# Query re appointment of Directors



## Radlands (23 Oct 2012)

I am a Director on a Management company which comprises of 200 residential units. There are two other Directors who are the original developers of the estate. I am the only Director who is a resident of the estate. 
We have had numerous problems in the estate and things have recently come to a head. I have grounds to suspect that there has been serious mis-appropriation of funds by the Managing Agent and though I have expressed these concerns (as has our auditor) the “developer” Directors refuse to engage in any meaningful discussion around the issue. This is the most pressing and serious issue at the moment but there have been many instances that I could cite to show how I am being deliberately being excluded from the decision making process etc. 
I have taken legal advice on the matter, and have been advised to convene an EGM in order to appoint additional resident Directors to the Board and therefore, essentially, gain control for the members. (I have been told by the current Directors that they will block any attempt to appoint new/extra Directors to the Board at a "normal" meeting of the Board). 
My question is whether there is a quicker, less messy way of getting these extra Directors appointed without convening an EGM? I am concerned as to the length of time it will take for this to be held given the seriousness of the situation with regard to finances and also the possibility of not enough members turning up for it to turn out in our favour. (The Developer still has a significant amount of units unsold/in their own names – 57 in total out of the 200).
All opinions welcome.


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## shesells (23 Oct 2012)

As the development isn't wholly sold, you are lucky to have even one non-developer director. Depending on your articles of association the only other way to appoint directors than an AGM/EGM would be for the existing directors to co-opt additional directors (this may not be permitted, it depends on your articles). In your case this might prove difficult if you are outnumbered on the board as it is. You could try pointing out to the other directors (in writing or documented at a meeting) that it is in the best interest of the development to have more owner directors, this may encourage them to consider your proposal or risk being guilty of neglect of duty.


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## Dermot (23 Oct 2012)

Are the Apartments that are not sold fully finished if so the developers should be paying the full Management fee for each apartment. Are the common areas handed over yet. Have you a copy of the booklet which is produced and is free from CRO. Have you a list of all the owners/members of the OMC. You are legally entitled to that.  You can purchase a copy of the Memorandum and Articles of Association for about €2.50 on the CRO site and this will tell you what type of company it is. There a quite a few nightmare management companies around particularly where developers are involved


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## lantus (24 Oct 2012)

best read the MUD act. The PSR may be able to advise as well.


If the developer has 57 properties then they have 57 votes which will a tough one to beat unless you rally the troops. I assume this is how an agent was brought in as it must be voted for at an AGM under the MUD act 2011 which came into being april. So they would of provided every member with detailed budgets and called for a vote to approve such an appointment. Failure to do so is unlawful.


They cannot block the appointment of another director if done correctly. To do so would be unlawful.


To be honest we need more info on when the estate was built and its condition. are they all houses or apartments? Houses should be paying almost nothing except PI and small company fee's and landscaping.

Apartment would have more like insurance and other upkeep elements. All areas should be detailed in a budget provided by the agent.

Are there large common areas like greens or is it just mud?

And yes they need to be paying the service charge on unsold units to the omc.


It sounds like they may be using the fee's to undertake construction work perhaps or is there a connection to the agent? a friend or family member?


If your reading any of the above wondering what articles of association are or where can I find the ODCE handbook or MUD act then they are running circles around you (dont be unduly insulted these people are experts at this and very good at it. I have had them argue that no such laws even exist and they can do what they like!)



Arm yourself with knowledge and read these documents inside and out, you will need to constantly refer to them and seek out advice. The apartment owners network is also a great resource. The ODCE is bit of a wet lettuce unless you can prove wrong doing and the psr is more specific now and could offer better advice


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## Radlands (24 Oct 2012)

Firstly, thanks for all the replies. 

I have read the articles of association and the MUD act is my friendly bedtime reading companion. I am aware of my entitlements and what SHOULD be happening and what I should be able to access, however, I am being thwarted at every opportunity. 

The complex comprises of 800 units, this is divided into 4 management companys - the company of which I am Director comprises of 200 units, a mix of apartments and houses, no commercial units. They have not handed over common areas, which I know they should have and this is being pursued by my solicitor.

The voting rights that they have are under some scrutiny at the moment by my solicitor as it turns out that if they have not registered the vacant units with the land registry they don't have any voting rights on them, this was something I had not heard of before, but apparently it is common practice until a unit is "sold" and while it is still in the developers company name. Even if this is the case, they are still liable for fees on those units under the MUD act - my problem is that I cannot get complete access to bank mandates, accounts and all the other vital information to be able to find out why we are in such bad shape financially. Crucially, I need to get control of the Board for the members for that to happen. 

