Directors
Are they right for your estate????
Are the directors of your estate capable of running a million €€€ property development?
Recently I had an old buddy from college contact me about her issues with directors that oversee her estate. Reading her issues, I felt like we lived on the same estate!
Issues like a “BULLY” as a chairperson trying to control what people say and do was a match with my own experience. Elected directors forming cartels by “co opting” their friends who they can “control” and not allowing people to be elected via the normal processes at an AGM by their peers in the estate. At a recent AGM in my own estate 5 people put their names forward to be directors. They were all told they did not meet requirements.
My friend went on to tell me her management company chairperson would tell her what to post on social media, tell her who to block on the page and so on. My friend is not from Ireland, so was unfamiliar with corporate law and thought everything had to be “secret”, so followed “orders”.
She went on to say the management company never responds to her emails, just take her money.
When I shared that I was experiencing the same, although I had been threatened several times by the chairperson of our estate by written letter, by a solicitors letter and by his wife who approached me when I was talking to 2 residents to accuse me of taking photos of her “homes camera positions”, ( an odd thing to be worried about ). I said I had no interest in her home which seemed to turn her into a monster, which is not how she presents herself to everyone else, she then threatened me saying “YOU DON’T KNOW WHATS COMING TO YOU”.
Yes I know what your thinking, I did report her to the gardai.
My friend said she had similar experiences. It was simply bizarre! How can my friend and I have identical issues with different management company directors?
This was very concerning and I began to put a microscope on management company directors and the MUD Act which they must abide by.
So lets just go back for a minute and explain what a director of a management company is.
Multi development estates must have management companies or a residents association running the management of the estate. The reason behind this is the apartments need to have a “group” by in to sharing costs of the running lifts, cleaning, cutting grass, insurance and so on. When you purchase a home in an estate, you’re not actually buying the property outright, you’re leasing it for 999 years or buy shares into a corporation in which you own an apartment or terrace. This is kinda of like buying it as in a few 100 years our estates will probably be redeveloped anyway, but the structure of management is different.
Actually, I will go so far to say our estates that were built in 2003 to 2007 were built poorly. In some cases did not meet building regulations, were built with pyrite or mica, may have sound proofing issues etc… Point being they may not last 100 years let alone 999 years!
That being said, its not fair to say they all do, and I know plenty of homes that got their pyrite fixed in Dublin through the Pyrite Resolution Board, which I was member of in its early stages in 2009.
In short, you’re purchasing into a membership of an estate where you have a vote of what happens in the estate, 1 vote per household. The management company is set up by developers initially and when the developers have finished the estate the management company is handed over to residents. This is the time residents come forward to volunteer for the role of director. In some cases when an estate is just terrace houses, the management company may dissolve and the residents vote to hand over the roads, lights etc to the local authority.
However in a multi development estate where there is a mix of apartments, duplexes and terrace houses some type of organisation must exist to manage all the areas of the estate, including shared common spaces.
Managing an estate can be done by a residents association and the rest of the properties, roads, drainage lighting, etc can come under the council.
Or the members of the estate (home owners/share holders) can vote for the council to take charge of the estate entirely. This is of course a lot cheaper and the council becomes responsible for the kids playgrounds, roads, damage and so on. And a residents association or tidy town group may be set up to assist in building community activities and keeping the area looking great with flower pots, clean up days and so on.
In my estate we have a residents association but the management company refuses to acknowledge its existence and wont even reply to emails sent by our resident email address.
So what to do if you are in a similar position?
The MUD Act specifies that a directors life time is 3 years. If there is no one else to take the role, this can be extended under the agreement of residents at an AGM. But legally a director must step down and be re voted into his or her position.
After 3 years they take a break for at least 3 years before moving into the directors role again.
The idea of this is to stop residents forming “cartels” that control estates, the money of the estate the budget and so on. It also allows other members of the company to understand how the running of the company works and make decisions on how they would like to see their estate evolve. And generally an estate would have an experience Real Estate Agent to manage the day to day needs.
But sometimes this is not happening.
What seems to be happening is volunteers of 2 to 3 directors have cut off any attempts for people to get on their board and are treating their area like they should be feared, like a dictator.
So how does that help us.
Firstly, if these directors are not interfering with your life and they are not damaging your estate etc,… its not really an urgent matter.
However, if they are, they are using their position to intimidate others and refuse to show the details of the budget. Im not talking about the profit and loss audit, Im talking about the actual details of expenditure and what was spent. You may find yourself in trouble as you are a “SHARE HOLDER” in a company that gets liquidated and sold off to a vulture fund, then you’re snookered. Yes this can actually happen legally.
The key is to act immediately.
Do not be one of those people that think, ah sure, it will all settle down ….. no…… that actually never happens in crime of any sort, particularly blue colar crime. The more the directors get away with the more they do.
Remember the banks…..
Ok so back to the MUD ACT.
You can request by law the members registry. Most agents will give it to you for free, but if you find that your having difficulty getting the members registry of other share holders you need to consider why?
If the management company refuse to give you the members registry claiming GDPR or some nonsense like this, then you send their letter or email stating this to the ODCE (Office of Director Corporate Enforcement ).
This will take time but you can also bring your management company to court. Or you can start a Facebook page in your area and put out a call for owners of properties to contact you.
Then call an EGM. I would advise waiting for the members list and contacting people with your concerns, remember not to accuse anyone of anything you can not prove but be sure to point out activities you do have proof of such as videos, photos, letters etc…
Yes some people wont like to be challenged, and although its just a voluntary position, it is one that is managing 100,s of thousands of €€ to millions…… So there is reason to be concerned if you feel a mismatch of director and estate has occurred.
You’re probably thinking at this stage, WHY PAY FEES? Right?
Remember you are a share holder in an estate and its in your best interest for it to be run correctly and flourish in prices. If it has not flourished in prices during the period of a director and other areas close by have, their may be reasons relating to poor management and spending. Another RED FLAG…
You need to act!
But to not pay fees, means you are not paying for the vital up keep of the aesthetics *even if nothing is being done the money has to be going somewhere and you need to find out where*.
200€ of each members fees goes into a sinking fund which goes towards the construction of the apartments, fixing them, painting them etc. If your apartment was build between 1999 and 2013 than this is very important as many estates during this time had structural issues and would need to be fixed earlier than normal.
For more information on the sinking fund go to: http://www.irishstatutebook.ie/eli/2011/act/2/section/19/enacted/en/html#sec19
Did your FEES just go up and you don’t know why or what to do?
Stay tuned for the next blog on what to do if you management fees go up…
Take care, stay safe, and keep an eye on your directors – Don’t be ripped off and know your rights! Remember they are volunteers but thats why you pay for professional property agents… so mistakes are not made.
Samantha Dooley BBS (Hons), MMII GRAD, M.Sc (Hons)