# What to do when directors don't reply



## R3alEstate (25 Nov 2018)

Hi,

I wanted to ask if there is an entity that a member of an OMC can refer to when the directors don't do their job and there are problems like bad owners who don't pay, services not provided or other issues of any kind.

Thanks

Katrina


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## Zenith63 (25 Nov 2018)

The OMC is ‘owned’ by you the members, and you the members appoint your Directors to run the company. Worth keeping this firmly in-mind; it is your company, it answers to you but you are also responsible for it.

An AGM must take place each year at which you should get to vote on new Directors.  If the Directors are genuinely not contactable, you would (broadly) get the required number of paid-up members together and schedule an EGM at which you would vote out the existing Directors and yours in. The process is usually covered in the constitution of the company which is available to you from the CRO. You could do it yourself, but a solicitor would be useful.  If another route is open to you, like getting the old Directors to respond, it would be much easier and cheaper!!


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## R3alEstate (25 Nov 2018)

good to know thanks


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## Palerider (25 Nov 2018)

There really is no one to complain to, in theory you could complain to the Director of Corporate Enforcement or the Companies Office but in reality it would get you nowhere.

Attend the next AGM or EGM, contact the managing agent for a timeline on this meeting, put yourself forward as a Director, have somebody there to second your nomination, Directors can only stand I believe for 3 years ( ? ) before resigning and putting themselves forward for reelection, if any of the rubbish Directors do resign and put themselves forward then object and vote against it.

Not easy being a Director, I was that soldier, I would not take it onboard again unless most owners had an interest in the property, good luck to you.


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## Threadser (25 Nov 2018)

Is there a managing agent in place? Most developments appoint an agent to work on behalf of Directors who manages communication on their behalf. I am a voluntary Director of an OMC. On the advice of our company solicitor we don't answer emails from residents but pay the agent to do so on our behalf.


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## R3alEstate (26 Nov 2018)

That's good to know. Are the agents bound to answer or they can also ignore you?

Thanks,

Katrina


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## Zenith63 (26 Nov 2018)

R3alEstate said:


> That's good to know. Are the agents bound to answer or they can also ignore you?


The agent is basically just a private maintenance company, and are appointed by you the members to do much of the work of running the company for you.  They should be courteous in responding to you, but just keep in-mind they will be charging the OMC a fee to do their work on the basis that they don’t have to interact with each and every member individually. So in my experience they will respond to one or two questions, but if it goes much beyond that they’ll probably refer you to the Directors.


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## R3alEstate (26 Nov 2018)

OK, now I'm confused 

Threadser said that Directors don't answer questions but rely on agents while you seem to think the opposite.

If I could afford an house I would run away from the apartment idea at this point, unfortunately I can't :/


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## Zenith63 (26 Nov 2018)

R3alEstate said:


> OK, now I'm confused
> 
> Threadser said that Directors don't answer questions but rely on agents while you seem to think the opposite.


There aren’t any rules for all this really, so it completely depends on the agent and Directors, how many problematic members they’ve encountered etc.

In the case of the OMC I’m a Director of, there are some difficult members who deliberately ask a lot of questions. If it gets too much for the Agent, they’ll ask the Directors to contact the member and explain to them that the Agent cannot be expected to answer lots of questions for the fee they’re receiving.

If the Directors are not responding to you, try the Agent and see what they say. If you can do a call where they might give you the lowdown that would be best, they may say the Directors are useless and encourage you to replace them for example. But just keep in-mind they’re just a private company that you’re paying, so there’s limits to their obligations.


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## R3alEstate (26 Nov 2018)

Ok thanks for the useful information


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## R3alEstate (26 Nov 2018)

Hi, I've found online the documents for an MC that manages an estate I could be interested in. 

On one of them there is a balance sheet that reports:

Current assets 138,419
Creditors: amounts falling due within one year (84,194)
Net current assets 54,225
Capital and reserves 54,225

what do you understand from that?

