How to dismiss boards of owner's property management company

cican

The residents of the complex are not happy with the management of current board directors.

The first director is trying to put family member involved in some management projects and getting certain amount of money, he was asked to step down by around 50 residents during an informal meeting the other day, however the director refused to resign, since the rest of other directors(3 directors) are the friends of first director, it seems it is very difficult to get rid of him.

Are there any options that we residents are able to fire the director?

Paulw

For your reading - http://www.irishstatutebook.ie/1963/en/act/pub/0033/sec0182.html#sec182

cican

@Paulw: thanks for the link.

To be honest, i have problem understanding those terms in the company act, could someone explain a bit more in plain language?

Pro Hoc Vice

cican wrote: »

@Paulw: thanks for the link.

To be honest, i have problem understanding those terms in the company act, could someone explain a bit more in plain language?

The people to remove any director are not the directors but the shareholders. The Memos and articles of the company will set out exactly how to do what you want. Write to the company sec. For copy of same or get a copy from companies house. Call a EGM and get all the members of the company to turn up and vote. You would be best advised to get proper advice on this.

cican

@Pro Hoc Vice: Thanks for the reply.

The EGM usually is called by the director, shareholders may also demand that the directors call an EGM. In our situation, the director is likely refuse the request.

Paulw

cican wrote: »

The EGM usually is called by the director, shareholders may also demand that the directors call an EGM. In our situation, the director is likely refuse the request.

http://www.irishstatutebook.ie/1963/en/act/pub/0033/sec0132.html#sec132

If you get enough people together then the director cannot refuse to call an EGM. If he refuses then he is in breach of the Companies Act and can be held liable.

Just keep in mind that if they were directors since 2011 then they have to step down this year

Santa Cruz

Directors are elected at the A.G.M. The whole area of apartment management companies has been a history of dodgy dealings, backhanders to friends of the builders, builders nominating their own directors etc. Sadly too many owners dont take an interest in the company which they are shareholders. I would suggest getting a meeting called of interest owners and put a plan in place to take proper control of your company. Then either employ a reputable "Management Agent" to manage the complex on your behalf or elect your own Directors who will do so on a voluntary basis. It may seem like a lot of work but with the right team it is not that difficult.
However if the complex is above 50 apartments or so I think you should employ a Managing Agent

cican

Thank you all for the input.

The directors were elected on 2012. Looks if we can not fire them now then have to wait until next year.

Pro Hoc Vice

cican wrote: »

Thank you all for the input.

The directors were elected on 2012. Looks if we can not fire them now then have to wait until next year.

Why not?

Paulw

cican wrote: »

Looks if we can not fire them now then have to wait until next year.

If you take time and read all the posts above, you will find that you CAN fire them.

Peanut2011

Sorry to piggy back on this but I think I'm in a similar position. The question over the 3 year term. Can they be re-elected to another 3 years straight after this term?

Peanut2011

Peanut2011 wrote: »

Sorry to piggy back on this but I think I'm in a similar position. The question over the 3 year term. Can they be re-elected to another 3 years straight after this term?

You can fire them tomorrow if you want to. The three years things is just an automatic provision of the multi unit developments act.

And yes, they can be re-elected in the normal manner

Peanut2011

Deleted User wrote: »

You can fire them tomorrow if you want to. The three years things is just an automatic provision of the multi unit developments act.

And yes, they can be re-elected in the normal manner

Thanks. I know regarding dismissal and what is required to do so. The problem is when the majority of people attending the AGM are the ones connected with the board and the rest don't turn up.

As such it is easy for them to be re-elected.

Paulw

Peanut2011 wrote: »

Thanks. I know regarding dismissal and what is required to do so. The problem is when the majority of people attending the AGM are the ones connected with the board and the rest don't turn up.

As such it is easy for them to be re-elected.

Then your job is to contact enough concerned people who will attend, or who can give their proxy vote to someone attending. Knock on doors, make calls, send emails ... get active. You may be surprised. Too many people want to leave it to someone else.

Lantus

You don't actually fire directors. What you can do is seek to appoint new directors to replace them. An OMC must always have the legal number of directors as required under its articles and company law or else it will be struck off (highly undesirable!)

If the existing directors are unwilling to appoint new ones then the best place to get new ones appointed is an AGM in normal operation. You need to write to the company prior to the AGM announcing an intention to become appointed. It needs to be raised at the meeting and a motion proposed and voted for by the members present who are eligible to vote (that means usually that people need to have paid their service fee because their votes can be discarded if they are in arrears subject to your articles.)

you need to either be ready to step forward yourself or galvanise others to do so to meet the challenges ahead.

wanting to get rid of bad directors is understandable but just 'noise'. Until members step forwards into the breach and step up to the challenge its just pub talk. The rest is just process. Know the law, the MUD act and your articles. Have them printed, read them before you go to bed and have them in hard copy at the meeting.

