# Holiday Homes v Private Interests and the MUD Act



## PeeBee (10 Feb 2017)

I am writing on behalf of my partner who purchased her home in *Killarney* nearly seven years ago and now finds herself in a legal quagmire, a nightmare, through no fault of her own. I will do my best to briefly outline the problem in the hope that other readers of 'Askaboutmoney.ie' may be able to provide some guidance. The matter is complex but here, I hope,  is the gist:

My partner purchased her home outright in 2010;
It is a detached house set on about half an acre lawn and her site is now delineated with  post- and- rail fencing;.
Her home is located within a development of holiday homes but it is crucial to understand that* her house NEVER WAS, IS NOT, and NEVER WILL BE A HOLIDAY HOME*. Not alone is her home distinctly different in character to the 44 (including one pub and a house being 'used' to accommodate an employee of the Managing Agent) other properties comprising the 'village' it is not subject to any covenants relating to its use;

At time of purchase she was assured that she would get (inter alia) grass cutting, cable TV, bin collection, insurance etc. This she would get for about €300/400 pa. She paid €386 in 2012. She was never invited to attend AGMs and the OMC has gone from insisting that she was not a shareholder [indeed, the asked her to prove her shareholder status!] to now insisting that she is a shareholder! 



SHE HAS NEVER RECEIVED ANY OF THESE SERVICES contracted for. NONE, despite repeated attempts to get the *MANAGING AGENTS *to address these matters they have literally ignored all verbal and written communications. Instead they have applied to the *District Court* for a debt judgment alleging non-payment of service charges! *c€7,000.* She has retained a solicitor who has entered an 'Appearance Notice'(?) and the claim will be repudiated. But the matter is more serious than that and this is where we/she so badly needs your help.
I have purposely highlighted the'*Managing Agents'* This is because this company [let's call them *'ABC Ltd' *act as the Letting Agents for approximately 30 of the holiday homes and hold a permanent proxy vote for those units]. Interestingly, *'ABC Ltd.* Does not hold a licence to act as property management company(!?). Despite this , *'ABC Ltd'* is also the *OWNERS'MANAGEMENT COMPANY* (OMC) to the development, having manipulated the vote and the AGM by demanding the proxy of each holiday home under their control, thus defeating the letter and the spirit of the MUD Act.

To compound matters, *ABC Ltd*., run the OMC as *'ABC MANAGEMENT Ltd'* and conflate the accounts and other financial records in order to line the pockets of the directors and oppress a small group of shareholders in the OMC [the non holiday homes]. Such scant financial records that my partner has managed to obtain via the CRO fail to show any contribution fro the Holiday Homes under the direct comtrol of *'ABC Ltd.'* to the OMC! It would appear that the individual owners of the holidays homes are in receipt of an annual 'dividend' of about €1750 in return for a full maintenance of their investment properyties! Interestingly the full repairing agreement with *'ABC Ltd'* also covers all utilities, TV, gardening, insurance and a 'waiver' of the OMC service charge!!! In return the individual owners sign over their OMC proxies to the managing agency which also acts as the OMC. !!! Conflicts of interest abound and their are serious matters of Taxation and Benefit in Kind. (?)

It is useless to suggest that an EGM/AGM be used to oust a company that is acting in open defiance of the Companies Act, the MUD Act and the regulations governing the Management of Property. Their obligations under these laws have been brought to their attention as has their conflation of accounts with reckless disregard for the need to keep proper financial records. They are attempting to have a small number of private home owners pay for the maintenance and internal upkeep of the holiday homes that they control. In short, these two companies are acting fraudulently at worst and certainly with a reckless disregard for normal business practice and the law.

The OMC [*ABC Management Ltd]* has been written to by registered post to their Registered Office, to their solicitors amd to their accountants requesting documentation per the MUD and Companies acts,to no avail. *'ABC Management Ltd.,*' are so arrogent that they do not see fit to even acknowledge the requests. Thankfully, the An Post Tracking and Delivery makes their ignorance all the more egregious. It may also give you a flavour of these so called OMC people to note that they call all meetings at a venue more than 100 Kms from the 'village' in question.

I know there is a lot in the above. I have tried to keep it to the salient points and will readily give clarifications as required. The companies alluded to above are clearly in breach of the law. They have raised '*fraudulent' invoices, conflated accounts, failed to give information as required and continue to act against the Members' interests, have no transparancy in their conflicts of interest ..*

Is an application to the Circuit Court the only remedy towards having these so called OMC removed and the directors (2) common to both 'ABC Management Ltd' and 'ABC Ltd. Struck off?

All constructive observations will be welcomed. Thank you.


----------



## OMC FIX (10 Feb 2017)

I personally lodged a formal complaint to the Property Services Regulatory Authority about the unlicensed "Management Agent" more than 2 years ago and have regularly asked the PSRA for a status report. They say that I am not entitled to know what has become of my complaint.


----------



## PeeBee (10 Feb 2017)

Thanks 'OMC Fix'. Did you give your name to the PSRA when you made the complaint?


----------



## OMC FIX (11 Feb 2017)

Yes. Absolutely, what good is an anonymous complaint? 

I have also brought my complaint to the attention of two successive Ministers for Justice, Tanaiste and TDs. All have been very polite but have referred me back to the PSRA where I have written to the previous CEO and several Senior Staff. 

Investigative Reporters particularly those in RTE have done more for Justice in this Country than all of the Regulators put together. For example, NCT, Nursing Homes, Garda complaints, Child Care facilities, Charity management and many more. Do you know anyone in RTE ?  Do you know Paul Williams the crime Reporter ?  

Have you considered a complaint to Garda Fraud Squad or Revenue, ODCE, CRO who all have roles in policing corporate malfeasance ?


