Management Company Fees

[8till8]

No i mean two directors of the OMC. Yes one provides cleaning services. The other manages the development for the fee above. There was a separate outside management company employed years ago but they were more expensive and were hard to reach in the event of an issue. Very poor in fact.

Numerous issues with the situation as you describe;

-conflict of interest where a director also provides cleaning services back to the OMC...how can any member be assured that its an above board arrangement?

-OMC directors earning fee's...thats totally wrong, sure we'd all be doing that if it was tolerated. It may be against the company memo and articles, here is the clause in the standard law society version, but it depends whats in yours...
"No remuneration shall be payable to the Directors, but they may be paid all expenses properly incurred by them in connection with the business of the Company."

-If the members are self managing, they may be required to hold a license from the PSRA.

None of what you describe sounds healthy

 

[notabene]

Yes. And the other has been managing the whole development for years for a monthly fee. And both have offered to be reelected for next year. So it can't be all too bad for them. The problem is others are too busy to look into the accounts and see if it could be done cheaper. 1600 euro a year management fee, I'm sure it could be done for less.

In a small development it’s hard to do it for less, our mgt fee is a bit more above that for 35 apartments - it’s approximately €65k per year to run the development with four very involved owner directors questioning all costs and keeping it in good order - when you’ve fewer apartments costs are going to be higher, you don’t have good economies of scale. And if I’m honest and not that I want it but the fee probably should be higher again in terms of improvements and contributions to the sinking fund - it can take very little in terms of issues to obliterate your sinking fund

 

[notabene]

Does anyone know what level of detail as a member of a management company you are entitled too.

My management companys agent isnt shopping around and he is just putting contracts through his "preferred" providers.

Can I get access to the figures and quotes they claim to be getting. They've said only directors have can have this access. Is this correct legally? Is there a way I can check on this?

Our 2 directors just take what the agent says at face value?

Thanks everyone

You’re entitled to the budget - only directors are entitled to the bills - if you want more detail you need to attend the AGM and become a director.

With all due respect running around getting quotes isn’t going to get you any favour from the current directors for example with insurance - you don’t know what claims have been made or other significant details which could have increased the price of the insurance - there may well be issues of ‘preferred suppliers’ and not shopping around but until you’re a director you won’t know the full story behind costs and charges as members aren’t told every aspect of what is going on. Only solution is to to the AGM and become a director yourself and then you can see what’s what and look at improvements as necessary

 

[Freddie]

You’re entitled to the budget - only directors are entitled to the bills - if you want more detail you need to attend the AGM and become a director.

With all due respect running around getting quotes isn’t going to get you any favour from the current directors for example with insurance - you don’t know what claims have been made or other significant details which could have increased the price of the insurance - there may well be issues of ‘preferred suppliers’ and not shopping around but until you’re a director you won’t know the full story behind costs and charges as members aren’t told every aspect of what is going on. Only solution is to to the AGM and become a director yourself and then you can see what’s what and look at improvements as necessary

Ok can I request the bills then, as I'm paying for these with my management fee.

With all due respect, I'm not looking for any favours with current directors. I'm just looking for our money to be spent in the most efficient way. And to have as much money diverted to our almost non existent sinking fund. I'm happy to keep mgmt fee the same.

If I take external window cleaning all quotes I received were €300 - €400 cheaper. Following a site visit, with same visits per year.

Internal cleaning is currently costing €13000. All quotes I received are for between €6000 and €6500. I have also found out that the company the agent uses is an internal company to them. I'm getting these quotes following site visits and frequency of cleaning. One company cleans were my brother and his wife lives. They do an excellent job since he bought there.

Lift maintenance including fixed lines for emergency, all quotes were 30% - 40% less with same frequency of visits. This too follows sites visits in case of issues with the lift type we have.

Refuse collection quotes for same frequency of collection, same no of recycle and waste bin was €500 cheaper. This too followed a site visit by them.

And I can go on

So with due respect why are the current directors not doing this, instead of worrying about me doing them "favours" as you put it.

At the AGM the agent said to the floor that he didnt think it would be a good idea for me to become a director as he felt there was a clash of personalities with me and one of the directors.

