Another management Company Question

Hero777

Hi Folks,

Need some opinions/advise.

I live in a managed appartment block (small @ 24 units) We had issues with the 2012/13 budget. To cut a long story short we the members of the block and company needed some breathing space. So we put a line item into the budget for this year to give everyone around a 200 euro discount.

Now i also have to say that our finances are in very good order. We have about the equivilant of 50% of the total fees for all 24 units in a current account and are also maintaining a sinking fund. All units are paid up and are still paying.

An EGM was called before christmas to approve the above measures and as such they came into effect.

My problem is this. The Directors of the company (who are the builders not the owners of units) have called another EGM Re the 2012/13 Budget.

How can they do this? Are they trying to force us to go back to the old figure and take out the 200 quid credit line? Can they do this?

Paulw

Maybe I'm missing something, but how can you give yourself a discount?

A management company should have it's budget set in relation to it's expenditure, and should have a sinking fund of €200 per unit, per annum since 2011, as per the Multi-Units Development Act 2011.

So, your budget shouldn't have extra padding, nor room for a discount.

On the EGM, yes, directors can call an EGM at any stage, as can a quorum of members.

Hero777

Paulw wrote: »

Maybe I'm missing something, but how can you give yourself a discount?

A management company should have it's budget set in relation to it's expenditure, and should have a sinking fund of €200 per unit, per annum since 2011, as per the Multi-Units Development Act 2011.

So, your budget shouldn't have extra padding, nor room for a discount.

On the EGM, yes, directors can call an EGM at any stage, as can a quorum of members.

Thats the killer, the Budgets for the last 5 years prior were 20-30% over estimated. As a result we have a huge amount of money in a current account which is not working for us. We knew that "giving a discount" could occur as we would be no where near effecting the day to day cash flow of the company.

Just on your point above we are not touching the sinking fund and have been accounting for that for the last few years.

I think my question is that once 1 EGM has been called and a budget approved, can the Directors go back on this for a second time?

Paulw

Hero777 wrote: »

I think my question is that once 1 EGM has been called and a budget approved, can the Directors go back on this for a second time?

Yes, the directors can call a company EGM as required, as can a quorum of company members.

You can check the info here http://www.irishstatutebook.ie/1963/en/act/pub/0033/sec0132.html

Hero777

Hey Paul,

Thanks for the link!

But on the same matter as what was resolved a month or 2 ago?

valleyoftheunos

Why are the builders still directors of the MC?

Hero777

valleyoftheunos wrote: »

Why are the builders still directors of the MC?

A couple of reasons to be honest. However the main one is the fact that none of the residents want to be exposed to any liability or head aches for that matter

Paulw

Hero777 wrote: »

But on the same matter as what was resolved a month or 2 ago?

Yes. Simple though, just vote the same way as you did last time.

Hero777 wrote: »

A couple of reasons to be honest. However the main one is the fact that none of the residents want to be exposed to any liability or head aches for that matter

That is the worst excuse ever. You are much much better off having control of your own management company. Then you can decide exactly how your money is spent and how best to run your own management company. As for liability, it's limited, and you can get director's insurance.

jd

Hero777 wrote: »

A couple of reasons to be honest. However the main one is the fact that none of the residents want to be exposed to any .. head aches for that matter

Looks like you all have one now!

valleyoftheunos

Hero777 wrote: »

A couple of reasons to be honest. However the main one is the fact that none of the residents want to be exposed to any liability or head aches for that matter

Once all the units are sold its most irregular for builders to still be involved in the Management Company.

jd wrote: »

Looks like you all have one now!

Beat me to it!

Hero777

valleyoftheunos wrote: »

Once all the units are sold its most irregular for builders to still be involved in the Management Company.

Is it? I think what i understand from the MUD act that they have to be romoved within 3 years of the legislation being implamented. Now i could be wrong, going off the top of my head here.

Like anyone we are trying to cut costs as best we can. This year we were able to pull up the MGMT Co on a few silly operating procedures in turn saving a little.

Not sure if this would solve the head ache or not but at an EGM can the director be replaced with residents or can that only be done at the AGM? In my opinion its about time we pulled in on the reins with this.

Paulw

Hero777 wrote: »

Not sure if this would solve the head ache or not but at an EGM can the director be replaced with residents or can that only be done at the AGM? In my opinion its about time we pulled in on the reins with this.

Yes, it can be done at an EGM, as long as it is put in the agenda when the EGM is called.

valleyoftheunos

Hero777 wrote: »

Is it? I think what i understand from the MUD act that they have to be romoved within 3 years of the legislation being implamented. Now i could be wrong, going off the top of my head here.

Like anyone we are trying to cut costs as best we can. This year we were able to pull up the MGMT Co on a few silly operating procedures in turn saving a little.

Not sure if this would solve the head ache or not but at an EGM can the director be replaced with residents or can that only be done at the AGM? In my opinion its about time we pulled in on the reins with this.

The first AGM after the last unit is sold and common areas transfered would be an appropriate time to remove builders from the Board. At this stage the Builders have no interest in the development and I'm surprised that they have any desire to stay on the Board.

Casey Kennedy Properties

I think it is great that you have created a surplus and can reduce fees. What was missing or was my immediate question was why the EGM was called. The only reason why I could think of was something has happened that will effect the running cost in the coming year. If this is not the case and you don't agree with the reason to change the budget then vote no

If you have a fully funded sinking fund then there is no reason why you can't use the surplus to fund operating expenses this year and reduce the fees for this year.

Le_Dieux

Hero777 wrote: »

Thats the killer, the Budgets for the last 5 years prior were 20-30% over estimated. As a result we have a huge amount of money in a current account which is not working for us. We knew that "giving a discount" could occur as we would be no where near effecting the day to day cash flow of the company.

Just on your point above we are not touching the sinking fund and have been accounting for that for the last few years.?

Just wondering...if You have a 'huge amount of money in a current account', how come the Revenue haven't come looking around for their tax?

Casey Kennedy Properties

Is that a serious question. Management Companies are non profit. They are set up to manage shares expenses such as light & heat, insurance, cleaning in common areas such as corridors or gardens.

Zaph

Casey Kennedy Properties, as you are posting on behalf of a company I have to ask you to refrain from posting any further until you have obtained a verified rep account from the guys in the office. They can be contacted at reps@boards.ie

Please note that further posts without having first obtained a verified rep account will result in a siteban.