Redsoxfan

Do Developers typically have 'Golden Share' entitlements so that they effectively control the board and company even if all property owners are shareholders? Or has recent legislation dealt with this? (I seem to recall that this was the case when I was involved in the management company in a development back in the good old days - I may even have been a director, I can't recall)

hullaballoo

Redsoxfan wrote: »

Do Developers typically have 'Golden Share' entitlements so that they effectively control the board and company even if all property owners are shareholders? Or has recent legislation dealt with this? (I seem to recall that this was the case when I was involved in the management company in a development back in the good old days - I may even have been a director, I can't recall)

http://www.irishstatutebook.ie/pdf/2011/en.act.2011.0002.pdf

This was changed in the above Act.

"OMC" in the post above yours is short for "Owners' Management Company" which is a clue to the ownership of the company!

Iurista

cican

I had a similar situation about 3 years ago, where the orinigal developer was still the director & secretary of the Owner's Management Company and the Managing Agent did all his bidding. The other director of the OMC was an employee of the developer.

Get a copy of the memo & arts on-line form the CRO website for 2 reasons:

1. You want to check what the arts say about requisitioning an egm under S.132 of the CA, 1963; and
2. See what it say about voting rights of members who have not paid their service charges up to date.

Under S.132, 10% of the paid up share holders can requisition an EGM of the company.
Get 10% plus of your owner/members of the OMC
Draft a notice addressed to the Board of Directors and call on the Board to convene an EGM seeking to pass whatever resolutions you see fit:

I said: "THAT in accordance with Section 182 of the Companies Act 1963 (as amended) JOHN DOE of x, y & z be removed from office as a director of the Company with immediate effect". This can be repeated for each director you want removed.

You then would have further resolutions on your notice stating:
"THAT in accordance with Section 181 of the Companies Act 1963 (as amended) JOE SOAP of x, y & z be appointed as a director of the Company with immediate effect".

You ask them to convene the EGM within 21 days, if they don't hold the EGM, you and your fellow members can go ahead and hold it.

The resolutions above are ordinary resolutions.

Lantus

Iurista wrote: »

cican

I had a similar situation about 3 years ago, where the orinigal developer was still the director & secretary of the Owner's Management Company and the Managing Agent did all his bidding. The other director of the OMC was an employee of the developer.

Get a copy of the memo & arts on-line form the CRO website for 2 reasons:

1. You want to check what the arts say about requisitioning an egm under S.132 of the CA, 1963; and
2. See what it say about voting rights of members who have not paid their service charges up to date.

Under S.132, 10% of the paid up share holders can requisition an EGM of the company.
Get 10% plus of your owner/members of the OMC
Draft a notice addressed to the Board of Directors and call on the Board to convene an EGM seeking to pass whatever resolutions you see fit:

I said: "THAT in accordance with Section 182 of the Companies Act 1963 (as amended) JOHN DOE of x, y & z be removed from office as a director of the Company with immediate effect". This can be repeated for each director you want removed.

You then would have further resolutions on your notice stating:
"THAT in accordance with Section 181 of the Companies Act 1963 (as amended) JOE SOAP of x, y & z be appointed as a director of the Company with immediate effect".

You ask them to convene the EGM within 21 days, if they don't hold the EGM, you and your fellow members can go ahead and hold it.

The resolutions above are ordinary resolutions.

Be sure to know what your company's requirements are if you intend to hold an EGM as the minimum number of people that need to attend and vote may vary from a few to a large percentage of the estate.

IF you intend to go down this route first thing you need is the members register to write to and contact every member. You can request this in writing from the company giving reason why you want it and legally they are required to provide it. Failure to do so is an offence under company law and the ODCE can be notified of such.

EGMs follow the same process as an AGM so ensuring you provide the minimum of 21 days legal notice (including postage time allowance) and notify the existing directors (normal post and registered advised and in person with witnesses also advised)

The ODCE handbook on their website for OMCs is now your new friend. Read this inside and out as to the process of director replacement and how to run an AGM/EGM.

Failure to follow procedure can void your efforts legally so ensure you do it by the numbers.

cican

Thank you again for all your input.

Things are not going to be easy, the director is currently holding the management bank account, and have his name on the statement(nobody knows when and how he did it). He is the only one can access account with payments now. Don't think he is willingly to transfer the account to other shareholders when he is forced to step down. And it takes time and money to go to the court.

Santa Cruz

cican wrote: »

Thank you again for all your input.

Things are not going to be easy, the director is currently holding the management bank account, and have his name on the statement(nobody knows when and how he did it). He is the only one can access account with payments now. Don't think he is willingly to transfer the account to other shareholders when he is forced to step down. And it takes time and money to go to the court.

If it is a situation that the Company Bank Account has only one signatory then I would advise acting very quickly to get that matter rectified.

Lantus

cican wrote: »

Thank you again for all your input.

Things are not going to be easy, the director is currently holding the management bank account, and have his name on the statement(nobody knows when and how he did it). He is the only one can access account with payments now. Don't think he is willingly to transfer the account to other shareholders when he is forced to step down. And it takes time and money to go to the court.

generally you need a signed letter from the previous director to transfer names. Additionally the change of director forms also need signing. Maybe contact CRO first but I would have all documents ready at AGM/EGM and make sure this guy does not leave before they are singed. Contact bank and try to get a stop placed on it temporarily until names can be changed.