Thanks,

Katrina


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## Threadser (26 Nov 2018)

Just to clarify my comments regarding communication with residents. All volunteer Directors in my estate (150 units) work full time in other jobs. It isn't practical to spend the evenings responding to resident's queries so the day the day communication is the remit of the managing agent who is being paid to provide this service. At times  the agent will consult us on any queries that require our input and we will direct her how to respond. Our solicitor is an expert on Apartment Law and she has advised us to avoid responding in a personal capacity to any queries.  Regarding the figures above very often accounts are filed a year in arrears so you really need an update on the current figures. I would suggest finding out how much is currently in the sinking fund and how much outstanding debt there is. This will give you an up to date picture of the current financial health of the MC


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## Palerider (26 Nov 2018)

I'm not sure that anybody buying into a development will get accurate information, I certainly did not, after I bought I challenged the agent when It was disclosed there were 10k+ arrears on one unit undisclosed, he told me I was neither an owner or Director when I was making enquiries, all with a straight face, he also told me all units were current, Also false.

I accept I may have had the worst experience but it was a lesson for me that Im happy to share, thread carefully is the message for apartment buyers in this country and if you buy get involved in the OMC.


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## R3alEstate (26 Nov 2018)

I simply don't understand how this can happen, why it's not possible to force bad owners to pay?

That said I understand the figures are not up to date but assuming they are, is there someone that could explain me what they mean? I don't have a clue.

@Palerider, what did you do? Did you sell and bought an house or was the issue solved?

Thanks,

Katrina


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## Palerider (26 Nov 2018)

I came across a willing buyer and was delighted to sell the apartment, as a Director who was the only one of three Directors to care and contribute with all other owners being absentee well twas a relief let me tell ya.

 I will never buy another apartment and my children won't be let either, it is well worth getting control of your front door with zero uncontrollable management fees and not having to share the common areas, I would say save like mad and buy a house.


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## R3alEstate (27 Nov 2018)

that's good advice, if only I could, but I'll keep that in mind.

Thanks,

Katrina


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## elcato (27 Nov 2018)

R3alEstate said:


> Current assets 138,419
> Creditors: amounts falling due within one year (84,194)
> Net current assets 54,225
> Capital and reserves 54,225



It means they have 138,429 in the bank but have bills outstanding which are due of 84,194. The Net current assets is the second subtracted from the first. As the last figure is the same as current assets then it appears that they don't have a sinking fund as that should appear under capital reserves and funds and be added under the Capital and reserves heading I believe.

Note: I am not an accountant so instruct your solicitor to ask them.


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## R3alEstate (27 Nov 2018)

ok thanks, not having a sinking fund it seems like a big deal to me 

so if I got it right what they really have is 54,225 without a sinking fund.

I've also found the following: Notes to the abridged financial statements:
appropriations of profit and loss account

at start of the financial year 34,112
(loss)/profit for the financial year (6,104)
at the end of the financial year 28,008

what does that mean?

Too bad I was asking for more information to the agent but as you already said I was told that I can't ask because I'm not an owner.

It really doesn't make any sense, it seems a system thought to allow frauds!


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## Namdos (27 Nov 2018)

R3alEstate said:


> ok thanks, not having a sinking fund it seems like a big deal to me
> 
> so if I got it right what they really have is 54,225 without a sinking fund.
> 
> ...



No surprise if there is no sinking fund. Huge amount of OMCS reduced these to cut down the bills over the years or had credit control issues and did not allow for them and the ramifications of doing this are only coming to light now.


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## R3alEstate (27 Nov 2018)

can you explain me better what do you mean? Sorry if I ask silly questions...


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## Palerider (27 Nov 2018)

No sinking fund means repairs don't get done because there is no cash available to do them, annual charges are kept at a minimum and when some don't pay or are in arrears then the services in the building suffers, think electric gates not working, left broken, roof leaking etc, no sicking fund means that in the event of a repair costing say €20k to the roof and there are 20 units then all must pay the €1000 on top of their fees before the work gets started, if there are non payers or slow payers it could be the case that others pay more to stop that pesky roof leaking into their unit.

If you have no headache today then why buy one.