----------



## Joe_90 (11 Feb 2017)

That is a very long post.

There is a lot in this.

So there is an estate with 44 houses with an Owner Management Company.  Of the 44 houses 30 are potentially leased under a long lease to a "Holiday Cottage Letting Company". This was a scheme whereby investors leases their property under long lease to a separate company which ran a business of letting the houses and paid an annual rent to the owners.

The "Holiday Cottage Letting Company" in turn dominates the OMC as it has an interest in 30 of the 44 properties.

I'm not sure that the HCL requires a PSRA licence to act as a holiday cottage company.

If the directors of the OMC are not paid by the OMC then the OMC could be considered to be self managed, as the common directors are representing the interests of the HCL.

So I'm not sure if your issue is with the PSRA at all.

Is the OMC a company limited by guarantee? If so it should have had audited accounts prepared up to a couple of years ago.

Is the OMC a company limited by shares there should be 44.

The original purchase documentation should mention the OMC.  The solicitors should have advised on the implications when the property was purchased.

What has the solicitor defending the current claim for fees against you said about membership of the OMC?

As for the comment about the dividend to the members.

Are you suggesting that all the members pay their fees into the OMC and then some members receive a dividend from the OMC while others don't?

If you feel that the directors of the OMC have failed to keep proper books of account or to have the accounts audited when required to do so the Office of the Director of Corporate Enforcement is the place for your complaint.


----------



## PeeBee (11 Feb 2017)

Thank you to *'OMC Fix' and 'Joe_90'* for the speedy replies and comments.

Firstly to '*OMC FIX*' on the matter of *PSRA* and complaints.

Yes, I 'phoned them and was 'advised' that an anonymous complaint was preferable to a 'signed' one! Strange I thought, but a polite gentleman in that office re-assured me that such complaints would be fully investigated. He went on to state that the policy of that Office is not to give progress reports! However, the same gentleman told me that the Company/ies in question do [ subject to the facts being established] *need a LICENCE *as they are permitting short and long term lettings. They also act as the OMC for the 'village' which, if I understood the PSRA, placed similar obligations on them to obtain a Licence.

I am disappointed to learn that your efforts in a similar situation came to nought but very much appreciate your willingness to share your experiences. Thank you in advance.

Secondly, let me address '*Joe_90*'.

Thank you for your thoughtful and inciteful reply.

The “holiday cottage letting company'” I've called it the* 'ABC Limited' *does, as you say, “DOMINATE” the OMC through an in-built and permanent majority. Therefore, they cannot and will not act in the interests of the Home Owners. There are two directors of the *'ABC Ltd'.*

See my comment to *'OMC Fix'* above regarding the Licencing issue and the '*ABC Ltd*' [The 'HCL' as you refer to it and '*ABC Management Ltd*' [who are also the OMC!!!] '*OMC FIX*' went to some lengths and it looks like my partner will have to travel the same road.

The *two directors* of the 'holiday homes letting company' , *'ABC Management Ltd' *are the same *two director*s of the OMC , '*ABC Ltd' *and it is noteworthy the OMC 'board' comprises only* two directors*. In short, these persons contol the OMC and run it in the interests of the HCL as you call it! Their accounts, such as they are, are an exercise in obfuscation and their so called AGMs & EGMs [held, if at all!] more than 100 Kms from Killarney!, *Minutes, Arts and Memos, Shareholders Register, Bank a/cs including Sinking Fund, Invoices etc are an exercise in conflation and are NOT AVAILABLE on request to bonafide shareholders.* I wonder why?. The Directors of the OMC do draw fees from the so called OMC entity under various headings, including 'management' fees, expenses etc. In short, 'Joe_90', this OMC is not a self- managed company. It is a 'pocket' company masquerading as an OMC and openly flouting the law and prejudicing the rights and interests of a group of shareholders. Yes, as you say, they solely represent the interests of the holiday homes and of course their personal financial interests! The *common directors* act with ignorance and apparent impunity.

For clarification, the so called OMC is a company *limited by shares*. My partner is fully aware of her rights and obligations under the purchase as she is to the two way nature of a contract. She is equally aware of the 'services' she was to receive!

You are correct about what I refer to as 'a dividend' to a group of 'holiday home' investors but it issues from the *ABC Ltd *[your HCL] direct to the individual investor.

I am not saying that all Members pay into the OMC! Patently they do not! There is no transparency but such matters will be thrashed out in the Courts.

Finally, your comment about the ODCE is noted and again let me thank you for your thoughts and time.


----------



## Palerider (11 Feb 2017)

You state that the OMC hold 30 proxy votes, they can use these to esablish a quorom for meetings but not for voting, owners should provide proxies to other owners whose interests are aligned, the idea of the OMC voting is ridiculous as an example they can vote in whatever charges and their own fees as they like, ah no I don't think so, arrogant for sure but wrong so challenge the validity of that.


----------



## OMC FIX (11 Feb 2017)

PEE BEE, the word "conflate" had me rushing to google and I found that it basically means smoke and mirrors. As my chosen pen name OMC FIX might suggest, I have some experience in the MUD(dy) field, however it was an Investor who, was advised to avail of various tax shelters by "Professionals". 

My life experience has been as business owner and Director of several Limited Liability Companies, all of which reported to Revenue and CRO and were run conscientiously to comply with legislation. As my pen name might suggest, a fellow Investor and I were so shocked and appalled by the mud-management of OMC, sometimes by well intentioned but inexperienced volunteer Directors and sometimes by people who treated the OMC as if it was "their" Company and felt they could do as they bloody well liked.  One such Director has changed Solicitors (more than once) and "Auditor" when awkward questions were asked

My advice, PEE BEE is to attack o as many fronts as possible, as "storming Norman" said when asked if they were attaching on various fronts, he said "all of them".

