Tim Hollingsworth explains how a resident dropping his keys down a lift shaft cost the director of the management company dearly.
“The directors of our management company can instruct expenditure without reference to the budget, right?” No, they can’t! So, if they can’t, how does it work?
“Each financial year, your property manager will prepare a budget for your block for the following twelve months. When repairs are required, they will go through an agreed process to get the needed repairs completed – and, of course, if there is a budgeting issue, this will be resolved before work commences.
However, sometimes a director of a management company acts without reference to others. As an experienced property manager, I come across this all too often.
For example, just the other day, a resident dropped his house keys down the lift shaft – how or why, remains a mystery! As this was a block we manage, he called me expecting me to organise a contractor to come and rescue his keys.
Rescuing the keys would be no easy feat, as the keys were at the bottom of the lift shaft, requiring the lift service to be suspended, a ‘difficult to reach spot’ accessed and afterwards the lift restored to full (and safe) operational order. The resident made it very clear he didn’t expect to pay – even though it was entirely his fault! Clearly, this shouldn’t be paid for by the other residents out of their block funds. Obviously, we politely advised him of this.
So what happened next? Well, after much anguish one of the directors of the management company reluctantly instructed a contractor to attend. When the contractor arrived, he found that the resident had already climbed into the lift shaft and recovered his keys – putting himself at considerable danger and potentially damaging the block’s lifts. Health & safety clearly didn’t figure heavily in his mind!
Needless to say, the contractor charged for his attendance… but who was to pay? The instruction came from the director who had no authority to spend the block’s budget. The resident refused to pay. We did not instruct the contractor, so we do not pay. Ultimately the director ended up having to foot the bill.
The moral of the tale? If your property manager says the expenditure falls outside the budget, then the money is not recoverable and the person who made the instruction will have to bear the cost. So, if your block requires a contractor on site, take advice from your property manager first to ensure the cost is recoverable… if you take matters into your own hands, you may have a bill to pay.”