Management company spending

dori_dormer

Just a quick question. I own one of 4 apartments in a block. All 4 owners are directors in the management company.

So the budget for 2014 was set out last year. We all agreed the building desperately needed painting, so we all agreed to pay an increased amount to get it done ( no sinking fund but this is to be rectified soon) it's an expensive job that needs scaffolding etc due to location of building.
I was on to the secretary over something else during the good weather and asked when he'd organised the painting. He seemed to have forgotten and just said, ' oh yes I wonder if there's still money in the budget to do that this year...'

So question is can he spend that allocated money on something else? No emergency has come up or anything. All bils are steady. we discussed new Lighting too butnothing was set in stone. I'm pissed off as planned to sell soon too and place looks like crap. I won't be pleased having to pay increased charges next year too just to get it done.

Any advice / laws to help me out?

Thanks!

davo10

Advice: Ask secretary what the money was spent on.

Paulw

If all 4 owners are directors, then a director can ask to see the full accounts - invoices, payments made, etc.

dori_dormer

Yes sorry I know I can ask to see the accounts, but if this years money is spent, it's spent.

I'm really just wondering if there's any laws / rules stating the money HAS to be spent on what was agreed in the budget.

I paid extra to have the place painted this year not next year.

athtrasna

Who has the authority to sign cheques?

dori_dormer

the secretary and one other I think in our case. I was secretary before. Not sure if my name was taken off, when his was put on or anything. He has the cheque book anyway!

davo10

dori_dormer wrote: »

the secretary and one other I think in our case. I was secretary before. Not sure if my name was taken off, when his was put on or anything. He has the cheque book anyway!

Not trying to be smart, but how do you know it wasn't necessary to spend the money on something else if you do not know yet what it was spent on and why?

Did you get quotes and agree a price with a painting contractor before you paid the increased rate this year? Is it possible that other costs (insurance, repairs, electricity in common areas etc) increased this year over last? Maybe before checking on your legal rights, ask the secretary for a breakdown of the money spent this year, you will be in a better position to decide if expenditure was necessary or wasted.

Unless the money was used for personal gain by one of the other owners, it stands to reason that it was used for the benefit of the collective.

dori_dormer

I asked on the phone if the money had gone to something else but he didnt really reply. I dont know how 800 could disappear. We got a price from a contractor and handed that over to the secretary on top of the regular yearly costs ( which include all bills + about 300 extra for things like bills being a little higher etc.)

If there is a big emergency spend he has to get approval/ inform all of us as we are going to get the bill directly as there is no sinking fund. So if there was a big send, I would have been called. The only thing I can think of is he went out and bought all the lights or something that we had discussed for next year.

Or its possible hes just being lazy and forgot to organise the painting.

I just didnt want to call him again as he takes it very personal if you seem to be telling him how to do his job. And with such a small company you dont want to piss anyone off. Its easier if you have the law on your side as he cant really refute that.


I think ill just have to call him and ask again when its being done.

Thanks all

Paulw

dori_dormer wrote: »

And with such a small company you dont want to piss anyone off. Its easier if you have the law on your side as he cant really refute that.

But, you're a director and member of the management company, so are fully entitled to know exactly what the money is being spent on. I'm not sure where your confusion lies. Just ask for a straight answer.

jd

dori_dormer wrote: »

..and handed that over to the secretary on top of the regular yearly costs ( which include all bills + about 300 extra for things like bills being a little higher etc.)

I presume when you say "handed over" you mean you gave him a cheque made out to the OMC?

dori_dormer

jd wrote: »

I presume when you say "handed over" you mean you gave him a cheque made out to the OMC?

yes of course. all above board.


I just want to make as few waves as possible. The secretary is quite difficult to work with. It took me 4 months to get a receipt from him last year. He never does anything illegal, just makes things very hard and long and drawn out. Doesnt help that hes mates with another owner so if he takes a disliking to you they can gang up n you in meetings etc.

davo10

dori_dormer wrote: »

yes of course. all above board.


I just want to make as few waves as possible. The secretary is quite difficult to work with. It took me 4 months to get a receipt from him last year. He never does anything illegal, just makes things very hard and long and drawn out. Doesnt help that hes mates with another owner so if he takes a disliking to you they can gang up n you in meetings etc.

Give the fourth guy a call and explain your concerns, he might be as anxious as you are and 2 v 2 is a lot better than 1 v 2.

Has the management company been legally set up and do the articles which you agreed to bind you to paying management fees agreed by the majority. This is important as if you wish to sell your property next year, the solicitors will look for confirmation from the management company that every thing is in order.

Lantus

as a director you have just as much responsibility and power as anyone. People who pussy foot around and don't want to ask questions or feel they might hurt someone's feelings in my opinion don't make good directors. You need to step up and do what needs to be done for the best interests of the company.

Ask for the accounts or suggest that a director meeting be held soon to review spending and query why painting has not been done. If you don't know what is going on in the company then you are a bystander not a director.

Budgets are road maps as to how money will be spent and not legal contracts that allocate specific spending requirements. If the money was needed elsewhere then that's fair enough. Depends what it is though! Buying plant pots might not be a valid reason but maintaining a fire alarm would trump painting for example.

You need and are entitled to information. Get the other director on board if necessary and then take a lead on resolving this.

In the future why not suggest that the directors get the operating accounts emailed to them every month (assuming he uses excel or similar) so you can all see what's going on without the need to chase each other around.

dori_dormer

yes everything in that department is fine and above board. Place is 25 years old. The 4th owner is very old and frail and has had such a bad time with the secretary that she refuses to get involved with anything. Just pays her fees when the bill arrives and thats it. doesnt come to any AGMS or that and wont pick up the phone to any of us. So its just the 3 of us at them. So if I make too many waves its 2 against 1.

Its tough being in a small development!