The legal route is vital because your Partner cannot sell her property until all service charges have been paid and must be able to show that the OMC is fit for purpose with AGM, budgets, transparent cost sharing of service charges.  You mentioned various categories of Users so this development is "mixed use" and the MUD act dictates fairness and transparency.

If "conflate" means that there are more than one set of books, take that to the ODCE and CRO and Garda, and Accounting body that regulates the "Auditor".

But, the law is a slow process and if you want maximum impact and outcry, try to meet with the people in the Media, print media or RTE. 

Don't waste time on Politicians, they will refer you to the Permanent Civil Service. That's been my experience.


----------



## PeeBee (11 Feb 2017)

Yes *'Palerider*', I mentioned that they [the OMC] have failed to provide *Articles and Memoranda and all other required documentation*. They are/seem unimpressed by the legal niceties of the *Companies Act and the MUD Act* and do not respond to Recorded Post addressed to their Registered Office [same office as their Letting Company]. These registered letters and normal requests were copied to their *various firms of Solicitors* and *also copied to their/'our' OMC Auditors*! Not alone did they all fail to comply with the requests, they did not even have the common courtesy of acknowledging receipt of the recorded letters. As a matter of fact, they can/have repeatedly voted _de facto_ their own fees and use the same firm of accountants for the Letting Company Ltd as they do for the OMC Ltd company! In the absence of the legal paperwork, Minutes etc it is a case of these '...boys'  colluding and manipulating the law and the voting procedures. Am I correct in saying that it is only those present who can vote? Can the directors exercise the proxies in a vote? These questions can only be answered by reference to the Arts & Memos, Minutes etc(?).

Thanks


----------



## OMC FIX (11 Feb 2017)

Are there still 30 homes available for holiday rentals ?  Do you now if there are long leases between the Owners of those homes and the Owners of the holiday rental company ?  

Who insures these holiday homes ?  IF the Owners of the holiday rental company pay the insurance premiums do they have an "insurable interest" in the holiday homes ? 

Have you spoken to the body / bodies that give accreditation to these holiday home providers (Tourist Board etc).  

What about future bookings and deposits taken for future bookings ?  IF there are not long leases in place between the holiday rental company and the Owners of the homes are these deposits secured by some third party ?  If so, have you considered speaking to the entity securing these deposits, IF NOT, have you considered speaking to the Financial Regulator regarding unsecured deposits ? 

IF there are long leases in place between the Owners of the holiday rental company and the Owners of the homes being rented, how can these properties be sold except with a "sitting Tenant"?  Have any of these properties been sold recently ?  Was it / were they sold with "vacant possession" ?  IF SO, doesn't that suggest that there was no long lease in place on that / those property(ies) ?  

To get back to the word "conflate" can you show that the OMC filed "dodgy" docs with the CRO ?  Is that enough to interest Revenue and An Garda Siochana ?


----------



## PeeBee (11 Feb 2017)

Slowly, slowly catch 'e monkey! 

Hi again 'OMC Fix'

You are way ahead of me in your knowledge of dodgy OMCs. You have given me much food for thought, thank you. Am I correct in saying that an OMC must make the insurance arrangements known, in writing, to all shareholders in the OMC? IMHO, the question of an insurable interest can only be teased out on a 'discovery order' for ALL documents, including bank statements and Minutes of Meetings. A forensic examination of ALL documentation with the threat of possible * criminal sanction* action against the directors *in their personal names* and, both 'mirror' companies will probably be necessary to dislodge these charlatans.


----------



## cremeegg (11 Feb 2017)

More heat than light here guys.

All companies are run in the interests of the majority of shareholders.

The position of a minority shareholder is always vulnerable. I understand that the purchaser probably didn't look at it as acquiring a shareholding day one, more buying a property, but the reality is that the management will, indeed must run the company in the interests of the majority.

If you are contractually obliged to pay the management fees, then you should pay them. This is especially true if the case ever goes to court. If the judge asks "and have you paid your management fees ?", "No but..." is not a good answer. You would loose credibility in the eyes of the court.

If the management company is not providing the services they are charging for, then you would certainly have a case against them, but not if you don't pay your fees.

€386 management fee is by a way the lowest I have hears of. Doesn't sound like a rip off.


----------



## PeeBee (11 Feb 2017)

The management fee should read €1386. Apologies. The OMC does not issue valid invoices and invites the shareholder to make payments to the Holiday Letting Company! Furthermore, this OMC asks that payments be referenced to properties not owned by my partner! Go figure that one!?. There has never been a rejection of a Service Charge but only on production of valid paperwork, Yes, the action against these people will be a tough battle because of their nefarious dealings. If these people were acting in good faith they should have invoked the Mediation provisions of the MUD Act.

The contract is void/voidable/non-existant! You are probably aware of the criteria necessary for a valid contract? We believe it to be an 'empty' contract

The MUD ACT sets out the obligations on the OMC to provide information, to act with transparency in striking the annual charge and NOT TO OPPRESS a group of shareholders. We are also aware of the normal obligations on a Member.


----------



## OMC FIX (11 Feb 2017)

Please don't confuse the OMC insuring the common areas of the development against "public liability risks" with the holiday rental business insuring bricks and mortar owned by private persons against the many and varied risks associated with valuable private properties.

For example, if the private properties are mortgaged the Lender will insist that the property is insured and their (Lender's ) interest in the property are noted.

For example, I can't insure your motor car because I won't lose a cent if it is destroyed by flood, fire or accident... therefore I do not have an "insurable interest" in your motor car.

If you allow me to rent your home and to retain a portion of the rental income am I your Agent or what is the relationship between me and thee ?

