Successful Apartment Living (Part 2)

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This research is the second part of Dublin City Council's report Successful Apartment Living; A Role for Local Authorities in Private Residential Manangement Companies;Part 1 looked at the strengths and weaknesses of the existing system. This report is a survey of Service Charges, Design, Management and Owners' attitudes in 193 Private Apartment Schemes in Dublin City.

Text of Successful Apartment Living (Part 2)

  • 1.Apartment Living Oct 07.qxd 10/22/2007 6:48 PM Page 1SuccessfulApartmentLiving Part 2Survey of Service Charges,Design, Management andOwners Attitudes in 193Private Apartment SchemesIn Dublin CityJune 2007Report by: Evelyn HanlonPrivate Housing UnitHousing and Residential Services

2. Apartment Living Oct 07.qxd 10/22/20076:48 PMPage 2Contents Executive SummaryPart 11. Introduction and Background2. Survey Methodology3. Results of Physical Survey (193 Schemes)4. Financial Survey (62 schemes)5. Combined Financial and Physical Survey including Tenure AnalysisPart 26. Report from the Focus Group of OwnersPart 37. Recent Developments8. Overview of Issues and Research ConclusionsAppendix 1 Survey FormAppendix 2 Map of City Showing Schemes SurveyedAppendix 3 Dublin Fire Brigade Discussion Document on Fire Safety Issues in Apartment DevelopmentsBibliographyThe data in this report was collected from a number of sources. Every effort was made to ensure itsaccuracy including checks against the source material and asking managing agents to review datarelevant to the schemes they managed in 2005. Despite this it is inevitable there will be some errors,but it is not believed that these will be material enough to affect the opinions or analysis made.As far as possible the data has been allowed to speak for itself with as little qualitative assessment aspossible, leaving it up to the readers to form their own opinions. To ensure the data was comparableit was necessary to exclude schemes when the analysis was referring to a type of expenditure notincluded in a particular scheme e.g. not all schemes showed detailed expenditure for each aspect ofmanagement.1 3. Apartment Living Oct 07.qxd 10/22/2007 6:48 PM Page 3 4. Apartment Living Oct 07.qxd 10/22/20076:48 PMPage 4ExecutiveSummaryExecutive Summary1.0 IntroductionThis research is the second part of Dublin City Councils report Successful Apartment living A Role for LocalAuthorities in Private Residential Management Companies; Part 1 looked at the strengths and weaknessesof the existing system.Anecdotal information has dominated discussions about the apartment sector and this research wasundertaken to provide quantitative information to redress the imbalance between quantitative and qualitativeresearch/discussion.The private apartment market in Ireland is relatively immature: Few schemes have accommodated people from childhood, to adulthood to retirement Few private schemes have been refurbished or rebuilt. Even the professionals and providers in the sectorare inexperienced about the life cycle issues facing apartment schemes how do owners agree thatrefurbishment is uneconomic and that demolition and rebuild is required if one owner fails to agree whatoptions exist for the other owners wanting to pursue rebuild. Few purchasers can obtain advice from their parents about purchasing an apartment in the way they canwhen buying a houseHowever there is a willingness on the part of designers, planners, developers, managing agents andpurchasers to give apartments a chance and it is important to take this opportunity.There are a number of inter-related issues that affect the success of apartment living. Broadly they are;location, design, management, service charges, behaviour of residents/owners, social/tenure mix and howall of these interact.Apartment living arrangements involve a high degree of interdependence and shared communal areas. AnApartment Owners Management Company (AOMC) belongs to the apartment owners and is the mechanismby which owners eventually gain control and ownership of schemes.Most apartment schemes use the limited liability company structure incorporated under the Companies Acts(either limited by shares or guarantee). Usually companies engage managing agents to provide day-to-dayservices. These services can be classified as Legal and Corporate, Financial Management, InsuranceManagement, Communication and Administrative Services and Buildings Management 2 5. Apartment Living Oct 07.qxd 10/22/2007 6:48 PMPage 52.0 Research Methodology, Issues and ConstraintsFor this report both quantitative and qualitative research was undertaken. The surveyors (who came from anenvironmental health and planning background) evaluated each scheme against predetermined criteriarelated to design, safety, cleanliness and facilities based on a survey form included here as Appendix 1.The qualitative research undertaken by Rubrikes consisted of focus group sessions with twelve apartmentowners. The Rubrikes Report forms part of this document and provides owners observations and insightsinto apartment living in Dublin in some of the schemes surveyed.A number of problems were encountered during the physical and financial