Property Management Company - Directors paying themselves?

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emptyness

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Hi,

I have an apartment in a complex which is managed by a property mgmt company. This company has a Board of Directors drawn from residents and a representative of the developers (as the complex is fairly new).

The company retains a property mgmt agency to look after the day-to-day maintenance of the complex.

Recently the property mgmt company (not the agency) have set a rate they will charge any apt owner for time they spend dealing with issues related to the apt (e.g. complaints about tenants etc).

I find the rate to be exorbitant (as well as being in addition to a standard mgmt fee).

My question is whether the Board of a company like this have the right to arbitrarily set the rate of their renumeration or does it have to be ratified - e.g. at an AGM?

Thanks for any help/pointers.
 
emptyness said:
This company has a Board of Directors drawn from residents and a representative of the developers (as the complex is fairly new).
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Elected by the members of the company presumably?
My question is whether the Board of a company like this have the right to arbitrarily set the rate of their renumeration or does it have to be ratified - e.g. at an AGM?
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You might need to check the memo and articles of association of the company to ascertain this. Seems unusual - I've never heard of management company directors being awarded payment before. Having some expenses reimbursed maybe.
 
Who is charging this time-based fee to the apartment owners? - the property management company or the individuals themselves?
 
ClubMan said:
Elected by the members of the company presumably?
You might need to check the memo and articles of association of the company to ascertain this. Seems unusual - I've never heard of management company directors being awarded payment before. Having some expenses reimbursed maybe.
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Yes the directors were nominated at an AGM but their renumeration wasn't addressed at an AGM
 
ubiquitous said:
Who is charging this time-based fee to the apartment owners? - the property management company or the individuals themselves?
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As far as I know noone has been issued with an invoice yet so I don't know who it will come from.
I expect the individual on the board will invoice the tenant (but I suppose they could go through the property management company).
 
If the property management company is invoicing the apartment owners, then it does not automatically follow that this represents remuneration that will be paid directly to the individuals concerned. It may simply represent an attempt by the management company to ensure that the cost of administering queries relating to particular properties is met by the owners of these properties and not by the property owners as a group.

If the individuals on the board are invoicing owners directly, or if they are receiving remuneration from the management company for such work, then these arrangements would carry fairly serious implications that would need to be addressed by the management company's board and by its auditors.
 
Thanks for your help.
Should I request the memo and articles of association of the company to see if they are allowed to do this?
If so where do I request them from?
 
Do you not get a copy of these documents with the legal documentation relating to the property conveyance? I can't remember. Maybe ask your lender or solicitor. If not then you may need to ask the management company for a copy or get them from the CRO.
 
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