Can the directors of a management company impose clamping with no majority vote?

username123

I am an owner occupier in a managed apartment complex.

I am fully up to date with fees and attend all AGMs.

I received a letter yesterday telling me that clamping is to be introduced in the development to enforce non payment of fees. I phoned the managing agent to find out under whose authorisation this has been brought in and was told the directors decided on it and it requires no majority vote of owners.

Is this true? What can I do to reverse this? I have already stated I want a meeting called of all owners. However the managing agent continued to tell me that legally there is nothing I can do.

Paulw

If you get a quorum of members together (the exact number should be specified in your company documents), you can call a company EGM, and then you can vote on the situation, and/or vote to remove the sitting directors and replace them.

As for the introduction of clamping, I am not aware of any reason why the directors can't introduce it, but I am open to correction.

username123

Thank you Paulw.

godtabh

Paulw wrote: »

If you get a quorum of members together (the exact number should be specified in your company documents), you can call a company EGM, and then you can vote on the situation, and/or vote to remove the sitting directors and replace them.

As for the introduction of clamping, I am not aware of any reason why the directors can't introduce it, but I am open to correction.

my understanding, as a director, is that we can introduce any measures we want. The flip side is that we are judged against these. We have introduced clamping and it works well

Paulw

godtabh wrote: »

my understanding, as a director, is that we can introduce any measures we want. The flip side is that we are judged against these. We have introduced clamping and it works well

I am a director of a management company, and I agree with you. We introduced it too and it works for us.

My understanding is that the directors can bring in any measure that is beneficial to the development. It would be more normal to do it via a vote at an AGM, but it doesn't have to be so.

If the OP and a majority don't agree, then the action can be overturned at an AGM or EGM, and the OP is free to stand for election as a director.

Peregrinus

What the directors can and can't do without a vote of the members depends on what it says in the company's articles of association.

However, in standard form articles it's the role of the directors to manage the company's business. The role of the shareholders is to hire and fire the directors. The directors generally don't need shareholder approval for management decisions and, if the shareholders don't like the decisions that the directors take, their recourse is to fire the directors.

Directors may choose to seek shareholder approval for significant business management decisions. But in general they don't have to. (They generally do need shareholder approval for decisions affecting the share capital of the company, e.g. issuing new shares, restructuring the shareholding, etc.)

Greenmachine

Hope you manage to overturn this OP.

username123

Paulw wrote: »

If the OP and a majority don't agree, then the action can be overturned at an AGM or EGM, and the OP is free to stand for election as a director.

This is what I will be aiming for. It was explicitly discussed at the second last AGM and the majority of people in the room expressed that they did NOT want clamping introduced to enforce non payment of fees. We do not have a problem with illegal parking and do not have assigned parking.

Its my opinion that independent clamping on private property to enforce non payment of an unrelated debt amounts to a moral wrong. Other neighbours feel the same way. No one I have spoken to agrees with such a heavy handed tactic.

Thanks for the advice here, I will print off and deliver leaflets to each property instructing each owner to call for an EGM if they disagree with clamping and see if we can get this overturned.

hullaballoo

In order to do things by the book, at this stage you and the other complaining residents need to get proper legal advice.

Convening an EGM to displace directors is not always straight-forward as it is, for want of a better turn of phrase, a change in the constitution of the company. Therefore, the rules of the company itself, precedents and the relevant legislation need to be complied with in order for such a move to be legally effective.

username123

Ok - thanks hullaballoo.

Thoie

Maybe talk to the directors first to find out why they've done this?

No-one like clampers. The directors, who quite possibly are your neighbours, didn't wake up one morning with a sudden yen to invite irritating people into the carpark (probably).

When people don't pay their management fees, it leads to a lot of issues for the company. That money has to pay everything from building insurance, waste disposal, to electricity bills for the communal areas, before you even start on general maintenance. The company has very few ways into forcing people to pay up (and remember, owners signed a lease at purchase promising to pay annual fees). The legal route of bringing people to court to force them to pay is costly in and of itself, and if the company is having financial difficulties, they may not be able to afford to do that.

