Conflict of interest - Property management

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Thrifty1

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Hi, i attended our Property management company's AGM this week and a new board of directors was appointed.
My question is that one the the directors appointed is also the secretary(which i think is fine) and also the owner of the existing property management AGENT.

I thought nothing of it at the time, she was elected at the start of the meeting. It was the first time we met her and throughout the meeting it became apparant she is a very stubborn and argumentative lady.

Since i have been wondering is there a conflict of interest with her being a director of the management company and owner of the management agents.
My reason for describing her above was that im concerned that she may not be cooperative in a difficult situation, she didnt seem very professional.
There have been some complaints about the MA handling of issues and dissatisfaction in general with them but it was decided to let them continue for the time being (they have no contract at present), but if we do decide to change what will happen?

I hope i have made the situation clear.

Any advice is greatly appreciated.
 
There is a very definite conflict of interests there. How many directors are on the management company board? Who currently controls the management company? Has it been handed over by the developers, or do they still control it?
 
There are 4 directors on the board now, 3 owner occupiers and this lady who owns the management agents (she was also appointed secretary).

The builders were the directors but they resigned at the AGM and this new board was elected.

How do i go about resolving this, it all happened so fast at the AGM that i only realised afterwards that there could be a conflict.
 
Hopefully the other three directors will be able to provide a balance and override any bad decisions. At the very least, she should recuse herself from any vote regarding the management agency. I think your options are either to try and have an EGM called and have new directors appointed, or to leave it until the next AGM and hope that there are no serious issues between now and then. How were the directors proposed and elected?
 
Thanks Seagull. The board resigned and then it was announced that nominations would be taken. Three people put themselves forward and one person from the floor nominated this lady. The resigned director then asked did we all second this and a few people said yes.

Does she have any power as director that could be used to further her interest in the management agency? The board are supposed to be sending out tenders for work the management agent had previously just appointed themselves.
 
would suggest you check the management companys acticles of association ( obtainable via the CRO website) I would be surprised if the lady in question was elected as a "director" unless she owns a unit herself within the development. In most cases you need to to a shareholder in the management company to be eligiable as a director. However the Secretary does not have to be a member and it does not appear to be unusual for a rep from the management agent to hold that position so as to facilitate the day to day running of comapny business. If it is the case that the management agent owner also owns a unit - I that see that could cause a huge headache for futures dealings if already there is dissatisfaction with their performance to date. i
 
Hi Gemstone, she leases a unit in the complex and runs her estate agency and management agency from there so she is a member of the management company.

My concern is does she have any powers or influence that she could exploit to further her own interests, eg getting quotes for work, her own fees, etc.

It just feels wrong to me and especially coupled with the fact that her behaviour during the agm was unprofessional (she got into an argument with another lessee of a unit in the complex over her handling of complaints and other issues in her capacity as managing agent).

If she has power i would seek to get her removed, if not i would probably just let it slide and see how things go.
 
would suggest you check the management companys acticles of association ( obtainable via the CRO website) I would be surprised if the lady in question was elected as a "director" unless she owns a unit herself within the development. In most cases you need to to a shareholder in the management company to be eligiable as a director. However the Secretary does not have to be a member and it does not appear to be unusual for a rep from the management agent to hold that position so as to facilitate the day to day running of comapny business. If it is the case that the management agent owner also owns a unit - I that see that could cause a huge headache for futures dealings if already there is dissatisfaction with their performance to date. I would also check the secretary priviliges in terms of dealing with accounts - I would make sure that a second director signature is required for all withdrawals from the account except maybe for very small amounts if possible, or only allow withdrawal by cheque with second signature. Where the management agent who is also the secretary has free rein to remove money from the bank it makes it a very difficult stressful operation to remove the management agent in the future. The ideal situation is to have the secretary as a member of the management company rather than than the agent. Unfortuanately trying to get people to take on the responsibility of being a director or secretary can be very difficult.
 
Thrifty1 said:
Hi Gemstone, she leases a unit in the complex and runs her estate agency and management agency from there so she is a member of the management company.
Click to expand...
She's not a member if she's renting. It's only owners who are mebers of the management company.
 
I inadvertently managed to post whilst typing the original response!

In answer to the question : , well if she is eligible to be a director , I completely agree it is a conflict of interest as the management agent is meant to be accountable to the directors and if I was one of the other directors I would be very uncomfortable with the management agency owner being a fellow director and essentially holding the power to regulate her own actions. If at this stage there is already discord it will only get worse .I pity your other directors!
 
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