I have experienced endless difficulties with the management company in a complex I own in Dublin. The company actually bring in a 'heavy gang' to the meeting and refuse to accept any new members on to the committee. They get proxy votes and refuse to let those who attend the meeting elect any new members. The same members re-elect themselves every year. They don't chase up those who have not paid management fees and then say they cannot vote at the annual general meeting (agm).
I think the legislation needs to ensure that management committees are not allowed stay in their positions forever. The experience at our last agm was terrible and I felt sorry for a new owner in the block. The chair – an outsider paid for by the manager to chair the meeting – was dreadfully rude to her.
Legislation in relation to the running of owners’ management companies (OMCs) was introduced by the government in the 2011 Multi-Unit Developments Act. Before this, directors of OMCs could remain in situ for indefinite periods (“directors for life”) and in some cases this did not work in the interests of property owners. No director can now serve for a term of longer than three years.
However, provided the person is entitled to be a director under the constitution of the company, the law allows a person standing down at the end of a term to be re-elected. It also says that, unless there are some exceptional circumstances, voting will be on the basis of “one residential unit, one vote”. So, it is then up to the members of the company to ensure the directors elected are the people who will best oversee their development.
The fact that directors can stand again is sometimes a good thing in that it can provide continuity and allow an OMC to draw on the experience or specific expertise of directors. Also, in small developments, it can be difficult to get people to put themselves forward as directors so it could be hard to get a brand new board every three years.
That said, it is good practice for boards to be open to new ideas and perspectives. Research suggests boards with a diverse make-up make better decisions over time whereas boards that are “cliques” perform less well. What is optimal is a board with diverse perspectives but where all directors are working to common goals and as a team.
There are also other ways in which owners in a development can feed in their views. For example, the agm is an important forum and should encourage open discussion. Under “Any Other Business”, any property owner should feel free to raise any matter and have their point listened to and responded to by the board.
In terms of procedures around chairing the agm, these may be set out in the company’s constitution and you are entitled to receive a copy of this. Normally a director would chair the agm but sometimes the board may ask another party (eg another member or the managing agent) to do so or to manage part of the meeting. However, a good chairperson should always act in a professional way and should treat all property owners in a fair and impartial manner.
You say that the OMC is not chasing up on management fees. This is a serious matter as, if it becomes known that service charge collection processes are lax, this may create an incentive for other owners to not pay. When the OMC financial accounts are being discussed at the agm, you are entitled to ask about amounts of service charge arrears owing and processes in place to collect these. You and other members are also entitled to make suggestions to the board and the managing agent as to how these processes should be improved.
Finbar McDonnell, chartered property manager and member of the Society of Chartered Surveyors Ireland, scsi.ie
