NEW controls have been introduced on the charges that can be imposed by managing agents (syndics) of co-ownership properties (copropriétés).
The new regulations provide that syndic fees for managing building works in a copropriété must now be notified in advance and approved at an AGM of the co-owners (copropriétaires).
Fees for the management of minor building works will need to be included in the general management fee, while only fees for specific major works can be an additional separate charge.
Consumer groups have been demanding for years that the law should prescribe the services that are included in the basic management fee so that there can be greater certainty as to the charges owners face each year.
Although the general charges imposed by a syndic for carrying out routine management of the property are fairly modest, these charges can increase substantially once fees for specific tasks not included in the general fee are added.
In a recent survey of syndic fees, the consumer magazine Le Particulier found that the average general charge was €130 a year per property, though the figure rose substantially for smaller copropriétés.
However, in all cases this basic fee could rise to several hundred euros with the addition of specific charges for particular services.
Attendance
These services included attendance outside working hours, recovery of arrears of charges, supervision of specialist maintenance work, recruitment of caretaking or other staff, insurance claims, charges on change of owner.
In some cases even letters to the owners of the properties were separately billed. The most significant of these specific charges has been the supervision of building works (administrative and technical).
As there has been no legal framework that stipulates what should be included in the basic fee, managing agents have been free to determine their own list of services.
The representative body of residents of co-ownership properties, the Union Nationale des Associations des Responsables de Copropriété, estimates that 15 years ago specific fees amounted on average to 10% of the general management fee, today they can be in excess of 100%.
All co-ownership owners in France are obliged to appoint a syndic to act on behalf of the owners and undertake management of the copropriété.
In small co-ownership properties of less than 10 owners, the service may be carried out by one of the occupants of the property.
Nevertheless, in the majority of cases, the owners decide to appoint a professional agent, whose term of office may run from one to three years.
Their appointment is made at a general meeting of the owners, on the basis of a single bid or a contest between several agents. The bid is normally made on the basis of a general management fee for a range of services (honoraires de gestion courante), as well as separate charges for specific other services (honoraires de prestations particulières).
Without a standard list of services to be offered under the general management fee, it is often difficult for co-owners to evaluate bids from different managing agents. A syndic offering a seductively low general management fee is not necessarily going to be the best offer, simply because the agents do not have the same conception of the list of services that should be included with the general fee.
During progress of a recent major housing bill that went through parliament, consumer groups demanded that the government legislate on the issue.
As a result of an amendment to the bill placed by a senator, the government has now imposed greater regulation over fees for supervision of major building works but there remains no standard list of general services.
While in the past the majority of syndics were small companies managing only a few co-ownership properties, there is now an increasing trend for the service to be provided through a major national network, such as Gestrim-Lamy, Tagerim, Oralia, or Loiselet & Daigremont. Representatives of these syndics claim that the vast majority of managing agents now offer a single fee for most services, and those that have yet to do so are gradually falling in line.
They reject the accusation that management agents charge unreasonable fees for the services they provide, and argue that the profession is, in general, poorly remunerated. Indeed, they point out that it is always possible for co-owners to change their syndic at the end of the term of the contract.
Although they may then be able to appoint a new syndic at a lower rate, there is no guarantee that the cheaper alternative is not going to be at the expense of the quality of the service.
Co-owners demand action
A BODY representing people who live in co-ownership buildings - l'Association des Responsables de Copropriété (ARC) - has drawn up six proposals which they say would improve relations between residents and syndics, to be submitted to the government.
The suggestions are:
■ An official government decree should be made standardising syndic contracts and clarifying what should be included in the general management fee. The ARC says extra charges have proliferated, down to such fees as “stapling fees” or “envelope fees.”
■ Syndics should be obliged to hold a separate bank account for each building they run, so that the way they are using co-owners’ money is more transparent. Currently syndics usually try to persuade co-owners to opt out of this arrangement by charging more for it.
■ Creating a new professional body (ordre) to supervise the work of syndics and help ensure good practice.
■ The conseils syndicaux (representative groups for the co-owners) should be able to have responsibility for organising or supervising small day to day works delegated to them (where they want this) - due to the fact that syndics are typically not present on site often enough.
■ Syndics should establish a dedicated “obligatory works fund” for the building along with a works plan covering several years, to make sure that major maintenance and renovation work is done when it is needed.
■ Syndics should not be able to employ firms to do work in the building that they own or have an interest in to prevent conflicts of interest.
