# Company Law/ Management Company



## Thrifty1 (30 Jan 2007)

I will try to be a brief as possible with this query and would really appreciate any advice.

My husband owns an apt and is a member of a property management company. He paid a sum of money in Sept '04 when he purchased.

Early last summer he received an invoice for the next payment , which had increased by 72%.

We were unhappy with the service they were providing and made numerous calls requesting a meeting to resolve some issues.

We received a solicitors letter from them in July '06 stating they were taking legal proceeding to recover the money.

We contacted the solicitors and MC company again requesting a meeting.

Finally in Aug we met with the lady in charge, we told her we would pay the money on 2 conditions

1) we got copies of receipts for the services they were providing
2) Most importantly they held an AGM, at this stage they were a company for 2 years and had no AGM and no audited books of accounts.

We said we had no problem paying them but wanted an AGM first. I contacted the ODCE and he said they were in breach of company law by not holding one.

She agreed to this and agreed to contact the solicitors and stop proceeding and would be in touch in 2 weeks.

2 weeks later we called again and were told they were no longer the MC.

We contacted the new MC in Oct and explained who we were and that we owed money and were waiting on the AGM. Again they said this "was fair enough" and it would be held in a few weeks.

In Dec we called again and were told it would be at end of Dec, still no audit on accounts.

We called again at start of Jan and yesterday, still no idea when it will be held.

Anyway yesterday we received another letter from the solicitors stating that judgement papers had been lodged 5 days ago and we were liable for all costs of the action and they would have them published in the Sunday papers.

All along we have been upfront with the MC, we have done all the chasing, we didnt want a debt hanging over us but feel that we should be entitled to have an AGM held to discuss the situtation.

We dont know whether to just pay the money and let them away or try and fight it. The MC have no money because no one is paying (they tld us this).

As a gesture of good faith we had decided on Sunday to pay half but dont know what to do now.
I would really appreciate any advice, apologies for the length of the post (its still only half the story)


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## Thrifty1 (30 Jan 2007)

Sorry i just realised i dint clarify ,we have been dealing with the management AGENTS who are acting on behalf of the management COMPANY.


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## oopsbuddy (30 Jan 2007)

It's a kind of complex one! Yes, the MC is, like any other company, obliged to hold an AGM each year, and to submit audited accounts to the members. It is the directors' responsibility to prepare accounts and to have them audited, and to convene the AGM and to notify the members. Who are the directors? Who are the auditors?  The directors' information can be obtained from the CRO for a few quid, but I would continue to press the ODCE for assistance and advice. I also know that Minister McDowell has promised to raise just such issues with the Company Law Review Group (I think that's the proper title) for possible reforms, because this type of company (normally a "public company"), with all the obligations and responsibilities that go with them, are in the opinion of many just not suitable for the type of activities that they undertake.


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## Thrifty1 (30 Jan 2007)

Thanks for that. The only problem with my taking it further with the ODCE is that should we be successful in agruing a breach of company law (which i was told was very possible) the MC may be struck off.

If this does happen then we may not be able to sell the apt until the MC is reinstated or another appointed.

The reason being that they "own" the common areas.

All we want is to have an AGM and then pay the money.


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## Vanilla (30 Jan 2007)

Two separate issues here:
1. You now have a judgement against you. You can either allow this to remain on your record ( it will appear if registered everytime you need a mortgage or loan on a credit check) or you can apply for a review of the default- which you have to do within 10 days of the date you were made aware of the decree. The District Court office will aid you in this if you don't want to employ a solicitor to do so.
2. In relation to the management company, if there are issues with the service of the agent, then use your husbands membership of the company- find out who the directors and secretary of the company are now ( companies office search) and call on them to have an AGM. AT the agm, all matters can be addressed, including putting your husband up for election as director if you think he can cope with the responsibility.


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## KalEl (30 Jan 2007)

This whole management company/management agent area is a minefield.
People often mix up the two...non-payment of fees to the management company, of which all owners are members, can result in loss of services (ESB etc) and even render your property worthless. I am involved in a similar dispute at the moment, and the advice I received was to look at the fees charged by the management agent and deduct that proportion from your service charge.
The problem with a lot of these complexes is the builders retain control of the management company ad infinitum.


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## Thrifty1 (30 Jan 2007)

The management agents were supposed to contact the MC with regard to when the AGM was to be held but i dont think they did.

My husband contacted the solicitors and they said that the MA hadnt signed an affidavit so therefore despite what the letter said they hadnt yet gone forward with any proceedings.

I will contact the DCO and see can they help.

The MC are the builders, the 2 builders are the directors.