If you allow me to rent your home and retain a portion of the rent provided I insure your home, do I have an "insurable interest" in your home ?  How and Why would you think that ? If I pay the insurance premium on your home are you receiving a benefit in lieu of rent - a taxable benefit in kind ?

What if I also pay the water charges and ESB bill and decorating costs and maintenance costs and replacement costs of items that need to be replaced ?  Are all of these expenses on your property effectively an un-declared and therefore un-taxed benefit-in-kind ?

Would I have, or acquire over a period of several years "an equity" in your property by virtue of the sums I had expended on your home ?

Now, let us consider that the sums I expend on your home are "wholly and necessarily incurred" in the course of me providing short-term holiday accommodation in your home ... would it not be reasonable to expect that I would  claim those expenses before calculating the tax due on my business profit ?

What would a reasonable person expect me to do ?

Now, let us take this just one step further and suppose that my business is registered for VAT ... would you expect my business to claim the VAT on the sums expended on your home ?

Would this mean that your home is now in the "VAT net" and that you must pay VAT on the sale of your home when you decide (or more correctly are allowed) to exit the holiday rental scheme ?

Now, as you already know, your home is part of a Multi unit development and you are a member of the OMC and you must pay the service charges, can you simply shrug your shoulders and say "the guy renting my home must pay the service charges" ? The answer is of course not and, in any event, IF he (me in this example) has, is that not also a taxable benefit in kind?

Now, supposing the guy renting your home and the guy demanding the service charges are "one and the same" and suppose that (since he is in a rather unique position) he neither demands the service charges on your home nor pays the service charges on your home but instead attempts to recover most, if not all, of the total un-proven service charges from the Owners of the homes that do not support his holiday rental scheme ... does that sound reasonable to you ?

Now, finally, suppose that push-comes-to-shove and that the OMC (which may by this time be insolvent) demands that you and the Owners of the other 29 holiday homes must pay your shares of the service charges for the last several years to the OMC (to whom they were always due and are now long overdue) ... do you suppose that the holiday rental company would have put aside the funds to pay the sums demanded for 30 holiday homes which it has rented as your Agent ?

Too much supposition ?  Only time will tell.


----------



## PeeBee (12 Feb 2017)

Hi OMC FIX,

.... "*the guy renting my home must pay the service charges"* ?

In this context do you, in fact, mean 'the letting agent'?

The so-called accounts of the OMC make no reference to vested interests nor to the receipt of service charges from the holiday homes under the control of the Managing Agent who, as you have gathered acts also as a 'supposed' OMC !!!

Yes, in a nutshell, these people are financing the full repairing lettings [incl' a convenient net of service charges arrangement]   by attempting to gouge the private homeowners with the use of 'smoke and mirror' accountancy and the complicity ...


----------



## OMC FIX (12 Feb 2017)

WOW, that's almost incredible in this day and age.  I respectfully suggest that you leave no stone unturned.

I believe that "the only thing necessary for the triumph of evil is for good men to do nothing" ?  I applaud and admire you and your Partner for your efforts.

I saw that someone suggests that "all [OMC] companies are run in the interests of the majority of shareholders and the position of a minority shareholder is always vulnerable".

I agree, but respectfully suggest that it would be more correct to state "all OMC should be run in the interests of the majority and provided always that the majority act within the law(s) when acting in the interests of the majority".  However, I believe that your posts suggests in fact that a very few act are acting as if they were the majority with the complicity or acquiescence of the majority.

As my pen name suggests, I have some expertise in the OMC field.  I look forward to your updates and to helping in any way I can.


----------



## PeeBee (14 Feb 2017)

'Cremeegg' makes the point that (sic) *"a*_*ll companies are run in the interests of the majority of shareholders."* _and without sounding facetious, s/he also employs the well-worn cliche about 'more heat than light' [nice pun ]. Not wanting to argue with the axiomatic let me just say this:

All companies must be run in compliance with the MUD Act, The Companies Act and all Regulations governing the management of property. The Law has a 'Letter' and a 'Spirit' and does not permit the tyranny of the majority! There are, for instance, criminal sanctions for those who persistently ignore the legal requirements.

Yes, Cremeegg, majority rules but NOT A contrived majority. As 'OMC FIX' puts it ... _*"... provided always that the majority act within the law(s) when acting in the interests of the majority"*_


----------



## peemac (14 Feb 2017)

I used to be a director of an omc - a thankless task at the best of times! It was in Kerry too and one house in the development (9 houses) was excluded from the omc even though it was within the curtilage of the development. 

If you go to the cro website you should be able to view many of the documents regarding accounts. Up until 2015 all omc accounts had to be audited. You will also be able to download mems and arts, details of directors etc.

But best website for you may be kerry co co planning site - their map is interactive and you should be able to call up all details regarding planning including the exact mapping of common lands owned by the omc.

Of all councils,  kerry are the most meticulous and every bit of correspondence is scanned and uploaded. You will probably be able to see the transfer files from developer to omc with map detailing precisely what lands are included. In the omc I was in, the house excluded was clearly defined as being excluded from the omc.

Under strict omc regs, if you were a member you would have had to get a copy of accounts,  had to get invoice and had to get details of agm. You can make a complaint to odce if there are issues that concern you.


----------



## OMC FIX (14 Feb 2017)

Supposing that a coach full of people - let's call them "shareholders" - (in a hurry to go somewhere, a match or the Airport or the Train Station) shout at the coach Driver - let's call him the "Chairman" to drive through a red light at at junction and supposing that the coach Driver does so and is then involved in a very serious collision.  The Garda and the Ambulance and the Fire trucks are then called and statements are taken from coach Driver and coach Passengers and witnesses and the Driver(s) of the other vehicles involved... Do you think it would help the coach Driver to say that he was following the instructions of the majority ?  Do you think the majority (coach Passengers) will support the coach Driver's version of events ?  Would it be any comfort to the injured and the relatives of the bereaved to learn that the coach Driver was "only following Shareholders' instructions" ?