survey including difficulty gainingaccess to schemes, lack of information about which agents and AOMCs are associated with schemes andfailure by many companies to file up-to-date accounts. There was also a lack of data about the location andnumber of apartment schemes in Dublin City generally.Accounts rarely provide detailed information about important aspects of apartment schemes and most do notprovide information such as: The address or location of schemes Size and type (number of bedrooms and whether the units are houses or apartments) Number of units Age of scheme Managing agent (unless the agent was the company secretary or presenter of the accounts) Mix of land uses i.e. residential or combination of residential and other uses. There was no data found in the accounts to show who the developer was and whether communal areasare vested in the AOMC, although it was possible to deduce both of these by looking at the names andaddresses of the directors. No list of members provided No mention of the tenure of the apartments in schemes. Information about the sinking fund including disbursements is generally poor. The accounts did not include data about scheme characteristics which would affect long term sustainabilityand the level of sinking fund required e.g. lifts, pumps, underground car parking or unusualcharacteristics/facilities such as mixed use or childcare, laundry, play areas, swimming pools. There was no mention in the accounts about the basis of apportionment used to share the costs ofmaintenance and management between the apartments (and where relevant the non-residential users). 3 6. Apartment Living Oct 07.qxd10/22/2007 6:48 PM Page 63.0 Physical SurveyThe survey was undertaken in Summer 2006 and the financial period reviewed was 2005, (2004 data wasused only for comparative purposes). The physical survey examined 193 private apartment schemes totalling15,804 apartments. AOMCs were located for 142 of the 193 schemes but it was impossible to find theAOMCs for the other 51 schemes. A detailed financial review including a comparative analysis wasundertaken for 62 schemes where the AOMCs were located and where the 2004 and 2005 accounts hadbeen filed. Given the importance to owners of their AOMC remaining a legally active body it is a concern thatso many companies had not filed their 2005 annual report and accounts with the Companies RegistrationOffice by early 2007 when the financial survey was undertaken. Table A shows the spread of the schemessurveyed. All the schemes are shown on a Map in Appendix 2, the 62 schemes included in the financialsurvey are shown coloured red, the others are shown coloured blue. Table A Location of Schemes SurveyedRelationship to Canals Location Within OutsideAllUnits 7,775 8,029 15,804Schemes84109 1933.1 Age of Schemes SurveyedThe age of schemes surveyed was determined from the date the AOMC was incorporated and by otherenquiry when information about the AOMC could not be sourced. Schemes were grouped to take account ofthe urban renewal tax incentive schemes of the 1980s and 1990s, of those surveyed 84 were built after 1986and 90 were built after 1998. Table B Age of Schemes SurveyedRelationship to Canals Location Within OutsideAll 1974 1986118 19 1987 1997 4341 84 1998 2005 4050 90Schemes84109 1934 7. Apartment Living Oct 07.qxd 10/22/20076:48 PMPage 73.2 Size of Schemes SurveyedThe schemes surveyed were chosen at random and are spread throughout Dublin City Councilsadministrative area. Managing agents say that, in their experience, schemes of less than 100 tend to havehigher unit costs than bigger schemes. Most large agencies prefer not to manage blocks of less than 50believing that it is difficult to maintain a low unit cost for fees while providing the type of service that ownerswant. In addition agents claim that newer schemes are bigger particularly in areas with high land values.Table C Analysis of Schemes Surveyed by Location and SizeUnits1974 to1987 to1998 toCanals Total1986 1997 2005 Within Outside 1 25822 20 13375026 9910 34 43 444387 100 199 217 18 181937200+ -10 99 1019Total20 83 90 84 1091933.3 Physical Characteristics of Schemes SurveyedMost schemes surveyed had lifts although 67 schemes (four floors or less) did not have lifts and a further 8schemes which are higher than 4 floors also did not have lifts. The survey examined the accessibility ofschemes for people with physical disabilities, and found that nearly 50% of schemes are not easilyaccessible. New schemes need to comply with the 2007 Department of Environment, Heritage and LocalGovernment Best Practice Guidelines for Delivering Homes Sustaining Communities entitled Quality Housingfor Sustainable Communities.Table D Analysis of Provision for People with DisabilitiesAge Good ProvisionPoor Provision Total1974 to 1986614 201987 to 199736 47 831998 to 200554 36 90 Total96 97 193 5 8. Apartment Living Oct 07.qxd 10/22/2007 6:48 PM Page 83.4 Suitability of Open Space for ChildrenThe researchers considered whether the open spaces in the schemes surveyed were suitable for children.Their assessment recognised that children will use car park areas and that even if desirable it is impossibleto effectively restrict this use.Table E Suitability