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## KalEl (30 Jan 2007)

Thrifty1 said:


> The management agents were supposed to contact the MC with regard to when the AGM was to be held but i dont think they did.
> 
> My husband contacted the solicitors and they said that the MA hadnt signed an affidavit so therefore despite what the letter said they hadnt yet gone forward with any proceedings.
> 
> ...


 
The problem is the MC are not the builders...they're you, the other residents and the builders. The builders just control the majority of votes.
We've had all kinds of difficulties with non-filing of annual returns and the company being hit with massive fines. This area is an unregulated mess which in the main preys on younger people as investors tend to have little interest in the day to day running of such complexes.
They should though, because if the MC goes bust all apartments become unsaleable and worthless!


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## Thrifty1 (30 Jan 2007)

Yeah sorry i knew that i meant the builders are the directors, and are still the directors because we have never had an AGM, in the 2 1/2 years they have not filed annual returns either.

The sooner this area is regulated the better, i know there are loads of us in this situtation and its difficult to know what to do.

I dont want to end up with a judgement against me over this, we have had the money sitting in an account for about 8 months now its just the principle of it.


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## KalEl (30 Jan 2007)

Thrifty1 said:


> Yeah sorry i knew that i meant the builders are the directors, and are still the directors because we have never had an AGM, in the 2 1/2 years they have not filed annual returns either.
> 
> The sooner this area is regulated the better, i know there are loads of us in this situtation and its difficult to know what to do.
> 
> I dont want to end up with a judgement against me over this, we have had the money sitting in an account for about 8 months now its just the principle of it.


 
The chances are they have paid the fines for not filing the annual returns with your money. We successfully fought the builders and made the guy pay it out of his own funds. The whole thing is bizzarre...these guys should be disqualified by the Companies Office the way they carry on.
Yet if the company goes bust, it's the owners who suffer the most.


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## Thrifty1 (30 Jan 2007)

Exactly thats it if we successfully fight them and get them disqualified we will suffer by possible not being able to sell the apt.

The MA are as bad they made sure they got paid, and we found out from the new MA that the original one had been lying to us about what money was being spent on.

Come on the Law Reform Commission !


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## greenfield (30 Jan 2007)

I am not sure of the details but towards the end of last year a resident in west Dublin appealed and won his case on the issue of management fees on the basis (I think) that the builders had not handed over the common areas and had not produced proper audited accounts.   I am not sure whether that was the end of it but is would appear that it is possible to make a case in your circumstances - however for that you are into court cases, hiring lawyers etc.   In a past residence had a lot of similiar issues with the management company - I had to pay the fees (V reluctantly) in order to sell.   Definite political issue at the moment though so may be worth approaching someone who will be looking for your vote in the near future.


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## ubiquitous (30 Jan 2007)

It is time surely for a public campaign to reform company law on management companies. Put simply, the Company Law Enforcement Act 2001 introduced a severe penalty enforcement regime on "late filer" companies including compulsory strikeoffs and mandatory penalties of €3 per day + €100 for late returns.  

The purpose of this Act was to incentivise business companies to improve their filing rate. It has been successful in doing so, but companies limited by guarantee (including apartment management companies) have been caught in the crossfire. 

It is debatable why the 2001 were ever directed in the first instance at companies limited by guarantee - after all these are companies which have no share capital and therefore cannot be used as a vehicle to store or accumulate income or wealth. 

A simple amendment to the 2001 Act to exempt companies limited by guarantee from late filing fees or mandatory strikeoff (if necessary subject to terms & conditions) would greatly alleviate the plight of homeowners in apartment complexes all over the country. It is amazing that no politician or media commentator has yet grasped this.


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## Thrifty1 (30 Jan 2007)

Thanks for all the replies , as it turned out both Management Agencies are looking for the same payment both saying we owe it to them !!

We have agreed to pay it to the new MA, its just too much hassle. I would love to have the time and effort to fight them but i think the risk of having a judgement against us is too serious.


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## avantarklu (30 Jan 2007)