I didnt think this was appropriate for him to do. Was this against the rules even? So I've been effectively black listed now from becoming a director for the foreseeable future.

In fact the real reason, is that the agent is worried to have someone as a director who will upset his income stream from his suppliers and contracts.

 

[notabene]

Ok can I request the bills then, as I'm paying for these with my management fee.

With all due respect, I'm not looking for any favours with current directors. I'm just looking for our money to be spent in the most efficient way. And to have as much money diverted to our almost non existent sinking fund. I'm happy to keep mgmt fee the same.

If I take external window cleaning all quotes I received were €300 - €400 cheaper. Following a site visit, with same visits per year.

Internal cleaning is currently costing €13000. All quotes I received are for between €6000 and €6500. I have also found out that the company the agent uses is an internal company to them. I'm getting these quotes following site visits and frequency of cleaning. One company cleans were my brother and his wife lives. They do an excellent job since he bought there.

Lift maintenance including fixed lines for emergency, all quotes were 30% - 40% less with same frequency of visits. This too follows sites visits in case of issues with the lift type we have.

Refuse collection quotes for same frequency of collection, same no of recycle and waste bin was €500 cheaper. This too followed a site visit by them.

And I can go on

So with due respect why are the current directors not doing this, instead of worrying about me doing them "favours" as you put it.

At the AGM the agent said to the floor that he didnt think it would be a good idea for me to become a director as he felt there was a clash of personalities with me and one of the directors.

I didnt think this was appropriate for him to do. Was this against the rules even? So I've been effectively black listed now from becoming a director for the foreseeable future.

In fact the real reason, is that the agent is worried to have someone as a director who will upset his income stream from his suppliers and contracts.

No you can’t request the bills and as I said to you previously you don’t know all the details involved which is not to say there aren’t improvements to be made but it may not be quite the situation you think it is. The basic running of a block, aside from improvements is more expensive than you might think.

If you are nominated as a potential director there is an election and it is up to the members to decide who they want as directors - not for anyone to suggest and if they do why can’t you argue your case - but it is essential that the directors must be able to work together - and this is what I meant by not gaining favour with the current directors - nothing to do with income streams - perhaps perceptions of how you are presenting yourself & how you deal with the current directors, agents, other members during the at the AGM and in between need to be considered

 

[Freddie]

No you can’t request the bills and as I said to you previously you don’t know all the details involved which is not to say there aren’t improvements to be made but it may not be quite the situation you think it is. The basic running of a block, aside from improvements is more expensive than you might think.

If you are nominated as a potential director there is an election and it is up to the members to decide who they want as directors - not for anyone to suggest and if they do why can’t you argue your case - but it is essential that the directors must be able to work together - and this is what I meant by not gaining favour with the current directors - nothing to do with income streams - perhaps perceptions of how you are presenting yourself & how you deal with the current directors, agents, other members during the at the AGM and in between need to be considered

I took your point about not knowing about insurance. That's why I didnt mention this again.

But in terms of cleaning internally and externally and not using fixed line for a lift. There is no background details to know or not to know here. e.g the internal cleaning for any other providers in the market is 50% less than the current provider. I have just found out that this cleaning company is closely linked to the agents company.

If the directors were shopping around at all, this would be immediately be obvious.

Is it a law that prevents me from requesting the different bill amounts? After all I am paying for these amounts.

I dont understand what you mean about perceptions about how I deal with directors, agents or other members before or after AGM.

I didn't have any contact with any of them to have good or bad perceptions either before or after. Why would you think I would have contact with them. The place to raise my concerns about the budget was the AGM and this was the only place I did.

 

[Clamball]

So is the AGM over now and you were not elected? There is nothing you can do until next year now.

I think what Notabene is trying to say is that if you approach the AGM and say the current directors are too lazy (or inept) to keep costs down and are not improving the sinking fund because they leave all the decisions to the agent you may not get elected. But if you say I am enthusiastic to join as a director because I want to help with getting quotes and keeping running costs good value for money and we can then divert surplus into sinking fund then people will vote for you. You need to put your efforts into meeting some of the residents and telling them what you hope to achieve rather than saying the current lot are a shower of idiots, we pay 10K for lifts and I can get it for €5K. It’s all the same message but in one you are awkward and confrontational and in the other you are enthusiastic and helpful.