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## R3alEstate (27 Nov 2018)

ok thanks that sound awful


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## R3alEstate (27 Nov 2018)

after all these questions I wanted to explain better my position which is the same of many people in this Country: I can't keep paying rent, especially with this market, I feel like I'm burning money. I can't afford a house either so I'm left with the only option of apartments. It's just unbelievable how it works and the thing that I find absolutely incredible is that if there is a roof leak and no sinking fund then what? Before they can do something the apartment will rot? Also how is it even conceivable that if I wanted to fix it myself I'm not even allowed!!!

I have no words anymore and losing hope completely. I'm seriously thinking to go back to my Country because it's impossible to win here :/

Thanks again for your patience,

Katrina


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## RichInSpirit (27 Nov 2018)

Hi Katrina. I assume it's Dublin that you are working and living in.
There are cheaper houses elsewhere in Ireland and you could commute to Dublin.


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## R3alEstate (27 Nov 2018)

thanks for your suggestion but I work on shifts and it's not practical, I thought about it and of course yes I'm in Dublin and the level of madness I've seen here I've never seen anywhere else


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## Namdos (28 Nov 2018)

R3alEstate said:


> can you explain me better what do you mean? Sorry if I ask silly questions...



The MUd act came in 2011 when economy was in bits. A huge amount of owners took over the running of their blocks and a huge amount of new entrants came into the market as management agents. A lot of directors  are responsible people but unfortunately some are not and the consequences of this are disastrous.

As the sinking fund is a rainy day fund and not used the year its collected. As such a lot irresponsible omc directors , aided by cowboy agents trying to get in as a new agent would reduce this sum to give all the owners a gimme service charge budget for a few years. Some of them might have just meant well trying to reduce the bill when times were tough. Owners by and large don't care so long as the annual fee goes down.

With sinking fund reduced the overall service charge could go down and the new directors and their mate the new agent would be heroes of the development for  few years while everyone enjoyed 1/3 or 1/4 less of a service charge bill and got loads of claps at the agm and a few pints bought for them in the local after.

Then the roof fails or the lift falls down the shaft and all the money that should have been put aside to deal with it hasn't and everyone has to pony up for a levy of a few thousand within a short notice and a lot of angry residents( who previously would have not minded the "gimme" budgets of the last decade)

The old directors sheepishly step down/are voted out, agent resigns or is fired and heads for the hills and a new set of volunteers directors and an agent spend a few years trying to clean up the mess and get the place back up and running again.


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## elcato (28 Nov 2018)

Your are over worrying about this. there are plenty of well run management companies in Ireland. In the statement you  have it appear that they have a surplus cash of 54k. This may well be how to interpret the sinking fund. Without seeing the exact statement it appears that yearly costs for the complex were porjected to be 28k but actually were 34k which meant they 'lost' 6k. It appears that the fees collected were for the 28k figure but due to some extras it cost an extra 6k. Not an unusual occurrence and as I said if they have funds of 54k then they have a fund to play with. All apartments in Ireland have these and just because there are a few scaremongers which vent their anger here doesn't mean that the vast majority are run well.
Conversely, if you have your own house, how much do you think it would take to maintain it annually ? If the roof even in a small cottage needs changing, you will need 20k minimum to get it sorted. How much for insurance, bins, hall stairs and landing maintenance, common areas, electricity ?


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## Namdos (28 Nov 2018)

elcato said:


> Your are over worrying about this. there are plenty of well run management companies in Ireland. In the statement you  have it appear that they have a surplus cash of 54k. This may well be how to interpret the sinking fund. Without seeing the exact statement it appears that yearly costs for the complex were porjected to be 28k but actually were 34k which meant they 'lost' 6k. It appears that the fees collected were for the 28k figure but due to some extras it cost an extra 6k. Not an unusual occurrence and as I said if they have funds of 54k then they have a fund to play with. All apartments in Ireland have these and just because there are a few scaremongers which vent their anger here doesn't mean that the vast majority are run well.
> Conversely, if you have your own house, how much do you think it would take to maintain it annually ? If the roof even in a small cottage needs changing, you will need 20k minimum to get it sorted. How much for insurance, bins, hall stairs and landing maintenance, common areas, electricity ?



Agree. most blocks are well run but the bad eggs are very rotton. 