Please don't give in. 
First off, you do NOT owe either MA any money – any “alleged” debt is owed to the MC.  If the 1st MA has been replaced, then they no longer have a mandate to collect fees from residents. Their services are no longer required. Write to them and tell them to stop harassing you. Copy this letter to the solicitor. 
Next, write to the current MA (again) requesting a detailed (line-by-line) breakdown of how the fee has been calculated.  This is what won the case referred to above because the resident requested this, was not provided it and the judge ruled in favour of the resident – he was entitled to this breakdown. Copy this letter to the solicitor. If you are being threatened with a judgement for non-payment of a debt, they will need to prove that the debt was incurred (i.e. service or services were provided). If they cannot provide a breakdown of the fee, they cannot prove that the debt has been incurred. 
Write to the solicitor and request copies of all documents which the solicitor alleges have been lodged in connection with the claim.
Now, from a Company law perspective, you are right to be concerned about the implications of strike off. However, it's not the end of the world but can be reasonably costly to have the Company relisted (I believe in the region of 5-10k). In the meantime, there is provision in Company Law for a number of shareholders\members (residents) to convene an extraordinary general meeting. Changes to the Company personnel (directors \ secretary) can be made and you can take control. There are specific requirements in terms of notice of such meetings and rules regarding the removal of directors (they have a right to be heard. However, it will force the current directors to deal with the matter.  You can make a complaint to the ODCE regarding the non-performance by the current directors of their duties (accounts, agm etc) with a view to having them disqualified personally from holding directorships. This does not affect the status of the MC. 
Please do not give up. I am living under the shadow of a MC, controlled by one of the biggest builders in the country. I could be wrong but I believe that the awkward questions I have asked in the last couple of months and legitimate demands I have made have, to some extent, resulted in the builder taking steps to have the estate handed over to the local council.


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## afitz (30 Jan 2007)

Hi, it would be great if everybody who has problems with management companies/managing agents etc would log on to consumerconnect.ie and tell us their stories.  There are a lot of legal problems around this area which the Law Reform Commission and ODCE are looking at.  We in the National Consumer Agency believe that there are also a lot of things which can be done without legislation and we are setting up a forum/working group to try and get solutions for consumers where possible.  We also intend to feed consumers' views into Law Reform Commission and the ODCE.  But...........we need your help.


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## bond-007 (30 Jan 2007)

Very few struck off companies are ever restored. The Directors are rarely prosecuted in these cases and are free to start over with a new company. That is what's wrong with company law in Ireland.


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## ClubMan (30 Jan 2007)

I thought that directors of struck off companies were barred from acting as directors again for something like 5 years under the _CRO _rules introduced over recent years? Or maybe this doesn't happen automatically?


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## bond-007 (31 Jan 2007)

No, they have to be disqualified by a high court order. 

The CRO can be well aware of their previous exploits but are powerless to stop them unless the ODCE take them to court.


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## Thrifty1 (31 Jan 2007)

avantarklu, i will write to the solicitors today, like you advised. We requested a copy of a breakdown of the debt about 8 months ago from the first MA.

We received a general breakdown (a word doc) , ie lift maintenance, esb, sinking fund, their fees, etc. it had a total and the percentage we were liable for.

We aksed for receipts or the accounts but they havent provided us with them.They were not able to furnish us with proof that they had incurred these expenses.

The guy in the new MA doesnt know whats going to, we had to tell him the accounts hadnt been audited and no AGM was ever held !

We have requested that he contact the directors with regard to when the AGM will be held.

He also informed us that the fee has jumped from €800 ('05)- €1300 ('07).


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## ubiquitous (31 Jan 2007)

ClubMan said:


> I thought that directors of struck off companies were barred from acting as directors again for something like 5 years under the _CRO _rules introduced over recent years? Or maybe this doesn't happen automatically?



Being a director of a struck-off company would not normally be sufficient grounds on its own to warrant disqualification proceedings. Otherwise tens of thousands of people would by now have been disqualified. The most typical disqualification cases are those where creditors have been left high & dry, notably the Revenue or where the ODCE has become aware of other illegal activity, eg illegal directors loans etc


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## avantarklu (31 Jan 2007)

Thrifty, good luck and plesae keep us informed of your progress.

The National Consumer Agency published a report last October entitled “Management Fees & Service Charges Levied on Owners of Properties in Multi-unit dwellings”. It’s a lengthy report (104 pages!) but worth a read.

The key to dealing with this issue imho is to read and understand the Management Agreement you signed on purchase together with the Companies Articles & Memorandum of Association (Memorandum in particular). Once you are armed with this information, it is up to you to ensure that both documents are strictly adhered to. 

(Note: I will send you a PM with additional information too lenghty to post here)


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## Thrifty1 (31 Jan 2007)

Thanks, any information you can give me will be very much appreciated. Ill have a look for that report as well.


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## ri_ra (17 Feb 2007)

We (a no of residents) were unhappy with our management company directors and the management agent - who was doing nothing.   A group of us were elected as the replacement directors.    We are doing our best to meet with the management agent - to get details of our current status - receipts, invoices, accounts etc.   He keeps avoiding all our calls.   What can we do to get him to hand over the 'accounts'.


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## Threadser (17 Feb 2007)

The best politician to contact regarding help for issues relating to Management Companies and agents is Joe Higgins.  He has done fantastic work with many of the residents of managed estates in Dublin West and would be able to advise you of the best course of action in your particular case. (I have no political affiliations, but am just speaking from personal experience)


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