Holiday Homes v Private Interests and the MUD Act

The representatives of 30 properties in a development of 40 is not a contrived majority. The directors of a company are (unlike bus drivers) obliged to act in the interests of the majority. They absolutely must act within the law, notably they cannot oppress minority shareholders

Accounts must be lodged with the CRO. The information they must contain is outlined in law. Directors are not required to go further that the requirements, in general accounts only contain the bare minimum required by law. Group companies can prepare group accounts with minimal information in relation to individual companies within the group.

PeeBee's post no.20 above is very informative, but I cannot see that it offers much relief to the OP

I have attended AGM where the Chairman of the meeting waved a bunch of A4 and stated that he held proxies for say 24 shareholders. He may well have been waving 12 proxies and 12 blank sheets of A4 because he refused to allow quite a number of Shareholders to examine the papers he had displayed to the meeting or to list the Names of Shareholders whom he said had given him their proxies. Could that have been be a "contrived majority" ? Were the decisions reached subsequently lawful ?

Whatever about the position of the OP the moral of this story for others is stay away from management company situations. Another reason not to buy an apartment !

Hi 'cremeegg', I am the OP! I am the one who is accusing the OMC of assembling a 'contrived' majority and if you follow the thread you will see why Ii have put the accusation in inverted commas! OMC FIX's contribution at 22 above outlines a not dissimilar abuse of the law.

cremeegg said:

Directors are not required to go further that (sic) the requirements,

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.....[of the law one presumes]

'cremeegg', THE LAW DEMANDS FROM ALL LIMITED COMPANIES, amongst other things, the unambiguous availability to ALL SHAREHOLDERS the following

Members of Irish companies have the right to inspect and obtain copies of certain company information:

• Memorandum & Articles of Association or the Constitution
• Minutes of general meetings and resolutions
• Register of members, register of directors and the register of directors’ interests
• Unabridged financial statements, directors’ report and auditors’ reports, Bank account including the Sinking Fund account
  
• Unabridged financial statements of any subsidiary company for the preceding ten years

I have clearly pointed out that this OMC has failed to produce any of the above when asked, verbally, in writing and even by Registered Post.

Now, 'cremeegg', what would 'The man on the Clapham omnibus', or you dear 'cremeegg', do?

cremeegg said:

Whatever about the position of the OP the moral of this story for others is stay away from management company situations. Another reason not to buy an apartment !

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It is not an apartment! Read OP please!

Kindest,
PeeBee

Let us all face facts and be realistic.

Thousands of people already own apartments and hope to sell them at some stage. For those people, and for the thousands more that will, of economic necessity buy apartments in the future and / or live in apartments in the future the OMC must be fit for purpose because the OMC owns the common areas and freeholds for these apartment developments and for many other developments like small estates, where the local Authority has not taken the roads and services "in charge".

Simply suggesting that it is better to avoid such developments instead of putting up a fight to get the OMC in such developments to do what they were set up to do and are obliged by LEASE agreements and by LEGISLATION to do is not a solution.

Do not lose sight of the fundamental problem here, which is this, the OMC has no persona, it is the elected Directors who break the law(s) and it is these same Directors who appear to be creating so many problems for so many Shareholders in these OMC.

There also needs to be a change in the situation where you get all the documentation when purchasing a property that the common areas will be handed over to the owners and they can select people as Directors when a certain % of properties are sold.
There are several estates where this occurred and the developers went burst and what was left was semi worthless to the banks and the common areas not transferred to the OMC. The common areas in some cases have a difficult title to sort out and developers and banks have no interest in sorting it out or even co-operating with the residents. In some of these cases the properties are in negative equity and a lot of these people do not have the money to contribute to sorting it out. The management company does not strictly have an insurable interest in such situations. This type of thing has happened and will happen again.
There needs to be something put in place before building commences whereby the common areas are handed over with proper title and a sum lodged with an independent third party together with a cash sum to enable the common areas to be finished. There also needs to be another look taken at how representatives of the builder can be involved in an OMC.
The idea of bonds has not worked terribly well. I have seen too many situations where builders were able to get building and planning without having a bond as part of the conditions. In other cases it was so ridiculously low that the builder walked away without finishing.

Hi Dermot, I assume from your post that you, like me, are familiar with dysfunctional OMC (quite a majority of the OMC with which I am familiar are in fact dysfunctional).

As a result quite a considerable number of Shareholders are already trapped in terrible situations with OMC, and as you correctly pointed out, cannot afford the Professional fees to resolve their situation even if all Parties were agreeable and fully committed to resolving all OMC problems.

You are also correct when you say that when Banks and other Lenders appointed Receivers to wind-up some Developers' portfolios, those Professionals did not resolve the legal twilight in which they found relevant dysfunctional OMC. Instead, they sold en-masse at a considerable discount and left the mess for someone else to sort out.

So, if you are / were an Investor (like me) who was advised to buy into tax designated Multi Unit Developments (designed to promote "urban renewal" or to "promote tourism") or were advised to "invest" some of what would otherwise have gone into a private pension fund and (like me) you now find / have found yourself face-to-face with Long John Silver or Jesse James who, because of poor attendances at previous AGMs is / was the Chairman of a the Board on one / or more OMC and is / was running it in a (let's use the word) "Cavalier" fashion where (a) you lost and (b) he / she / they won and he / she / they have absolutely no intention of resigning his / her / their [clearly] untenable position ... what must one do ?