That pretty much leaves them with "begging" or "clamping". I hate clamping, and disagree with it strongly, but if the alternative is to let the building insurance lapse, or to let all the rubbish build up forever more, which do you think is better?

Given that you're fully paid up, maybe you could look into getting some sort of guarantee that the clampers hired will declamp (for free) on authorisation of the management agent. That way if someone was accidentally clamped, the agent could confirm they had paid and order a declamp.

billy few mates

I am fully up to date with fees.....

If you're fully up to date with your fees surely you would welcome any move by the Management Company to ensure everyone else pays their fees as well...?

username123

They've done it to enforce non payment of fees for a small number (less than 10) of persistent non payers. I suspect it's being done as a small revenue stream also but no one is admitting it out loud.

I think letting rubbish build up or insurance lapse is better than clampers actually. It's difficult to get across but I see clampers as totally morally wrong, a much bigger wrong than non payment of fees. There are other methods to induce payment, bin keys, we have a key fob pedestrian gate, they could even assign parking spots or put a carpark gate on. It's less than 5% of the development who are non payers, surely there is contingency in the budget to cover less than 5% non funding year on year? These non payers can never sell without settling outstanding fees so eventually they get paid anyway.

No guarantee is worth the paper it's written on. There is thread after thread on here about management companies wiping their hands of it and leaving people who should never have been clamped to deal with the clamping company. It's extortion.

username123

billy few mates wrote: »

If you're fully up to date with your fees surely you would welcome any move by the Management Company to ensure everyone else pays their fees as well...?

I absolutely do not welcome any move at all. Private clamping is morally wrong IMO. I do not wish to live in an environment that sponsors extortionate thugs to bully the residents. No way.

Paulw

username123 wrote: »

They've done it to enforce non payment of fees for a small number (less than 10) of persistent non payers. I suspect it's being done as a small revenue stream also but no one is admitting it out loud.

I think letting rubbish build up or insurance lapse is better than clampers actually. It's difficult to get across but I see clampers as totally morally wrong, a much bigger wrong than non payment of fees. There are other methods to induce payment, bin keys, we have a key fob pedestrian gate, they could even assign parking spots or put a carpark gate on. It's less than 5% of the development who are non payers, surely there is contingency in the budget to cover less than 5% non funding year on year? These non payers can never sell without settling outstanding fees so eventually they get paid anyway.

Normally, developments don't make a cent from clamping, so there is no revenue stream for them. Even if there is, it must be documented in the accounts at the end of the year, so everyone can see.

As for your statement that people eventually pay .... a few years of units not paying means that everyone else must pay more. The yearly budget is based on every unit paying it's fair share. If they can't get that money, then fees must increase, and increase until there is enough money to cover the running costs.
No insurance on a development could leave all unit owners in breach of their mortgage, and hence in a very very dodgy situation. Are you still in favour of that?

I recommend that you become a director yourself, and try to decide on the budget, how money is to be collected, what fees are needed, and how the money is to be spent. It's very easy to take your stance, until you are the one responsible for how your own development is run.

billy few mates

username123 wrote: »

I absolutely do not welcome any move at all. Private clamping is morally wrong IMO. I do not wish to live in an environment that sponsors extortionate thugs to bully the residents. No way.

Well if you're quite happy to continue paying your fees while some of your neighbours choose not to then you should fight this tooth and nail, I'm sure those people will be glad of your support....

username123

Paulw wrote: »

Normally, developments don't make a cent from clamping, so there is no revenue stream for them. Even if there is, it must be documented in the accounts at the end of the year, so everyone can see.

As for your statement that people eventually pay .... a few years of units not paying means that everyone else must pay more. The yearly budget is based on every unit paying it's fair share. If they can't get that money, then fees must increase, and increase until there is enough money to cover the running costs.
No insurance on a development could leave all unit owners in breach of their mortgage, and hence in a very very dodgy situation. Are you still in favour of that?