Do you think that the PUB in the development described by PEE BEE could ignore the licensing laws, and if so would you expect them to get their licence renewed ?

Do you think that the OMC in the development described by PEE BEE could put up signs showing 120 kph speed limit within the built-up development ? 

Do you think the OMC could unilaterally approve an allocation of gun licences and / or approve the shooting of all barking dogs or other domestic pets within the development ?

IF none of the above are acceptable, how could it be acceptable to ignore the MUD Act and Companies Acts and Property Services Regulations Act and others legislation ?

Do you think that ignorance of the law is an acceptable defence ?  Strangely, some people do.


----------



## PeeBee (14 Feb 2017)

Thank you 'peemac',

By the sound of it, you were a conscientious director of a legitimate  OMC and that is laudable. However, If you read closely my postings you will see that here we are dealing with a horse of a very different colour!  The CRO is of limited value when a forensic audit and access to the more important paperwork is necessary to prove the misdoings of a 'pocket' OMC. Besides, The MUD Act and the Companies Act set out expressly the duty of the companies to provide [at no real cost]  all necessary documentation. 

I'll also offer these extracts from the Companies Act for consideration:

*Rights Under Section 205 *

*Right To Information

Shareholders have the right to inspect and obtain copies of information and documentation pertaining to the company, including the company registers, minutes of general meetings, memorandum and articles of association, financial statements, and auditors’ reports. Shareholders are also entitled to sight of the balance sheets of any subsidiaries of the company.*
..............................................................................................................................................................................................................................................................

*A shareholder has a right under section 205 of the Companies Acts (as amended) to commence legal proceedings against the company where the affairs of the company are being conducted in a manner oppressive to any shareholder, or in disregard of any shareholders’ interests. Conduct is oppressive when it is burdensome, harsh and wrongful.



 And from The MUD Act:
*
In addition, Sec. 17 and 18 of the Multi Unit Development Act, impose clear legal responsibilities on the directors of OMCs.* 
*
Finally, 'peemac', your comments regarding Kerry CoCo will perhaps prove to be of use and I thank you for the direction.


----------



## cremeegg (15 Feb 2017)

The representatives of 30 properties in a development of 40 is not a contrived majority. The directors of a company are (unlike bus drivers) obliged to act in the interests of the majority. They absolutely must act within the law, notably they cannot oppress minority shareholders

Accounts must be lodged with the CRO. The information they must contain is outlined in law. Directors are not required to go further that the requirements, in general accounts only contain the bare minimum required by law. Group companies can prepare group accounts with minimal information in relation to individual companies within the group.

PeeBee's post no.20 above is very informative, but I cannot see that it offers much relief to the OP


----------



## OMC FIX (15 Feb 2017)

I have attended AGM where the Chairman of the meeting waved a bunch of A4 and stated that he held proxies for say 24 shareholders.  He may well have been waving 12 proxies and 12 blank sheets of A4 because he refused to allow quite a number of Shareholders to examine the papers he had displayed to the meeting or to list the Names of Shareholders whom he said had given him their proxies.  Could that have been be a "contrived majority" ?  Were the decisions reached subsequently lawful ?


----------



## cremeegg (15 Feb 2017)

Whatever about the position of the OP the moral of this story for others is stay away from management company situations. Another reason not to buy an apartment !


----------



## PeeBee (15 Feb 2017)

Hi 'cremeegg', I am the OP! I am the one who is accusing the OMC of assembling a 'contrived' majority and if you follow the thread you will see why  Ii have put the accusation in inverted commas! OMC FIX's contribution at 22 above outlines a not dissimilar abuse of the law. 



cremeegg said:


> Directors are not required to go further that (sic) the requirements,


 .....[of the law one presumes]

'cremeegg', *THE LAW DEMANDS FROM ALL LIMITED COMPANIES*, amongst other things, the unambiguous  availability to ALL SHAREHOLDERS the following

Members of Irish companies have the right to *inspect and obtain* copies of certain company information:


*Memorandum & Articles of Association* or the Constitution
*Minutes* of general meetings and resolutions
Register of members, register of directors and the *register of directors’ interests*
*Unabridged financial statements*, directors’ report and auditors’ reports, Bank account including the Sinking Fund account

*Unabridged financial statements* of any subsidiary company for the preceding ten years
I have clearly pointed out that this OMC has failed to produce any of the above when asked, verbally, in writing and even by Registered Post.

Now, 'cremeegg', what would *'The man on the Clapham omnibus',* or you dear 'cremeegg', do?


----------



## PeeBee (15 Feb 2017)

cremeegg said:


> Whatever about the position of the OP the moral of this story for others is stay away from management company situations. Another reason not to buy an apartment !



It is not an apartment! Read OP please! 

Kindest,
PeeBee


----------



## OMC FIX (15 Feb 2017)

Let us all face facts and be realistic. 

Thousands of people already own apartments and hope to sell them at some stage.  For those people, and for the thousands more that will, of economic necessity buy apartments in the future and / or live in apartments in the future the OMC must be fit for purpose because the OMC owns the common areas and freeholds for these apartment developments and for many other developments like small estates, where the local Authority has not taken the roads and services "in charge".  

Simply suggesting that it is better to avoid such developments instead of putting up a fight to get the OMC in such developments to do what they were set up to do and are obliged by LEASE agreements and by LEGISLATION to do is not a solution. 

Do not lose sight of the fundamental problem here, which is this, the OMC has no persona, it is the elected Directors who break the law(s) and it is these same Directors who appear to be creating so many problems for so many Shareholders in these OMC.