The answer, sadly, is either (a) cut and run (and leave the mess for the next poor hoor or (b) stand and fight.

As one of those that stood and fought, and fought and fought, I am now offering advise to those that must now stand and fight.

There is another less obvious aspect to this problem too and that is that many people "of a certain age" (because of Professionals' advices) bought and still own these apartments (and other MUD holdings) and many are unable to "stand and fight" sometimes because of their age and circumstances they can longer stand or fight ("hobble" maybe, but not stand). Many of those people of my acquaintance have in fact paid for professional advices and many have engaged Solicitors to write worthy letters pointing to the relevant law(s) that are being broken etc and, to my certain knowledge, most of those letters are ignored, unanswered (and probably unopened).

Ahhh, PEE BEE ... the famous "man on the Clapham omnibus". Good ol' Rumpole.

Has anyone challenged a rogue OMC in the CIRCUIT COURT?

It's 'Kafkaesque' when one considers that the directors can ride roughshod over the Members and the Law, using the Members' own funds to do so! I.E. at no personal financial exposure !!! Catch 22?

What were the legal draughtspeople thinking when they drew up such leaky legislation? IMHO, these highwaymen, the so-called directors, will only be stopped when they are held personally responsible for malfeasance and fraud!

Perhaps there is a hungry and ambitious lawyer reading this who would be willing to act 'pro bono'/or, on a 'no foal, no fee' basis [and perhaps earn a name for her/himself in the annals of legal history? This contributor is in possession of damning proofs [ACTUAL and NOT VEXATIOUS] of the misdoings of the OMC/Managing Agent referred in my original posting.

Because of the prohibitive costs involved, my partner must proceed with caution as a pyrrhic victory will be useless.

I HAVE EXPLAINED THAT THE OMC IS A 'POCKET COMPANY' OF THE MANAGING AGENTS - same directors. AS SUCH, IT HAS CONTRIVED TO CONTROL THE OMC WITH AN 'INBUILT MAJORITY' EXPLAINED BY ME IN THE O.P. THEREFORE,

HOW CAN THE OMC BE REMOVED OTHER THAN AT AN EGM/AGM?

And please, to save everyone time, do not reply if you simply want to re-iterate the AGM mantra. My partner has been harassed, and oppressed by these people. She is at her wits end and distraught by this matter. All constructive ideas will be welcomed.

Sincerely,
PeeBee

All constructive ideas will be welcomed.

STOP POSTING IN CAPITALS. ITS SHOUTING

It makes what might be quite interesting, nothing more than an irritating rant.

And no, " no hungry and ambitious lawyer reading this who would be willing to act 'pro bono'/or, on a 'no foal, no fee' basis [and perhaps earn a name for her/himself in the annals of legal history? " would act when they'd have to spend most of their time trying to comprehend what the issues are BECAUSE THEIR CLIENT KEEPS SHOUTING AT THEM .

Best advice - get a solicitor, pay them, deal with it, including, if necessary, going to the Circuit Court.

mf

mfi, Thank you for the welcome!

Very perspicacious of you 'dear boy/girl'

mf1 said:

All constructive ideas will be welcomed.

STOP POSTING IN CAPITALS. ITS SHOUTING

It makes what might be quite interesting, nothing more than an irritating rant.

And no, " no hungry and ambitious lawyer reading this who would be willing to act 'pro bono'/or, on a 'no foal, no fee' basis [and perhaps earn a name for her/himself in the annals of legal history? " would act when they'd have to spend most of their time trying to comprehend what the issues are BECAUSE THEIR CLIENT KEEPS SHOUTING AT THEM .

Best advice - get a solicitor, pay them, deal with it, including, if necessary, going to the Circuit Court.

mf

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... and your "best advice", like your welcome, says more about a mind-set than a desire to be constructive. There are people out there willing and able to help.

Besides, nobody forced you to read or reply to the "rant"! Get over it and get a life!

Kindly,

PeeBee

Is this thread too specific, in so far as it refers to a development of holiday homes with one or more private residences and a pub ?

Isn't the real underlying issue that so many OMC appear to be dysfunctional ?

Perhaps PEE BEE should start a new posting on OMC problems in general ?

One idea that has been kited several times in my experience is for aggrieved parties in OMC to form a Co-Op of sorts, where each Member pays say 100 euro into a "war chest" and, depending on Membership size and value of the war chest, that one, two or three "winnable cases" are chosen and prosecuted through the Courts.

I hope that's an accurate summation of PEE BEE's original posting, forgive me if I'm wrong.

PEE BEE is understandably upset and frustrated and deeply troubled by the situation he and his Partner find themselves in (through no fault of their own and despite their best efforts) and perhaps, like me, he / they find themselves wondering what part of "illegal" and "unlawful" a good many Citizens of this Country do not fully understand ?