I recommend that you become a director yourself, and try to decide on the budget, how money is to be collected, what fees are needed, and how the money is to be spent. It's very easy to take your stance, until you are the one responsible for how your own development is run.

I appreciate your input but there is nothing that you can say that will make me believe that clamping is a good option. In my opinion it should never be an option.

Obviously I am not in favour of being in breach of mortgage, but I am even more not in favour of clamping!!

I dont have the time (or the inclination to be honest) of being a company director. I am grateful for the work they do but that doesnt mean I have to accept a heavy handed tactic like this being imposed without discussion or vote.

username123

billy few mates wrote: »

Well if you're quite happy to continue paying your fees while some of your neighbours choose not to then you should fight this tooth and nail, I'm sure those people will be glad of your support....

Its hardly like its clamping or nothing, there are other options.

Victor

username123 wrote: »

I think letting rubbish build up or insurance lapse is better than clampers actually.

So if the rubbish catches fire and the whole building burns down and everyone is homeless, but still owe mortgages, that would be OK?

It's difficult to get across but I see clampers as totally morally wrong, a much bigger wrong than non payment of fees. There are other methods to induce payment, bin keys, we have a key fob pedestrian gate, they could even assign parking spots or put a carpark gate on.

Got €25,000?

It's less than 5% of the development who are non payers, surely there is contingency in the budget to cover less than 5% non funding year on year?

That is 5% (more in reality) added to your, and every one else's management fee.

These non payers can never sell without settling outstanding fees so eventually they get paid anyway.

Perhaps a property in negative equity and owner goes to Australia, perhaps leaving a dilettante tenant. THE management company would never get their money.

username123

Victor wrote: »

So if the rubbish catches fire and the whole building burns down and everyone is homeless, but still owe mortgages, that would be OK?
Got €25,000?

That is 5% (more in reality) added to your, and every one else's management fee.

Perhaps a property in negative equity and owner goes to Australia, perhaps leaving a dilettante tenant. THE management company would never get their money.

I'm don't know why you want to argue each point with me. Of course a fire is not ok, but neither is clamping.

Mods, this thread can be closed, I am not interested in defending why I feel a heavy handed imposition of thuggery is morally wrong, I simply wanted to know the legal position which has been answered.

Thanks to those who gave a constructive response.

Bepolite

username123 wrote: »

I'm don't know why you want to argue each point with me. Of course a fire is not ok, but neither is clamping.

Mods, this thread can be closed, I am not interested in defending why I feel a heavy handed imposition of thuggery is morally wrong, I simply wanted to know the legal position which has been answered.

Thanks to those who gave a constructive response.

Rarely are threads closed in LD, the purpose of this forum is not to provide legal advise but for threads to stimulate discussion. Like it or not, you've succeeded despite yourself!

The temptation to necro-post in the necrophilia thread is growing again!

My 2 cents is I'd rather have clamping than have to take non-payers to court but as shareholders you have voting rights, exercise them as you see fit.

Grolschevik

This forum isn't really the place for it, but I for one would be interested in a discussion about why clamping is intrinsically morally wrong, as opposed to, say, reneging on your contractually agreed management fee obligations...

Bepolite

Grolschevik wrote: »

This forum isn't really the place for it, but I for one would be interested in a discussion about why clamping is intrinsically morally wrong, as opposed to, say, reneging on your contractually agreed management fee obligations...

Call it the jurisprudence of clamping :P

godtabh

username123 wrote: »

They've done it to enforce non payment of fees for a small number (less than 10) of persistent non payers. I suspect it's being done as a small revenue stream also but no one is admitting it out loud.

we make no money from clamping. I'd question your motives as to why you want to remove the new regime if you have paid your fees. If you have there is no issue for you.

Peregrinus

Username123 objects to clamping on principle, and I can understand that.

Still, if it comes down to introducing clamping on the one hand or letting the insurance lapse on the other, legally the directors have no choice. It's a very clear breach of their duty as directors to let the building insurance lapse, and in no way could they be excused from the breach (or from liablity for it) on the plea that introducing clamping would have been very unpopular. Ultimately the directors duty is not to do what the shareholders want; it's to act in the best interests of the company. From that perspective, choosing between letting the insurance lapse and introducing clamping is not choosing between two equally undesirable evils.