 

[Freddie]

So is the AGM over now and you were not elected? There is nothing you can do until next year now.

I think what Notabene is trying to say is that if you approach the AGM and say the current directors are too lazy (or inept) to keep costs down and are not improving the sinking fund because they leave all the decisions to the agent you may not get elected. But if you say I am enthusiastic to join as a director because I want to help with getting quotes and keeping running costs good value for money and we can then divert surplus into sinking fund then people will vote for you. You need to put your efforts into meeting some of the residents and telling them what you hope to achieve rather than saying the current lot are a shower of idiots, we pay 10K for lifts and I can get it for €5K. It’s all the same message but in one you are awkward and confrontational and in the other you are enthusiastic and helpful.

Clamball I didn't mention anything at the AGM about how useless or inept the directors are. Or how the managing agent is making all decisions re contracts and suppliers.

I started off saying that I know being a director takes lots of work and looks like a thankless job.

I said I had gotten some quotes for the budget items and I was shut down mid flow by the managing agent.

I kept all my opinions to myself and just kept it objective. I just stuck to the figures in my quotes as a comparison to the the budget figures.

I said my main intention was to add all saving to the non existent sinking fund.

 

[Freddie]

Your advice is really good Clamball. Thanks.

Before the AGM my brother had said something similar to me.

But I did become confrontational when the agent shut me down when I was going through my quotes showing that for the same no. of hours or for the same no. of visits or for the equivalent proposed costs we could get the same for x.

I was wrong here and this didnt help me I know. But I was frustrated at not being given the time to speak given the amount of work I had put into getting quotes.

A few of the residents who did attend, thanked me after the meeting and said not to give up heart.

I honestly think they see the agent as the "boss" , I'm sorry that's probably the wrong word to use, but in that vain anyway.

 

[llgon]

A few of the residents who did attend, thanked me after the meeting and said not to give up heart.

Sorry to hear the meeting did not go so well. However it may be a wake up call to the agent that they need to get more competitive quotes for the next budget.

Did you put yourself forward as a Director? Was there a vote? Was it close? Did the residents who thanked you vote for you?

Although they may regard the agent as a figure of authority I'm sure they realise that with their vote things can change, if they want change. When they told you not to give up, did you ask if you would have their support in the future?

 

[Freddie]

Thank you. I hope it is a wake up call. Or at least he is aware that someone else is watching the figures. From what I gathered, this hasn't happened before.

Yes I said I wanted to become a director. The 1st response from the agent was that I should have put myself forward earlier in the meeting. I put myself forward when he asked about AOB, I didn't see another time to do this.

The managing agent then said he didnt think it would be a good idea as it was obvious to him that there was a personality clash between me and another director. He is right in terms of I disagreed with the budget that they had put forward. Given the 2 weeks of effort I'd put into getting quotes etc. I wasnt just ranting at a meeting, saying this and that is a disgrace...."down with that sort of thing". I had figures, supplier quotes etc

The agent decided it wasnt a good idea for me to go forward, so there was no voting.

I was then told we needed to wrap up as the meeting room was booked for an hour and they were looking for the room back immediately, and the meeting was ended.

Even that was frustrating as people milled about for another 10 mins. This is when some people thanked me.

You are correct in that I wasnt organised properly in terms of getting support from other owners beforehand though.

I've gotten emails since, from 2 other owners who want to see my research/quotes etc. I'll need to type up my notes and get the quotes together for circulation.

At the end of the day it should be about getting the best for the development, value for money good service etc.

I'm happy to do the background stuff and have someone else present it at meetings.

As Clamball said in a better way.

 

[Freddie]

It was a bad experience in the meeting but it was a good learning experience.

I'm completely new to all this, AGMs, directors, managing agents....I have alot to learn and was very green and naive...I know that now too.

 

[llgon]

It's good to keep in touch with other owners for the moment. When next year's AGM is on the horizon you can decide if you wish to put yourself forward as director again and no doubt you will be more prepared next time.

Once you follow the rules for election of Directors it doesn't matter if the managing agent thinks it's a good idea or not. It's totally up to the owners.

