Mgt Co Dilema: Mgt Dir. is the developer (still owns apts). He is to resign. No ins.

[OisinRoo2002]

Hi Guys

Am a long time reader but first time poster.

I am in a terrible situation at the moment. I bought a duplex in a development of 15 properties made up of 3 houses, 6 duplexes and 6 smaller appartments in 2006. The management company director is the developer who still owns one of the smaller appartments.

I received a letter on 18th March advising as some properties had not paid their annual service charge of €250 the buildings insurance policy would be lapsed wef 18/03/2011.

I received no renewal notice and had rang the solicitor who we normally paid the service charge to about this and was told I would receive a letter.

The situation now stands that the developer/director of management company plans to resign and there is currently no buildings insurance policy in place.

I have spoke to my own solicitor who has advised the management company is in breech or contract and that we need to organise a meeting asap. I am currently waiting on a list of contact details for the owners of the other units as alot of these units are currently being rented out.

Can I also add that other than the arranging of the block insurance policy there has been no maintenance work carried out in the last couple of years and currently we are mowing grass and tidying up the common area ourselves.

I have been told that the developer cannot resign unless he has someone else in place to take over his role as director.

I am very inexperienced in these matters and any advice is gratefully appreciated.

 

[redfedora]

Hi Guys

I received a letter on 18th March advising as some properties had not paid their annual service charge of €250 the buildings insurance policy would be lapsed wef 18/03/2011.
.

I’d be hugely concerned about a management company/agent that can’t manage to collect service charges from 15 units in a company especially considering you have mentioned that you usually pay your service charges to a solicitor. That’s the root cause of the problem, people haven’t paid their service charges and there is no money left to pay your block policy, it is a dilemma that a lot of companies will face as some folks that couldn’t be bothered to pay use the “economic downturn” as an excuse to hide behind.

I received no renewal notice and had rang the solicitor who we normally paid the service charge to about this and was told I would receive a letter. .

Maybe its a case that they are actually trying to use the threat of the policy being voided to scare those that haven’t paid into submission, i mean if this is the first time you guys are hearing about it then it may actually be a tactic to get money in, it’s actually most probably true that the company is using whatever money does come in to ensure insurance is in lace but is not facing breaking point where other suppliers such as cleaners if you have them, gardeners etc all have outstanding invoices and may be threatening legal action if it goes unpaid. Obviously this is speculation on my part because i know 0 about thou company’s finances or services.

The situation now stands that the developer/director of management company plans to resign and there is currently no buildings insurance policy in place..

The operative word here is PLANS to resign, also the Management Company may actually have a legal obligation to ensure the insurance is in lace, check your head lease or Memo and Arts it usually covers it in there. In our case there’s a clause about insurance

I have spoke to my own solicitor who has advised the management company is in breech or contract and that we need to organise a meeting asap...

The directors resign before a General Meeting, new directors are proposed and seconded and if that proposal is passed at a General Meeting then the new directors take over. In general the Developer resigns and some of the owners take over, the company legally requires a minimum of 2 directors. There is also an option for all but one director to resign midyear and for the remaining directors to Co-Opt someone for the remainder of that year i.e. tilt eh next general meeting, that co opted director then automatically steps down but can offer themselves for re-election. Your memo and arts should cover the process of appointing directors.

I have been told that the developer cannot resign unless he has someone else in place to take over his role as director....

I’m no lawyer but under company law a company must legally have 2 directors, and i believe a director must act in such a manner to ensure the company does not break the law. Therefore i would speculate that if a director were to resign and not ensure there was a suitable replacement then the company is in breach of the law, i would think by extension the resigning or remaining directors would also be in breach. I’m pretty sure it would take a costly and long legal process to have himself removed as a director without their being a suitable replacement.

I’m going to hazard a guess that the developers are doing a runner and trying to hand over the development prior to April 1st as the new MUD legislation comes into play then.

 

[Sojourner]

OisinRoo2002
Do you guys really only pay € 250 per annum? That's € 250 x 15 units = € 3750.

That just isn't enough, it's not surprising you're mowing the grass etc. Check it out and let us know.