Of course, it's an oversimplification to think that the choice is between letting the insurance lapse on the one hand and introducing clamping on the other. Granted that the directors have to fund the maintenance, insurance, etc of the property and they have a duty to collect what is due to the company as efficiently and effectively as possible, clamping is not the only enforcement method open to them. They have a duty to consider other enforcement options, and the distaste that some or many tenants feel for clamping is a matter they can certainly take into account in deciding how they ought to proceed.

cookie1977

Going legal on debtors costs money to the development and thus the owners. I'm a director of our complex and we have discussed use of this before. We have not brought it in solely because we have extremely low debtors thankfully but if that changed we would reconsider it. It's cheap and effective.

I would add that if this issue does really matter to you in a significant way and you go and get the directors off the board or reverse their decision you need to think of the consequences.

In most complexes running them falls to a few people who always show up to do the job. Based on your complexes decisions it sounds like the board are doing their best to protect your asset by taking this move. What will you do if you do eject the directors? Are you willing to get heavily involved in running the complex to the same standards? Attend budget meetings and make decisions on how the complex is run? Answering emails and periodically tendering for management companies?

You should consider this issue in its entirety as it could have other consequences you haven't planned for.

billy few mates

Thanks to those who gave a constructive response.

Don't mention it....

Santa Cruz

username123 wrote: »

I absolutely do not welcome any move at all. Private clamping is morally wrong IMO. I do not wish to live in an environment that sponsors extortionate thugs to bully the residents. No way.

Clearly you have had a "clamping experience"
Surely if people park in properly allocated parking they cannot be clamped. Certain owners are not paying management fees and are sponging off those that do. These are invariably investment properties where rent is being paid every month. As regards refusing access to the bin area all that will do is lead to illegal dumping around the complex.
The issues can be raised at the A.G.M. but the Directors have been elected to manage the complex. Do away with control of parking and you will just have a free for all. In many cases people have bought their parking spaces for considerable sums and are entitled to come home and find their space available to them.

Thoie

Santa Cruz wrote: »

Surely if people park in properly allocated parking they cannot be clamped.

One of the problems, which username123 has alluded to, is that sometimes clampers, being human, get things wrong. That's understandable, however invariably even when they realise they're wrong they stick to the script of "pay us the money, then appeal". This is extremely unsatisfactory, as the general perception is that no-one wins their appeal.

That's why I'd recommend that the contract with the clampers include a clause wherein the managing agent can authorise a declamping without charge. That way if you were clamped accidentally you could ring the agent, who could check the records, see you're up to date with your payments, and authorise a declamping.

Redsoxfan

I received a letter yesterday telling me that clamping is to be introduced in the development to enforce non payment of fees.

Can I just ask:

• is it the cars of those who haven't paid their management fee that will be clamped?
• or is it just those who are parked without a permit who will be clamped (and can you get a permit without paying your management fee...)

Paulw

Redsoxfan wrote: »

Can I just ask:

• is it the cars of those who haven't paid their management fee that will be clamped?
• or is it just those who are parked without a permit who will be clamped (and can you get a permit without paying your management fee...)

Hopefully the OP will come back and answer, but the common scenario in developments is that any vehicle parked without a valid permit on display is clamped, and permits are only issued to units who have paid their management fees or have a payment plan in place.

Peregrinus

Paulw wrote: »

Hopefully the OP will come back and answer, but the common scenario in developments is that any vehicle parked without a valid permit on display is clamped, and permits are only issued to units who have paid their management fees or have a payment plan in place.

And can you then get the clamp released on payment of a declamping charge, or do you have to pay (or arrange to pay) your management fees?

Paulw

Peregrinus wrote: »

And can you then get the clamp released on payment of a declamping charge, or do you have to pay (or arrange to pay) your management fees?

You get the clamp released on payment of the clamping charge. However, if you continue to park there you are liable to be clamped again, and again.

