when the development was built, or when the common areas were transferred to the owners’ management company, there may have been such a list handed over to the OMC.
However, while this is good practice, it has not always been the case in reality. Preparation of such a register, if such does not exist, would not form part of the normal duties of the managing agent so it is likely that the OMC will have to pay somebody (either the current agent or somebody else) to prepare this.
An asset register may also be required as part of a wider process to prepare a Building Investment Fund (BIF) report.
This would require the building elements of the development to also be taken into account. The BIF report would then set out likely spending requirements in relation to all aspects of the development over a period of the next 20 years or so.
Such a report is a key input to the OMC in relation to its knowledge of what level of Sinking Fund it will need, and consequently what sinking fund contributions the Company should be gathering from members today.
You don’t say how big your development is or how much equipment is in it. As such, it is hard to comment definitively on the price you mention of €18k plus VAT.
However, in relation to most residential developments in Ireland, that price seems high. As such, you may wish to ask the board of the OMC to instruct the managing agent to organise a tendering process on this matter. If you feel the managing agent has a conflict of interest, then the board may wish to appoint an independent person to organise such a process and to report directly back to the board.
The benefits of tendering are not just in relation to price. Different service suppliers may have different approaches and may bring new ideas to a particular situation.
As such, this is something any OMC board should keep in mind whenever a managing agent is proposing to do a large project itself, which is not part of its normal Property Services Agreement. It is also a point that you could make at the next AGM of your owners’ management company.
Finbar McDonnell, is a Chartered Property Manager and a member of the Society of Chartered Surveyors Ireland, www.scsi.ie