 

[Clamball]

Have a look at your rules for AGMs. I would not be surprised if you need to be nominated and seconded in advance, by writing, for there to be an election. Having directors elected in AOB sounds wrong. It’s good to have other owners interested as they can nominate and vote for you next year.

 

[Sunny]

That was a very odd intervention by the Management Agent at the AGM. They had no right to say that. If you don't want to wait until next year, you could try and get support for calling an EGM but you need to detail exactly why you are calling it e.g. You have concerns about the budget etc. At the very least, make it very clear before the next AGM that you are looking for election to the board and ensure that the item is on the Agenda.

As an owner even if you are not a director, you are perfectly entitled to see the books of the Management Company and the Management Agent must make them available to you. This would include evidence of proper procurement by getting multiple quotes etc. In my previous development, we did an audit once a year which consisted of the directors and at least 2 owners going into the offices of the Management Agent for two days and examining the books. Again, you are relying on people having the expertise, the time and the desire to do this.....Brings back nightmares to be honest...

 

[elcato]

If it's any help, I just checked the notice I got about the AGM this year and it just stated that anyone who would like to put themselves forward for nomination for the directors would need to notify the management agent no less than three days before the meeting.

 

[Freddie]

Sunny, yes I couldn't believe that the agent did this. I know he said it was because of how I had clashed, meaning asking hard questions, where the director or himself didnt have adequate answers.

The real reason is he doesnt want anyone upsetting his cash cow with his little setup of contractors and suppliers.

In terms of seeing the paperwork behind the figures quoted in the budget, he has said that only directors are allowed access to this.

Is there something legal saying I can see or request this? I have no problem getting/paying for legal advice on this. In the end it would be money well spent by myself and we (all apartment owners) would all benefiting in the short term and long term.

Having an audit like you had, sounds a like a brilliant idea. I'd have no problem using my own time. I'm sick of the small guys being screwed by the bigger operators(in all aspects of life!!)

Thanks alot for giving me all this info.

 

[cremeegg]

In terms of seeing the paperwork behind the figures quoted in the budget, he has said that only directors are allowed access to this.

As a general matter of company law this is correct.

As an owner even if you are not a director, you are perfectly entitled to see the books of the Management Company and the Management Agent must make them available to you.

This may well be the case but I wonder what is the legal basis for the statement.

Having an audit like you had, sounds a like a brilliant idea.

An audit, as legally defined and applied to thousands of companies would be unlikely to be of any help to you. It would simply be an auditors opinion that the accounts are materially correct. i.e. the accounts say €x,000 was spent on insurance and in the auditors opinion that is what was spent on insurance. An audit would not normally ask if this was good value, or if a better price was available.

 

[Freddie]

To me (admittedly as a complete newbie) I suppose the bit I dont understand, is why I can't see some details of the bills I'm paying.

I'm not looking to see anything that's not related to these bills.

 

[Zenith63]

To me (admittedly as a complete newbie) I suppose the bit I dont understand, is why I can't see some details of the bills I'm paying.

I'm not looking to see anything that's not related to these bills.

I'm a Director of an OMC and have been asked for this by an owner, I pushed back fairly firmly. I do this role free-of-charge in my own personal time (which I have less and less of these days with young kids) and ultimately if the other owners do not trust my (and the other Directors') judgement then they should replace us and volunteer themselves. An OMC is little different to a 'real' company, you as an owner are like a Shareholder and the Directors are appointed to run the business; shareholders in companies do not get involved in the day-to-day running of the company, if they're not happy with how the Board are running the company they seek to replace them.

From following this thread it does seem like there may be issues with your existing Directors and management agent, but I'm just posting to say that even if you get to a best-case scenario with really great Directors, they should not be sharing bills or day-to-day operations of the OMC - because they've been appointed so owners don't have to worry about this stuff and owners should not be unreasonably increasing the free-of-charge commitment these people have made.

It sounds to me like you need to replace the Board. Look up the memos and articles of the OMC, in all likelihood all Directors must resign and be reelected each year. Speak to some other members, if there's a clear majority in agreement with you then you show up and vote the Directors out. If you think there's serious impropriety going on, with enough votes you should be able to schedule an EGM sooner to replace the Board.