Then once fees are paid, you get your parking permits.

hullaballoo

Moderator: this is not a debate about the morality/ethics/legality of clampers. It is about what company directors can or cannot do.

trad

Just my 2c worth.

It occurs to me that there might be Data Protection issues here with personal information relating to tenants who have not paid their managements including details of their vehicles being passed on to a third party (clamping company).

Has anyone involved explored the use or misuse of personal data?

username123

Paulw wrote: »

Hopefully the OP will come back and answer,

I did come back and answer but mods deleted it.

Robbo

trad wrote: »

Just my 2c worth.

It occurs to me that there might be Data Protection issues here with personal information relating to tenants who have not paid their managements including details of their vehicles being passed on to a third party (clamping company).

Has anyone involved explored the use or misuse of personal data?

Management company issues permits, permits displayed on cars. Clampers clamp anyone without a permit, regardless of whether they're owners who haven't paid or randomers who parked up looking for free parking. All the clampers are going on is the presence (or not) of a permit on the car. I fail to see any Data Protection issue if it's done correctly. Supplying the clampers with a list of deadbeats would possibly present an issue, but it would be the most stupid way of doing things as you wouldn't know which cars to go after.

Back to the OP, if you want to influence this policy get on the board. It's that simple. Hell, if you check the Memo and Arts, you may even be able to be co-opted on without the need of an AGM/EGM if you have consensus.

Lantus

username123 wrote: »

Its hardly like its clamping or nothing, there are other options.

yes but as a company director the decision making process will be a balance of cost versus time and effort compared to the return.

You could engage in legal action at say 300-500 per unit owner and get a judgement against them. ten people means you will need 3000-5000 in cash up front to do this. While you should always work on recovering legal costs there is no guarantee that you will. The members will have to absorb this cost. More legal cases may be needed to enforce payment. Budget 10k to be sure.

Gate & Key fob changes can mean changes to the entire system which again requires massive cost. If you have estate agents managing several properties then expect keys to move around behind your back from payers to non payers.

Clamping has no upfront cost to the company and its members and so in many ways it should be welcomed as a low cost and effective measure to get determined non payers to ensure they comply with their legal requirements. It doesn't add any cost to fee paying members and so the directors have made sure that fee payers like you are not penalised while they try to use other options. Sounds like a intelligent and caring group of directors who are using a scalpel rather than a bludgeon tool.

The alternative is that you add 10-30% onto your service fee for the next 1-3 years so you can afford more legal or building work to get those who don't pay. How fair is that? If you wan those 'other options' then contact your director team and advise them that you want to see service fees rise dramatically at your personal expense to pay for these other options.

trad

Robbo,

I was posting on the basis of the OP post which makes no reference to the issue of permits. AS you say "if done correctly" there should be no issue

Lantus

trad wrote: »

Just my 2c worth.

It occurs to me that there might be Data Protection issues here with personal information relating to tenants who have not paid their managements including details of their vehicles being passed on to a third party (clamping company).

Has anyone involved explored the use or misuse of personal data?

Under the MUD act the company is legally required to be provided with all tenants name if the unit is rented and other information the company needs which would include license plates. Providing a license plate to a third party would not constitute a data breach as far as I can see as no financial or other data is connected to it.

I would imagine that the process will be undertaken via a displayed permit system so any clamper will undertake their duties based on the permit being displayed and correct or not and not from information received from the company.

username123

There are no permits.

We have to provide our reg plates numbers. When we have a visitor we have to phone, at our own cost, the clampers and provide the visitors reg plate.

It has not been described how a non payers car is to be identified if they do not provide the reg plate.

It has not been described how my car is to be identified as a payer if I do not provide the reg plate.

It has not been described how mistakes would be rectified or how to contact the property management agent outside of 9-5.

trad

Given that there are no permits issued and the tenant provides registration details of their vehicle to the Management company, then possibly the passing on of the vehicle details to a third party for clamping indicates in my humble opinion the passing on of financial information regarding the owner of the vehicle and may be a breach of the Data Protection Acts.

