FAQs

The Management Company is the entity that is responsible for looking after the interests and affairs of an estate or building/complex, including the maintenance and upkeep of the common areas and shared services. In most cases, every single owner of a property/unit within an estate automatically becomes a Member of the Management Company on completion of purchase, however some Management Companies require purchases to apply to become a Member as per the Articles of Association of the Company, as opposed to automatically becoming a Member.

The Articles of Association is the rule book that governs a Management Company and the elected Council of Management. This document specifies certain procedures and protocol to follow when organising and proceeding with a General Meeting, how the Council of Management should operate and its powers, rotation of Council Members, Accounts and so forth.

At the first AGM (Annual General Meeting) of the Management Company, a Committee is elected. This Committee is made up of individual Owners/Members (normally between 3 and 10) and it is their duty to manage the affairs of the Management Company on behalf of all other Members in line with the Articles of Association and Head-lease of the Company. The Memorandum and Articles of Association of the Management Company will determine the length of service before the individual Members of the Committee have to stand down by rotation and/or be re-elected. This committee will decide on the policy decisions as to the running of the Management Company on a day-to-day basis.

The Headlease is the Contract between the GOG (Government of Gibraltar) and the Developer whereby specific Covenants are covered as to the various responsibilities for the upkeep of the building/estate and the Ground Rent payable to GOG for the site where the building stands. This Headlease is usually transferred to the Management Company once the Developer has finalised the construction and releases the building.

An Underlease is the Contract that is signed by the Purchaser on completion of the purchase of a property/unit. The Underlease document contains specific Restrictive Covenants that both the purchaser and the Management Company have to adhere to. Within this document there will be information which is particular to the property, such as the Service Charge payable, and others which will be general and apply to all owners within the building/estate.

The House Rules are Rules & Regulations that are made up by an elected Council of Management and which are approved/ratified by Members present at an AGM or EGM. Most of these Rules are contained within the Underlease documents and they are regulations by which the purchaser should comply with for the benefit and enjoyment of all who reside within the building/estate. 

A Managing Agent is the entity which the Management Company will contract to assist them with the general Management of the building/estate, including the financial aspect of the Management Company. The Managing Agent will work with the elected Council and will provide advice on Management issues as well as comply with Policy decisions and instructions received from the Council. The Managing Agent would normally also manage the Income & Expenditure of the Management Company and provide the Council with Management Accounts on a regular basis.

The Service Charge is the means by which the Management Company collects funds in order to be able to cover the costs of all works/services and run the Management Company effectively. The level of the Service Charge payable per property/unit is defined within each individual Underlease document and a budget of expenditure is prepared annually in order to ascertain whether the level of Service Charges is adequate for the Management Company’s requirements.

Service Charges covers all expenditure incurred by the Management Company for the running and upkeep of common areas within the building/estate. These expenditures would normally include items such as Building Insurance, Electricity & water, Cleaning, Fire Security, Ground Rent, Security, General Maintenance, Management Fees, Pest Control amongst others. There will always be a provision for long-term Capital Expenditures as there will be a need to replace certain fixtures & fittings/building components, amongst other major items of long-term refurbishment such as the painting of the exterior facade.

All decisions regarding the funds of the Estate is made by the Committee, this includes approval of quotations for works, approval of Contractor’s contracts plus any refurbishment works which needs to be carried out. The Agent will provide the Committee with the necessary information so that they may come to a decision.

The Management Company is always responsible for the maintenance of the Estate, however, the Managing Agents has a responsibility to ensure that the maintenance is carried out in an effective manner and should it not be then they have to report these short-comings to the Committee, so that they may discuss the matter and instruct the Agent as to action to be taken. It has to be remembered that the Estate belongs to the owners, hence the Management Company and the Agents are there to work with the Owners to enhance and protect their assets, however, this has to be done by working together as a team.

This is always a difficult subject and one which has to be tackled quickly and effectively. The primary action to be taken is to identify the person responsible, if this is an owner then action can be taken swiftly. However, if the vandalism is caused by outsiders, then the whole issue of security of the Estate would need to be looked into.

Every Estate has their arrears procedures in order to ensure that all owners pay their service charges promptly. The Agent will ensure that this procedure is followed through.

Every resident/owner needs to abide by the House Rules of the Estate and should this be broken then the Committee would have already agreed procedure to deal with this matter. Depending on the severity of the breach, the Estate’s lawyers could be asked to take action. This includes owners who may not clean after their pets whilst in common areas. If the Committee has evidence as to who the owner may be, then action can be taken against this particular owner and/or resident.

The Developers are responsible for the latent defects of the Estate. However, this has to be reported to them in a timely fashion. The Estate’s service charges should not be spent on the remedial of defects within the estate.   

Service Charges are invoiced according to the terms of the Underleases, which could be on a quarterly or bi-annual basis. Some Management Companies allow Members to pay monthly via Standing Order, however others do not accept monthly instalments and require the owners to pay the demand in full as and when it is due. Payments can also be made by cheque or cash at our offices for the full amount of the invoice. It has to be noted that now payment can also be effected via Online Banking Services, should this option be available to you. Please note that because we have to operate individual client accounts for all our Clients, we cannot offer the option of Direct Debit or Debit/Credit Card payments.

Ground Rent is a charge invoiced by LPS (Land Property Services Ltd) on behalf of the GOG in respect of the land that the building/estate is built upon. The amount payable is stated on the Headlease, although this can increase by the rate of inflation every three years. The Ground Rent payable by each individual property/unit is specified in the Underlease document and is invoiced together with the service charges, however the Ground Rent collected from all owners is then paid to the GOG via LPS Ltd.