I think the answer to my question is that an EGM will have to take place.

Thanks again.


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## purpeller (24 Oct 2012)

It does sound like an EGM is your best and quickest solution.  One thing to do: keep notes of every conversation, email, meeting, etc with the other directors.  You may need to build up a body of evidence to show they are negligent, and it certainly sounds like they are.

Best of luck - you're doing the right thing in taking it on and it will be worth it long term


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## lantus (25 Oct 2012)

It's simply awful that things like this continue to happen. So much for good laws solving our problems (which MHO they dont but thats another story!)

Contractors and developers are the most skilled and practised liars and manipulators I have ever come across from my time in the construction industry.

Check your articles as to what you need to get a legal meeting. 3 people, 50% or 75% in some cases.

I would possibly write to the existing directors outlining what you want and why or the consequences will be an EGM and the company will be forceably removed from them.

I'm not surprised that the finances are rotten, like the people running it they have neither the proper skill or ability to do it (the job required good character for a start!) and more likley as in our case use the OMC as a source of income for either themselves or agents who are friends and have been told that there iseasy money to be made.

Main issues are the titeldeeds for the common areas and control of the bank account. Maybe call the bank and discuss a stop on the account during the process or large withdrawals to prevent the residents being robbed blind.

Its interesting how there are 4 OMC's. Is there a clear boundary between all 4? In effect like 4 seperate estates or is anything shared between them?

Best of luck and please let us know how it goes.


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## Radlands (25 Oct 2012)

Just a quick update. I have informed my solicitor to start proceedings against them for not handing over common areas. 

I have also instructed my solicitor to get all the details together which I will need for an EGM to take over and remove them as Directors. 

To be honest, they have shown nothing but a blatent disregard for me and my input (despite my own profession being in a catagorey that would be beneficial to them with regard to expertise etc.) not to mention the incompetence and downright theft to which all of the members, including myself, have been subject to for far too long. 

If anyone has any idea as to how we would go about blocking the bank accounts, let me know!

With regard to the division of companys - I think it came about because they were set up as phases of the development were finished. 

I will let you know how the EGMs go.


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## lantus (29 Oct 2012)

cheers forthe update redlands, sounds like some interesting times ahead but it sounds like you've done everything you can and are taking a firmer approach.

Bank could be a very tricky issue. At the worst you will have to accept that they will empty it.

You may be better off starting a new account anyway.

I would approach the bank and explain the situation. Make sure to talk to someone higher up. Get some advice from your solicitor as well.


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## Dermot (29 Oct 2012)

Have you got a list of all the members of the OMC.  If you have you might need to encourage them to attend the EGM. You will need to set out all the problems and concerns to each member as you need to have people properly briefed when attending such a meeting and that they will see that it is worth their time attending meetings. There will probably be members who are a long distance away whom you need to convince that it will be worth their while coming to an EGM. I have had the experience also where it was members living in the development who were the biggest offenders when it came to attending meetings. APATHY is a scourge in your situation.  You have my sympathies and I wish you good luck.  Please keep us posted


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## shesells (29 Oct 2012)

Remember that only members who have paid their fees are entitled to vote.


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## 10amwalker (30 Oct 2012)

In relation to the votes the developer has or claims he has for the unsold units I would check your memo and articles to see if it states " each member has one vote " it would be my opinion that if such is the case a member can only be a member once and not several times hence would only have one vote. You could check this out with your solicitor.

I realise that you are trying your best and it is an uphill battle with you being the one "token " director and that the the other three OMC's also have one token Director on each. Would it be worthwhile you contacting the ODCE to complain that the directors are not acting on behalf of the membership by continuing to employ/engage current managing agent. 
I would also complain that the directors are not allowing other members of the company that wish to become directors from becoming directors.. your last AGM is testament to this and you could warn the Directors that you are going to call an EGM and that the ODCE are aware of the reason you are calling the EGM- to elect other Directors.

I have also heard that the ODCE can take what they term a " Whole " approach where they on receipt of a complaint about a particular Director can examine what other companies he is a Director and question if he is taking the approach complained of in your company is he fit to be a director and should his directorships in other companies be investigated.
It has had the effect of rattling the developer director's cage. 

I would also add to the letter of complaint that necessary financial information is being withheld from you as a director. You are not being provided with the bank statements or service charge account reports, two necessary components of managing an owners management company effectively. 

You could also mention that the other three OMC's with the same directors and the same MA in all four OMC's could be seen as operating a "cosy cartel" and that competition for services is being limited and is definitely not transparent.

Hope that helps.


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