----------



## Dermot (15 Feb 2017)

There also needs to be a change in the situation where you get all the documentation when purchasing a property that the common areas will be handed over to the owners and they can select people as Directors when a certain % of properties are sold.
There are several estates where this occurred and the developers went burst and what was left was semi worthless to the banks and the common areas not transferred to the OMC.  The common areas in some cases have a difficult  title to sort out and developers and banks have no interest in sorting it out or even co-operating with the residents. In some of these cases the properties are in negative equity and a lot of these people do not have the money to contribute to sorting it out.  The management company does not strictly have an insurable interest in such situations. This type of thing has happened and will happen again.  
There needs to be something put in place before building commences whereby the common areas are handed over with proper title and a sum lodged with an independent third party together with a cash sum to enable the common areas to be finished.  There also needs to be another look taken at how representatives of the builder can be involved in an OMC.  
The idea of bonds has not worked terribly well.  I have seen too many situations where builders were able to get building and planning without having a bond as part of the conditions.  In other cases it was so ridiculously low that the builder walked away without finishing.


----------



## OMC FIX (15 Feb 2017)

Hi Dermot, I assume from your post that you, like me, are familiar with dysfunctional OMC (quite a majority of the OMC with which I am familiar are in fact dysfunctional).

As a result quite a considerable number of Shareholders are already trapped in terrible situations with OMC, and as you correctly pointed out, cannot afford the Professional fees to resolve their situation even if all Parties were agreeable and fully committed to resolving all OMC problems.

You are also correct when you say that when Banks and other Lenders appointed Receivers to wind-up some Developers' portfolios, those Professionals did not resolve the legal twilight in which they found relevant dysfunctional OMC.  Instead, they sold en-masse at a considerable discount and left the mess for someone else to sort out.

So, if you are / were an Investor (like me) who was advised to buy into tax designated Multi Unit Developments (designed to promote "urban renewal" or to "promote tourism") or were advised to "invest" some of what would otherwise have gone into a private pension fund and (like me) you now find / have found yourself face-to-face with Long John Silver or Jesse James who, because of poor attendances at previous AGMs is / was the Chairman of a the Board on one / or more OMC and is / was running it in a (let's use the word) "Cavalier" fashion where (a) you lost and (b) he / she / they won and he / she / they have absolutely no intention of resigning his / her / their [clearly] untenable position ...  what must one do ?

The answer, sadly, is either (a) cut and run (and leave the mess for  the next poor hoor or (b) stand and fight.

As one of those that stood and fought, and fought and fought, I am now offering advise to those that must now stand and fight.

There is another less obvious aspect to this problem too and that is that many people "of a certain age" (because of Professionals' advices) bought and still own these apartments (and other MUD holdings) and many are unable to "stand and fight" sometimes because of their age and circumstances they can longer stand or fight ("hobble" maybe, but not stand).  Many of those people of my acquaintance have in fact paid for professional advices and many have engaged Solicitors to write worthy letters pointing to the relevant law(s) that are being broken etc and, to my certain knowledge, most of those letters are ignored, unanswered (and probably unopened).


----------



## OMC FIX (15 Feb 2017)

Ahhh, PEE BEE ... the famous "man on the Clapham omnibus".  Good ol' Rumpole.


----------



## PeeBee (15 Feb 2017)

Has anyone challenged a rogue OMC in the *CIRCUIT COURT?

*It's 'Kafkaesque'  when one considers that the directors can ride roughshod over the Members and the Law, using the Members' own funds to do so! I.E. at no personal financial exposure !!! Catch 22?

What were the legal draughtspeople thinking when they drew up such leaky legislation? IMHO, these highwaymen, the so-called directors, will only be stopped when they are held* personally responsible for malfeasance and fraud!
*
Perhaps there is a hungry and ambitious lawyer reading this who would be willing to act '_*pro bono*_'/or, on a *'no foal, no fee' *basis  [and perhaps earn a name for her/himself in the annals of legal history? This contributor is in possession of damning proofs [*ACTUAL and NOT VEXATIOUS*] of the misdoings of the OMC/Managing Agent referred in my original posting. 

Because of the prohibitive costs involved, my partner must proceed with caution as a pyrrhic victory will be useless.

I HAVE EXPLAINED THAT THE OMC IS A 'POCKET COMPANY' OF THE MANAGING AGENTS - same directors. AS SUCH,  IT HAS CONTRIVED TO CONTROL THE OMC WITH AN 'INBUILT MAJORITY' EXPLAINED BY ME IN THE O.P. THEREFORE,

*HOW CAN THE OMC BE REMOVED OTHER THAN AT AN EGM/AGM? *

And please, to save everyone time, do not reply if you simply want to re-iterate the AGM mantra. My partner has been harassed, and oppressed by these people. She is at her wits end and distraught by this matter. All constructive ideas will be welcomed.

Sincerely,
PeeBee


----------



## mf1 (15 Feb 2017)

All constructive ideas will be welcomed.

STOP POSTING IN CAPITALS. ITS SHOUTING

It makes what might be quite interesting, nothing more than an irritating rant.

And no, " no hungry and ambitious lawyer reading this who would be willing to act '_*pro bono*_'/or, on a *'no foal, no fee' *basis [and perhaps earn a name for her/himself in the annals of legal history? " would act when they'd have to spend most of their time trying to comprehend what the issues are BECAUSE THEIR CLIENT KEEPS SHOUTING AT THEM .

Best advice - get a solicitor, pay them, deal with it, including, if necessary, going to the  Circuit Court.

mf


----------



## PeeBee (15 Feb 2017)

mfi, Thank you for the welcome! 