Hi 'OMC FIX'

Thanks again for your CONSTRUCTIVE [with apologies to 'mfi' for 'shouting! ] support on this troubling matter.

Yes, your summation is pretty accurate and I compliment you on your grasp of the essential facts.

I will be happy to travel on the 'Clapham omnibus' with your suggestions which are based on experience and knowledge rather than the jibes of the ignorant and the cliches of the 'silent' '.

Yours,
PeeBee

There are none so blind ...

I am Irish and I appreciate that the law is loosely interpreted by many. For example, the difference between single yellow line and double yellow lines on the road means you can't park there at all at all ! And though I neither drink nor smoke I too have spent a few nights - as a designated Driver you understand - in pubs which have merely locked the door and dimmed the lights at "closing time". Mea culpa.

That said, the problem with OMC is that the OMC own the common areas and freeholds and absolutely must attend to maintaining the "fabric" of the buildings and must be "fit for purpose". But since OMC are relatively new to Ireland it seems that there is a certain National nonchalance attendant on their governance.

What does concern me, and should concern every sane Citizen in this Country is that OMC must survive or the developments risk becoming worthless tenements.

The other concern I have is that some of the high profile OMC failures to date (which may perhaps have had more to do with poor design and build than mud-management admittedly) have had to be rescued by the Taxpayers (Dublin City Council for example) and have resulted in financial ruin for many, mental health breakdowns, marital breakdowns and at least one widely reported death by suicide.

Some problems obviously need to be addressed for the sake of our children and future generations. I believe that this is one such problem.

I repeat my earlier question, do you know anyone in RTE or the print media? I have immense admiration and respect for the investigative Reporters in RTE and print media and we all owe them a debt of gratitude (Veronica Guerin RIP).

I'm afraid that I believe in "the power of the press" far more than I do in the slow, expensive, fallible legal system.

OMC FIX said:

That said, the problem with OMC is that the OMC own the common areas and freeholds and absolutely must attend to maintaining the "fabric" of the buildings and must be "fit for purpose". But since OMC are relatively new to Ireland it seems that there is a certain National nonchalance attendant on their governance.

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In many holiday home developments the OMC only owns the common areas and are not responsible for the houses themselves.


Also in my post above i said its a thankless task - I wasn't throwing roses at myself, more that its not a task most people would take on (I would never take it on again) because of the work involved, the in-fighting, the non-payment of fees and far too many people not understanding what an omc is or realising that they have signed a document agreeing to be a member. - And that was a OMC of 8 members!!!

Similarly, some people become directors and then treat it as if its their own fiefdom to enrich/favour themselves as seems to be the case here.

I'm just a lay person, but there'd be a couple of changes I'd propose to OMC operations as generally the leagl profession assume people know what they are agreeing to whereas the reality is many simply don't.

1 - A sinking fund of a fixed amount per property should be set up from the start at the purchase stage. Example purchase price €100k + sinking fund contribution €7500 bring overall inital purcahse price to €107500. This would ensure the sinking fund is properly funded from day 1 and ongoing maintenance costs / management fee would be far more reasonable. The fund would then be managed by the independent accountants / legal practice as in next point..

2 - Professional OMC management company that is reguistered and part of an accountants / legal practice would be in charge of overseeing expenditure, issuing invoices and providing timely accounts for a fixed maximum fee.

3 - One vote per registered owner, even if that owner has multiple properties.

4 - The OMC document / agreement to be separated from the sale documents as a specific standalone agreement with all relevant details of what is, what is not covered by the charge, so that all purchasers know and understand fully the obligations of being part of the OMC. - Currently its a few paragraphs in the overall legal documents which purchasers rarely read.

OP,

Your liberal use of bold type makes your posts extremely difficult to read, as does your use of shouted capitals. You'd probably get more responses if you adhere to the normal posting conventions on this site.

PEEMAC thanks for your comments.

Yes, the "fabric of the buildings" is obviously limited to apartment type buildings and yes, maintaining the "fabric" of stand alone properties is obviously the repsonsibility of the individual Owners and yes, in those cases the OMC is responsible only for the maintenance of the "common areas" and "some defined common area services".

Sorry for any ambiguity.

Yes, I agree, there is need for a lot of changes in the governance of OMC, but I don't think it would be reasonable or possible to cover everything in this forum. I would however hope that some of the abuses already identified could be addressed as a matter of urgency.

Yes, I too was a volunteer Director, and yes, it was a thankless job and yes, Long John Silver was already on deck when I unwittingly joined the crew.

Yes too to counter-propaganda and half-truths, anything that could be done to undermine the character and integrity of those that dissented was done.

No, I am afraid that Accountants are not the solution. Their roles are defined by their codes of practice and legislation. I have seen Auditors changed when they dared to question items of expenditure and ask for vouched receipts.

T McGibney said:

OP,

Your liberal use of bold type makes your posts extremely difficult to read, as does your use of shouted capitals. You'd probably get more responses if you adhere to the normal posting conventions on this site.

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Meaculpa, mea culpa, mea maxima culpa!

Thanks to 'OMC FIX' and 'peemac' for your thoughts.

Kindly,
PeeBee.

nosce te ipsum