Example: owner comes out of residence to find car being clamped by clamper.
Owner asks why car is being clamped. Clamper says "You haven't paid your fees". Clear case of passing on personal information to a third party.

However there are far more eminent legal brains on this forum.
Like I say just my 2c worth

Thoie

username123 wrote: »

It has not been described how a non payers car is to be identified if they do not provide the reg plate.

It has not been described how my car is to be identified as a payer if I do not provide the reg plate.

You're not being identified as payers/non-payers, the cars are either on a white list or not. Anyone who doesn't provide their reg (paid or not) will be clamped. Non-payers who provide their reg may still be clamped. No data protection issue, as the clampers only know if the car is on a whitelist or not. If a car is not on a white list, it doesn't mean it's a non-payer, it just means it's not recognised (could be a random person parking there).

trad wrote: »

Given that there are no permits issued and the tenant provides registration details of their vehicle to the Management company, then possibly the passing on of the vehicle details to a third party for clamping indicates in my humble opinion the passing on of financial information regarding the owner of the vehicle and may be a breach of the Data Protection Acts.

Example: owner comes out of residence to find car being clamped by clamper.
Owner asks why car is being clamped. Clamper says "You haven't paid your fees". Clear case of passing on personal information to a third party.

However there are far more eminent legal brains on this forum.
Like I say just my 2c worth

In your example the clamper doesn't know you haven't paid, they just know you're not on the list, which could be for a multitude of reasons.

Paulw

username123 wrote: »

We have to provide our reg plates numbers. When we have a visitor we have to phone, at our own cost, the clampers and provide the visitors reg plate.

If the clampers have been given the license plates of those who have paid, and they advise the clampers of the license plate of any visitors, then those vehicles should not be clamped.

username123 wrote: »

It has not been described how a non payers car is to be identified if they do not provide the reg plate.

It has not been described how my car is to be identified as a payer if I do not provide the reg plate.

If the clampers do not have the license plate (white list), then the vehicle will be clamped.

Seems simple and clear to me. If you want to be stubborn, then you must face the consequences.

username123 wrote: »

It has not been described how mistakes would be rectified or how to contact the property management agent outside of 9-5.

Do you not have an emergency contact number for the management agent? What happens for major emergencies outside of office hours? But, maybe due to people not paying fees, there is no budget for out of hours service for your management company. :rolleyes:

In such a situation, I assume you would have to wait until office hours to try to get the situation resolved.

In our development, there is a clear and documented procedure - during office hours you call the management agent office number, for out of hours emergencies you call the emergency number (call centre) who handle the call and redirect it to the appropriate person/service.

We have had vehicles clamped in error, and these errors are dealt with by the management agent, and if needed, escalated to the board of directors of the management company (of which I am one). If an error has been made, then the declamping fee is paid, and is then reimbursed from the management company, and then the issues is handled between the management agent and the clamping company to see where the error was made.

The directors of the management company must do all they can to ensure fees are paid and that the development is run properly. They want to make sure that the running costs are as low as possible, while providing a quality service. This is never an easy task. Everyone wants lower management fees, but yet also wants a high quality of facilities and services. People moan about things but yet "don't have the time" or couldn't be bothered to make an effort to be productive and help out. Being a director is a thankless task, but it has to be done, and that's where the hard decisions are made.

If you don't like how your development is run, then do something about it - become a director.

hullaballoo

Moderator: Just for clarification, this is the OP:

I am an owner occupier in a managed apartment complex.

I am fully up to date with fees and attend all AGMs.

I received a letter yesterday telling me that clamping is to be introduced in the development to enforce non payment of fees. I phoned the managing agent to find out under whose authorisation this has been brought in and was told the directors decided on it and it requires no majority vote of owners.

Is this true? What can I do to reverse this? I have already stated I want a meeting called of all owners. However the managing agent continued to tell me that legally there is nothing I can do.

As we can see, the thread is no longer discussing the initial query raised. If people wish to discuss issues outside the scope of the thread topic, please start a new thread in relation to the topic.

Thread closed.