Very perspicacious of you 'dear boy/girl'




mf1 said:


> All constructive ideas will be welcomed.
> 
> STOP POSTING IN CAPITALS. ITS SHOUTING
> 
> ...



... and your "best advice", like your welcome, says more about a mind-set than a desire to be constructive. There are people out there willing and able to help.

Besides, nobody forced you to read or reply to the "rant"! Get over it and get a life!

Kindly,

PeeBee


----------



## OMC FIX (15 Feb 2017)

Is this thread too specific, in so far as it refers to a development of holiday homes with one or more private residences and a pub ? 

Isn't the real underlying issue that so many OMC appear to be dysfunctional ? 

Perhaps PEE BEE should start a new posting on OMC problems in general ?

One idea that has been kited several times in my experience is for aggrieved parties in OMC to form a Co-Op of sorts, where each Member pays say 100 euro into a "war chest" and, depending on Membership size and value of the war chest, that one, two or three "winnable cases" are chosen and prosecuted through  the Courts.  

I hope that's an accurate summation of PEE BEE's original posting, forgive me if I'm wrong.

PEE BEE is understandably upset and frustrated and deeply troubled by the situation he and his Partner find themselves in (through no fault of their own and despite their best efforts) and perhaps, like me, he / they find themselves wondering what part of "illegal" and "unlawful" a good many Citizens of this Country do not fully understand ?


----------



## PeeBee (15 Feb 2017)

Hi 'OMC FIX'

Thanks again for your CONSTRUCTIVE [with apologies to 'mfi' for 'shouting! ] support on this troubling matter.

Yes, your summation is pretty accurate and I compliment you on your grasp of the essential facts. 

I will be happy to travel on the 'Clapham omnibus' with your suggestions which are based on experience and knowledge rather than the jibes of the ignorant and the cliches of the 'silent' '.

Yours,
PeeBee


----------



## OMC FIX (15 Feb 2017)

There are none so blind ...

I am Irish and I appreciate that the law is loosely interpreted by many. For example, the difference between single yellow line and double yellow lines on the road means you can't park  there at all at all ! And though I neither drink nor smoke I too have spent a few nights - as a designated Driver you understand - in pubs which have merely locked the door and dimmed the lights at "closing time".  Mea culpa.

That said, the problem with OMC is that the OMC own the common areas and freeholds and absolutely must attend to maintaining the "fabric" of the buildings and must be "fit for purpose". But since OMC are relatively new to Ireland it seems that there is a certain National nonchalance attendant on their governance.

What does concern me, and should concern every sane Citizen in this Country is that OMC must survive or the developments risk becoming worthless tenements.

The other concern I have is that some of the high profile OMC failures to date (which may perhaps have had more to do with poor design and build than mud-management admittedly) have had to be rescued by the Taxpayers (Dublin City Council for example) and have resulted in financial ruin for many, mental health breakdowns, marital breakdowns and at least one widely reported death by suicide.

Some problems obviously need to be addressed for the sake of our children and future generations.  I believe that this is one such problem.

I repeat my earlier question, do you know anyone in RTE or the print media? I have immense admiration and respect for the investigative Reporters in RTE and print media and we all owe them a debt of gratitude (Veronica Guerin RIP).

I'm afraid that I believe in "the power of the press" far more than I do in the slow, expensive, fallible legal system.


----------



## peemac (16 Feb 2017)

OMC FIX said:


> That said, the problem with OMC is that the OMC own the common areas and freeholds and absolutely must attend to maintaining the "fabric" of the buildings and must be "fit for purpose". But since OMC are relatively new to Ireland it seems that there is a certain National nonchalance attendant on their governance.



In many holiday home developments the OMC only owns the common areas and are not responsible for the houses themselves.


Also in my post above i said its a thankless task - I wasn't throwing roses at myself, more that its not a task most people would take on (I would never take it on again) because of the work involved, the in-fighting, the non-payment of fees and far too many people not understanding what an omc is or realising that they have signed a document agreeing to be a member. - And that was a OMC of 8 members!!! 

Similarly, some people become directors and then treat it as if its their own fiefdom to enrich/favour themselves as seems to be the case here.

I'm just a lay person, but there'd be a couple of changes I'd propose to OMC operations as generally the leagl profession assume people know what they are agreeing to whereas the reality is many simply don't.

1 - A sinking fund of a fixed amount per property should be set up from the start at the purchase stage. Example purchase price €100k + sinking fund contribution €7500 bring overall inital purcahse price to €107500. This would ensure the sinking fund is properly funded from day 1  and ongoing maintenance costs / management fee would be far more reasonable. The fund would then be managed by the independent accountants / legal practice as in next point..

2 - Professional OMC management company that is reguistered and part of an accountants / legal practice would be in charge of overseeing expenditure, issuing invoices and providing timely accounts for a fixed maximum fee.   

3 - One vote per registered owner, even if that owner has multiple properties.

4 - The OMC document / agreement to be separated from the sale documents as a specific standalone agreement with all relevant details of what is, what is not covered by the charge, so that all purchasers know and understand fully the obligations of being part of the OMC. - Currently its a few paragraphs in the overall legal documents which purchasers rarely read.


----------



## T McGibney (16 Feb 2017)

OP,

Your liberal use of bold type makes your posts extremely difficult to read, as does your use of shouted capitals. You'd probably get more responses if you adhere to the normal posting conventions on this site.


----------



## OMC FIX (16 Feb 2017)

PEEMAC thanks for your comments.

Yes, the "fabric of the buildings" is obviously limited to apartment type buildings and yes, maintaining the "fabric" of stand alone properties is obviously the repsonsibility of the individual Owners and yes, in those cases the OMC is responsible only for the maintenance of the "common areas" and "some defined common area services".