Most of the venting here down to people not paying service charges or in arrears, not understanding where the money goes and having no idea on how much under the hood work goes on in running a large complex. Its quite clear from a lot of the ranty threads that none of the posters in question have every gone to an AGM.

And don't get me started on the "Im not going to pay my service charge until I am happy and we should all boycott" crowd


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## R3alEstate (28 Nov 2018)

thanks guys really appreciate your help. It's given me some courage to go ahead. 

Thanks also for explaining me those figures.

If I didn't get it wrong then it seems that the possibility of a roof leaking not being repaired is just theoretic and the OMC has to fix it no matter what. If there is a sinking fund better otherwise the owners have to pay with a short notice but it's not the case that I would be left with the leak and not being able to fix it

Thanks again!


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## jpd (28 Nov 2018)

elcato said:


> It means they have 138,429 in the bank but have bills outstanding which are due of 84,194. The Net current assets is the second subtracted from the first. As the last figure is the same as current assets then it appears that they don't have a sinking fund as that should appear under capital reserves and funds and be added under the Capital and reserves heading I believe.
> 
> Note: I am not an accountant so instruct your solicitor to ask them.



The 138,429 may not be all be a bank account - it could be made up of monies due (ie unpaid management fees) plus cash in the bank


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## R3alEstate (28 Nov 2018)

I understand really little of these things but I'd be surprised if they counted as money in something they actually don't have to be honest, but I could be wrong. I'm not a positive person I know but you seem really negative.

Is it legal to write down something like that if they don't really have the money in?


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## Threadser (28 Nov 2018)

I agree there are some unscrupulous agents and some unreliable owner Directors, but there are plenty of apartment complexes where the company is well run and maintenance is scheduled and planned in a cost effective manner. I live in such a development and we are not unique. If you do buy an apartment you need to realise that you are a member of the OMC and not just a critic. Many owners complain lots but do nothing themselves to get involved or resolve an unsatisfactory situation.


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## R3alEstate (28 Nov 2018)

Can you also explain me why it's a bad thing if the developer doesn't pass the property to the OMC and they are still a Director?

Thanks


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## Threadser (28 Nov 2018)

If the Developers are still directors then they may not be working in the best interest of the property owners. In our apt complex the Developers and our previous agent were very closely connected. We were being over charged significantly for all of our basic services, cleaning, gardening, insurance etc. Once we took control we were able to change managing agent and put all these contracts out to tender. As a result we were able to gain significant savings for the same level of service and reduce management fees significantly. When the Developers were acting as Directors we had no sinking fund. Five years later we have over €100,000 in this fund and plan to increase our contributions significantly in the coming years. This has taken a bit of time and effort but it has been worth it.


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## R3alEstate (28 Nov 2018)

but how did you manage to take control? Is there a way to force them out?


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## Threadser (28 Nov 2018)

The first step is to get volunteer owners on the Board of the OMC at the AGM. Under the MUD act the Developers have to hand over the estate to owners after a number of years. The sooner the handover process of the common areas of the estate is completed the better but make sure to get a good solicitor to act on your behalf.


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## elcato (29 Nov 2018)

Unless you are buying into a relatively new development or one that was distressed/incomplete in the recession years it is unlikely that the developer is still involved. Again your solicitor should be able to confirm this.


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## mtp (29 Nov 2018)

Katine I am a retired solicitor with experience of mud act personally and preofessionally.



S 18 of MUD Act regulates service charge. How they are set and what they are used for.

Under S18 7 of the MUD Act approval for service charges to defray cost of matter that are or were the responsiblity of the developer/builder 'have no effect' until three years after the common areas have been transferred to the management company.

If common areas transferred then man co can sue for recovery of service charges approved under S18 .

If not then approval by member of any s charge to pay cost that developer/builder liable for 'has no effect' ??

This may be why man co are not suing for arrears cos NONE IS OWED under MUD ACT.

If service charges are payable to the developer under the lease then developer is responsible for the obligation of the lessor under the lease until the common areas transferred. The service charges are  the assets of the DEVELOPER not MAN CO. until common areas are transferred

The management company is in debt to the developer? But who control the management company the voting powers? Under the articles of association u may find that the subscriber to the memorandum of association control the voting rights as nominees of the developer until the management company has acquired the interest of the developer in the development lands.


