Collecting Management Company Fee arrears

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Dermot

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I own a property in a small mixed complex of apartments and houses. The apartments do not have an internal common area. There is lighting in the grounds where the apartments are built but no lights fitted in the area of the houses. Houses have their own bins. Apartments have a locked central rubbish area. The should be a block insurance on the Apartment block. The builder is burst and dead and he and his partner are still directors of the Management Co. Relatives/family may own houses and apartments in the complex. There has never been a management company meeting or accounts made available in over 5 years. Some of the development remains unfinished. The remaining director refuses to engage in anyway with owners or the company's accountant. There are almost €1500.00 of fines already accrued with the CRO. Management fees are not being paid at this stage by a lot of the owners. I am just giving a background to some of the problems. I am trying to get a few people together to deal with all of the matters and not many are interested. There are a lot of questions I do not have the answer to but I would appreciate if readers could focus on giving me an effective but legal way of how new directors can collect the arrears and future payments. Thanking you for your time
 
Sounds like you need to call an EGM to replace the builders as directors ASAP - and then to come up with a strategy to deal with the problems.

Collection of arrears should start with invoicing, followed by a solicitors letter. You can then either follow the legal route and follow up for breach of lease conditions - the alternative is to bring in debt collection agents. There are costs associated with both routes but certainly if you go the legal route, you can be awarded some level of costs.
 
Thank you shesells for your reply. I am currently exploring all the options open to us and the calling of an EGM is on my agenda. All of what you said has been considered by me. Sadly I am on my own at the moment. A lot of the responses so far have been along the lines that "something will have to be done" but no offer to get involved. A response that I got yesterday from a owner in relation was that the management co that they had read in some paper where a management co had sued for their fees and the court had stated that this could not be done. I had thought that this could be done. If there anyone reading this that has a good knowledge or experience on this matter would the please help me out on this. I have a lot of checking to do at my own personal experience such as downloading the tax returns that have been submitted to the CRO. Getting the names and addresses of the registered owners of each property. Trying to find out who has paid in the past 6 years and for how many years. How much was spent on waste disposal, electricity and if insurance was paid and how much and what the directors took for themselves. The estate has to be finished as well and this will need at least a contribution of at least €3000.00 per unit on top of the management fees and this is going to cause immense problems for the new directors.
 
Thanks Alexandria for making the effort to get this for me. I was given to understand by one occupant in my area that there was a more recent case involving a high profile individual who had won a case about non payment of management fees. I do not want to pay the management fees any more than anyone else but I feel in the estate that I am involved with that some one has to get things done and also get the estate finished. It is one of the conditions in the planning permission that the council will take over the estate but it needs to be finished first. It is my my experience that even where it is finished the council take a long number of years to take it over. This is also the reason why the management co. needs to be in place. It is also unfair that some people feel that the can opt out of payment and leave it to others without some penalty.
 
Good advice...

I would advise a number of options - No. 1 - I would advise you to attend the Apartment Owners Network (AON) (google it). It is excellent for apartment owners information and meets on the second Thursday of every month. The AON is made up of a group of apartment owners who meet to discuss experiences and issues and propose solutions. I have travelled from Monaghan on numerous occasions to attend the meetings and find them very helpful. No. 2 - I would also advise you to ask around your local area to establish if a good management agent exists in the area. They are hard to find but a good one could be very useful. You may get a "professional" agent to work for free for a period until such times as the major issues have been addressed. No. 3 - The Local Authority should also have a bond for the development which may be available to complete the outstanding works. No. 4 - We (development in Monaghan) had many issues regarding our development and the establishment of the Owners Management Company. We were fortunate in that we had a decent developer who worked with us to resolve a lot of the issues. He brought in a guy who he worked with previously to advise us on the major issues. I wont post his name here as he may not be willing to do the same again but I will contact him to see if he is still providing advice to residents of multi unit developments. He knew the legislation (Companies Act and MUD Act inside out in the area).
 
Thank you for reply AA+. I will take on board all of your comments. In the situation that I am in the development co. is burst, the builder is now deceased. The directors of the Development co and the Management Co. are one and the same. No management co meetings have ever been held (just over 5 years). No accounts have ever been circulated. No accounts for years 2010 0r 2011 have been filed with CRO. Revenue penalties have already been incurred. Spouse of deceased is the other director. She will not communicate with anybody which includes Solicitors, Accountants, or owners etc. There is a part of the estate unfinished, highly unlikely that any insurance is being paid even on the apartment blocks, a lot of management co fees remain unpaid. I would estimate that maybe 20% have been paid over the past 5 years. The management co fees that have been paid would appear to have disappeared. The current director will not communicate with the accountant whom they had employed to do the accounts. When I spoke to the accountant recently he said that there was no money showing as having been received in Management fees. There is also a huge degree of apathy amongst the property owners.
 
The biggest issue first and foremost is apathy amongst owners. You really need to galvanise as many (ideally all) the owners through a meeting(s) organised by you as to why you believe the OMC should be up and running. You will need to prepare you meeting, leaflet drop and run a structured quick intro into why people want the OMC to be taken over and the consequences if they dont.

The articles of association which should be on the CRO will explain the procedures and how many people you need at meeting to make legally binding decisions (called a quoram.) like an EGM.

Collecting fee's for any owner will be daunting which is a big reason why people dont like the idea of being directors. (Would you send in debt collectors or take to court your neighbours for non payment?)

If the estate is unfinished the money for this may be held by the local authority called a bond. This is either a cash bond OR a paper bond. If it's the latter you could be in trouble as its basically an insurance policy and the builder is responsible for the upkeep of payments. You will need to apply consistent pressure to your local coco to get the required info. Check the planning docs (which should be available to view) as to what was stipulated. We currently have an issue in that the planning conditions stipulted cash but a sly official in the system accepted paper which is now worthless. The media are slowing circling this culprit and hopefully we will go public soon.


You can become a director by holding an EGM and appointing yourselves (the ODCE have good info on their site about this.) as directors and removing the old ones as a result.

Get directors insurance if you do.

One consequence of no insurance for apartment owners is obviously that they are at huge risk if anything goes wrong. fire, flooding, rain, roof damage (it may be jointly owned.) and a whole host of other things which could reduce their property values to zero. No insurance invalidates most mortgage contract requirements so the bank wont be happy. They could end up losing the property without replacement and still have to carry the full debt for life and be taken to court and sued for lying to the bank or mortgage provider or failing to disclose this information.

It takes time to get the community organised. No one is going to throw themselves into a situation where they have to willingly pay money.
 
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