Sorry for any ambiguity.

Yes, I agree, there is need for a lot of changes in the governance of OMC, but I don't think it would be reasonable or possible to cover everything in this forum.  I would however hope that some of the abuses already identified could be addressed as a matter of urgency.

Yes, I too was a volunteer Director, and yes, it was a thankless job and yes, Long John Silver was already on deck when I unwittingly joined the crew.  

Yes too to counter-propaganda and half-truths, anything that could be done to undermine the character and integrity of those that dissented was done. 

No, I am afraid that Accountants are not the solution.  Their roles are defined by their codes of practice and legislation. I have seen Auditors changed when they dared to question items of expenditure and ask for vouched receipts.


----------



## PeeBee (16 Feb 2017)

T McGibney said:


> OP,
> 
> Your liberal use of bold type makes your posts extremely difficult to read, as does your use of shouted capitals. You'd probably get more responses if you adhere to the normal posting conventions on this site.



Meaculpa, mea culpa, mea maxima culpa!


----------



## PeeBee (16 Feb 2017)

Thanks to 'OMC FIX' and 'peemac' for your thoughts.

Kindly,
PeeBee.

nosce te ipsum


----------



## peemac (16 Feb 2017)

OMC FIX said:


> No, I am afraid that Accountants are not the solution.  Their roles are defined by their codes of practice and legislation. I have seen Auditors changed when they dared to question items of expenditure and ask for vouched receipts.


 
I'd be suggesting something along the lines of a professional firm under the legal responsibilites of accountants / auditors be the actual managers of an OMC from the outset (lets call them OMC Management Managers)  and representatives of the owners could be added and a 2/3rds majority needed to change to a different OMC Management Manager.

You'd then have firms set up specifically to operate OMC on behalf of owners but with a professional set-up


----------



## jdwex (16 Feb 2017)

I wouldn't agree with that at all. You'd have an even greater remove between the OMC and the owners of the individual units. And then you'd throw in a Managing Agent into the mix.
If directors aren't carrying out their duties you can report to the ODCE, or seek remdey in the Circuit Court


----------



## PeeBee (16 Feb 2017)

IMHO, The Managing Agents should never be allowed to become an OMC. The conflicts of interest are so obvious that it surprises me that the law currently permits this open opportunity for abuse of fiduciary trust. Members are often unaware of the dangers of allowing rogue Managing Agents to hijack the OMC for personal gain. 

How many of us have asked for and inspected the 'Letter of Engagement' beteen the OMC and the Managing Agency?


----------



## OMC FIX (16 Feb 2017)

I think it may be time for some further clarity ...

The only OMC is the Owners' Management Company in which the Owner(s) of each unit whether apartment or stand alone property has one share.  

I don't understand how the Managing Agent could be confused with the OMC.  

The Management Agent is supposed to be a Professional, Licenced, "Property Services Provider" (PSP) .  The relevant licences are issued by the Property Services Regulatory Authority (PSRA) and the list of Licencees is available from their website on an MS EXCEL document. 

I believe what has happened, and should never have happened, was that the Directors of OMC ceded control of the OMC to Managing Agents and to make matters worse, some Managing Agents do not hold the relevant PSP licence(s).  

I also have first hand experience of overbearing, dictatorial Directors in OMC who are making a dog's dinner of the job.  Some, probably a lot of them, are charging the OMC as if they were Licenced Professional, un-connected, Managing Agents.  

I believe that what is needed is better management, more accountable management, more Professional Management which can only come from more Shareholder involvement.  There is already plenty legislation, plenty handbooks, and there are already plenty Regulators.


----------



## jdwex (16 Feb 2017)

PeeBee said:


> IMHO, The Managing Agents should never be allowed to become an OMC.



I never said anything about a managing agent "becoming" an omc. They are separate entities.

It's quite difficult to follow exactly what has happened going back to the original post.
In summary, the Managing agents for the OMC  and the letting agents for a large number of units are the same entity, and individuals from this agency have been appointed directors of the OMC and are running it for the benefit of owners who rent out the houses as holiday homes. Is that it?


----------



## OMC FIX (16 Feb 2017)

Well done jdwex, I think you hit the nail on the head.

I understand that aggrieved shareholders have considered applications to the Courts and complaints to Revenue and PSRA and ODCE but I believe that the media may the most effective route to a resolution.


----------



## PeeBee (16 Feb 2017)

Hi 'jdwex',

Thanks for your input. 

In essence, the managing agents have 'hijacked' the omc! The two [only] directors of the Managing Agents are the only two directors of the OMC. And no, they do not run the OMC for the sole benefit of the holiday homes; they run the OMC for primarily for their personal gain. They ignore the legal requirements and act with impunity. They can use the cover of law when it suits their nefarious purposes while ignoring the niceties of providing the documentation specified by the Companies Act, the MUD act, the Registration of Managing Agents Property Act(?) and their contracted obligations.



jdwex said:


> I never said anything about a managing agent "becoming" an omc. They are separate entities.



 De jure they are supposed to be separate entities; de facto, as explained above, they are simply the two sides of the same coin in this nightmarish case.

Obliged,
PeeBee.


----------



## jdwex (17 Feb 2017)

PeeBee said:


> The two [only] directors of the Managing Agents are the only two directors of the OMC.


And are they directors/employees of the "letting agency" for the holiday homes, not occupied by owner-occupiers?


----------



## PeeBee (17 Feb 2017)

Hi 'jdwex',

there are two directors of the OMC and the same two 'gentlemen' are directors of the Managing Agents for the OMC. However, the main business .carried on by the Managing Agents is the letting of holiday homes in the development. They are trying to have the non holiday home owners pay for the upkeep of the holiday homes. Does this clarify your question?


----------

