# Splitting a Management Company in estate of detached houses and apartments



## trustno1 (13 Aug 2012)

Hi All.

I am living in an estate of detached houses and apartments.  The houses (where I live) are in one section of the development with the apartments in another.  We have one Management Company covering both with 2 separate budgets - one for the houses and one for the apartments.  The fees paid to the management company for the houses are in my view excessive (€500) given that there is very little to maintain.  While I am paying begrudgingly I don't like the prospect of having to pay both a management company and the council (via the household charge).  To my mind, grass cutting, road lighting etc are things which we will end up paying for twice once the household charge is up and running.  Given that, I called the council to query having the estate taken in charge and was advised that the council would only ever take the houses in charge and to this end, residents should set about splitting the management company in two, one for houses and the other for apartments.  It was suggested that the communal green area which lies between the different developments should stay with the housing management company (the green area is the size of a football pitch approx).

To complicate matters - developer is still allegedly on site having completed 3 of 4 phases (the development is now in the hands of NAMA) and the common areas are still owned by him (the residents pay for the maintenance of these as developer is bust).  There is no sign of Phase 4 being built on in the current market and the land concerned is behind a hoarding.

My question is - has anybody ever tried to split a management company in two and how did you go about it.  What was your experience of trying to get the council to take the houses in charge?


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## lantus (13 Aug 2012)

ok, firstly, shocking advice from council but will get to that later.

When you purchased your property you signed a contract that made you a shareholder of the company and agreeing to all the leases and covenants that come with it. All properties are the same in any one estate. To split a company into two sperate legal entities you would have to get EVERYONE to resign their contracts. The legal fee's would be astronomical and its probably not even feasable. You would need to take some very serious legal advice on this one. If even one person refused then it wouldn't be feasible as you cannot force them to do it.

In terms of service fee €500 for a house sounds atronomical without knowing what you are paying for. Under the MUD act the directors must furnish each owner with a detailed breakdown of the proposed annual fee and many other legal documents (fire certs for example.) prior to any AGM. At the AGM any budget must be approved by a majority vote (60% of those present and eligible to do so.) Typically houses pay for insurance, other admin costs and landscaping. The agents fee if there is one would be in addition to this. It depends on the number of houses but a few hundred would be typically more than enough (as grass areas are usually proportional to the overall estate size.) 

The household charge is just a tax (dont get sucked into the belief it will go towards local things.) Governments dont work to this level of accountability and anything they say it is for is just a marketing ploy.

Taking in charge for estates that are run by a managment company usually covers: - roads & paths, street lights, sewers and NOTHING ELSE!!! They dont take houses in charge and not apartments so who ever said that is wrong. They only take in charge infrastructure like roads and sewers.

Again when you signed your contracts it would of stipulated that grass cutting would be the responsibility of the OMC. The council will never come and cut your grass. EVER.

Taking in charge is a process that takes a great deal of time and needs people to really push it forward. We've been working for 4+ years and hopefully might get it before xmas!!! The developer needs to start it, then the council do an assessment with their engineers of all the infrastructure they will be respobsible for, then they haggle on the cost and using the *bond* that the developer lodged use the money to finish off anything required. Then the local authority takes over these things. Its a laborious process that they will never hurry unless you highlight in the local press and try to shame them into doing something (as we did.)

Many *bonds* were acceted as 'promisory notes' during the boom rather than cash so you need to find out what the situation is. If its a paper bond then its probably worthless as the onus is on the developer to keep up the insurance payments which if they gone bust is not happening. Makes things worse as the council wont do any work to make things right, they just take it over as is and hope for the best. There is no responsibility on them to do anything in this regard.

If the common areas are owned by the developer still then there may be a case you should not be paying for upkeep of these areas. Also, the lease document everyone signed may state that all costs are to be divided equally between each dwelling (house and apartment.) If the apartments have lifts or other expensive elements then the houses will be paying a fair share of this. However, it may be that they do not and the developer still owns a lot of unsold apartments and would rather not pay his fair share and instead rely on everyones ignorance to get the houses to pay more because no one questions it.

You must get your lease documents, read your companys articles of association available on CRO, read the ODCE guide to management companys and then the MUD act. Everything in there.


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## 22+allin (13 Aug 2012)

lantus said:


> ok, firstly, shocking advice from council but will get to that later.
> 
> When you purchased your property you signed a contract that made you a shareholder of the company and agreeing to all the leases and covenants that come with it. All properties are the same in any one estate. To split a company into two sperate legal entities you would have to get EVERYONE to resign their contracts. The legal fee's would be astronomical and its probably not even feasable. You would need to take some very serious legal advice on this one. If even one person refused then it wouldn't be feasible as you cannot force them to do it.
> 
> ...


CRO,ODCE,MUD,OCM What?


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## shesells (13 Aug 2012)

CRO = companies register office
ODCE = office of the director of corporate enforcement
MUD = multi-unit development bill
OCM = owners management company, the legal entity of all owners


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## lantus (13 Aug 2012)

shesells said:


> CRO = companies register office
> ODCE = office of the director of corporate enforcement
> MUD = multi-unit development bill
> OCM = owners management company, the legal entity of all owners


 
many thanks shesells! I use the terms so much I forget that others dont. Apologies to the OP for omitting this information.


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## 22+allin (13 Aug 2012)

TYVM = Thank You Very Much


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