S18 does not apply to cost of one of repair jobs like leaking roofs to which building regulations apply .

This is covered  S19 on contributions to a sinking fund .

the invoice for service charge payment due should furnish two amounts

amount of service charge (cannot be approved by members if common areas not transferred under S18 7 )

AND

amount of contribution to the sinking fund which is not affected by S18.7.



I would look for accommodation and if it is in apartment block make sure common areas are transferred to the man co.   









.


Palerider said:


> I'm not sure that anybody buying into a development will get accurate information, I certainly did not, after I bought I challenged the agent when It was disclosed there were 10k+ arrears on one unit undisclosed, he told me I was neither an owner or Director when I was making enquiries, all with a straight face, he also told me all units were current, Also false.
> 
> I accept I may have had the worst experience but it was a lesson for me that Im happy to share, thread carefully is the message for apartment buyers in this country and if you buy get involved in the OMC.





R3alEstate said:


> Hi,
> 
> I wanted to ask if there is an entity that a member of an OMC can refer to when the directors don't do their job and there are problems like bad owners who don't pay, services not provided or other issues of any kind.
> 
> ...


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## Palerider (29 Nov 2018)

I think you missed a beat here MTP, in this case the OP is looking to buy an apartment and does not have an issue as a tenant renting her apartment....


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## R3alEstate (30 Nov 2018)

Yes Palerider is right MTP, I'm looking for an apartment and the one that I like is in an apartment block which has a situation difficult to understand (at least for me).

I've gone through your post (thanks for taking the time) but I'm not so technical to understand all of it. From what I was able to find out the developer is still a director in the MC, he didn't pass the common areas yet and this complex was finished around 10 years ago, but he's still there!

What I've understood from your post is that in this situation it's not possible to force owners to pay service charges until the MC owns the common areas.

At this point I'm really scared to buy because if I do and then there is something like a roof leak no one is going to pay and I'd find myself in the situation to not be able to repair myself, no place to stay and mortgage to pay 

Is there a way to force the developer to hand over the common areas? From my research it appears that the County Council is interested part in many of the apartments in the same block, why they don't do anything about it? 

I wanted to thank you all for all your help, I can't believe how useful this forum is!


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## elcato (30 Nov 2018)

R3alEstate said:


> Is there a way to force the developer to hand over the common areas? From my research it appears that the County Council is interested part in many of the apartments in the same block, why they don't do anything about it?


I would advise against buying here. Apart from the problem with the MC and developer, you are going to have council tenants living there who will have no impact on the running of the place even if some of them care. It's probably a good price for a reason.


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## Palerider (30 Nov 2018)

It is clear you like/want this apartment but you should not let your heart rule your head, this development is not yet under the complete control of the unit owners through the OMC, even if it was it does not mean that everything would be rosy, I've said it before find somewhere else.


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## R3alEstate (30 Nov 2018)

elcato said:


> I would advise against buying here. Apart from the problem with the MC and developer, you are going to have council tenants living there who will have no impact on the running of the place even if some of them care. It's probably a good price for a reason.



Could you explain me what does it means to have council tenants living there?

I thought the County Council would be responsible for paying the service charges?

Thanks


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## elcato (5 Dec 2018)

You said that the County Council have a few apartments in the block ? While they will pay the service charges due they will be housing tenants that have no interest in how the management of the complex is done. The council is a faceless organization who have no interest in profit and are not held accountable should any problems arise, Their tenants tend not to be, ahem, rigorously vetted either.


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## R3alEstate (8 Dec 2018)

Hi,
sorry for the late reply but these days I've been sick.

I understand that their tenants won't have any interest, that's more than clear, but I didn't know who had to pay so I was asking. At least if the County Council pays for those apartments those fees are safe!

Could you give me examples of which problems could arise for which they won't be responsible? You mean for problems caused by the tenants?

Sorry for being so pesky but I want to learn as much as possible about these things.

Thanks,

Katrina


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