The operators of a number of large apartment complexes across Ireland are running out of cash and heading towards insolvency, according to reports in today’s newspapers.
According to the Irish Independent, several management companies looking after about 12,000 homes are struggling to collect service charges.
While that means that the management companies are struggling to maintain apartment blocks and housing developments around the country, it also means they are struggling to pay their bills and insurance costs.
The problem is two-fold. In some cases residents are unable or unwilling to pay their service charges while in others, the apartment blocks are not full to capacity.
The Independent reported that the problem could lead to “dozens of Priory Hall-style closures” in order to maintain health and safety standards.
The cash crisis follows on from the transfer of blocks from developers to residents under the Multi Unit Dwelling Act (MUD) a year ago.
Many management boards have higher outgoings than incomings and as such are struggling to pay day-to-day costs like electricity, waste collection and maintenance.
One rental agent told MyHome.ie that the problem was “rampant” and this was backed up by the Independent who said one apartment owner’s group reported that refusals to pay charges were as high as 50% with debts now going back several years – some reaching as high as €750,000.