|It is important that all owners appreciate the necessity for a Management Company as part of the legal, day-to-day structure in multiple unit developments, whether they are apartment blocks, town houses, retail or office developments.
All common parts and services within any complex, not belonging to or the responsibility of a specific person, must be vested in a body or company. These common areas may be internal and/or external.
Each owner is a Member (or shareholder) in this Company. The Company has responsibilities to all the members to ensure that the common parts are maintained to a high standard for the enjoyment of all concerned.
The Company (in effect, the residents’ or owners’ Company) is responsible for the maintenance and upkeep of all open spaces and services relating thereto. If it is an apartment block, the company is also responsible for the upkeep and maintenance of the buildings and grounds. The full responsibilities of the Company are outlined in the Company’s Memorandum and Articles of Association, and in the Management Agreements attaching to the Title documents.
Similarly all owners individually have a co-responsibility to the Company to perform certain obligations as set out in the Management Agreements, including payment of service charges.
Thus, the Management Company has clear responsibilities to all of its Members and the Members have definite responsibilities to their Management Company and to each other.
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|The Company, like all limited companies, is managed by a Board of Directors or a Board of Management. It would not be possible to have all owners of an apartment block on the Board, so six are normally chosen to represent all and these are voted in at the Annual General Meeting each year. At the beginning, until all the units in a development are sold, the Board of Management normally comprises of the developer and/or their solicitor, or solicitor’s staff.
When all the units are sold, the control of the company is handed over to the owners themselves who elect their own Board.
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The Multi-Unit Developments Act 2011 (the “Act“) was signed into law by President McAleese on 24 January 2011. Sections 14 and 32 of the Act took effect on 24 January 2011 and the other provisions of the Act are to set to come into effect upon the introduction of subsequent commencement orders later this year. Sections 14 and section 32 provide for a legislative structure of owners management companies (“OMC“) and restrictions on the entry by the OMC into certain contracts respectively. It is section 15 of the Act that deals with the structure of OMCs of existing, as opposed to, new developments.
It should be noted that under the Act, the developer must transfer the legal ownership of the common areas (or relevant parts) of a development to the relevant OMC prior to the disposal of any units in the development or where the development in question has already been completed, the developer must transfer the common areas to the OMC within 6 months of the Act coming into force.
The Act applies to mixed unit developments in addition to residential only developments.
Key points to note:
(i) the OMC must be set up at the expense of the developer in a new development;
(ii) the developer must indemnify the OMC in connection with any losses or damages arising and suffered by the OMC due to any acts or omissions by the developer during the development stage;
(iii) section 18 makes clear that all service charges are to be agreed by members at an annual general meeting of the OMC;
(iv) section 19 deals with the subject of an OMC’s sinking fund. It is compulsory to establish such a sinking fund and the Act sets down that each unit shall discharge an amount of €200 per annum (or such other amount as may be agreed by the members) to the sinking fund.
(v) no OMC may enter into a contract with a contractual period in excess of three (3) years or where a contract provides for a penalty payment where the contract is terminated by an OMC after a period of three years.
If you have any queries in connection with the above, do not hesitate to contact email@example.com
This note is not indended to act as legal advice but is for information purposes only.
The multi unit development bill comes in force as of the 1st April ending the stranglehold over residents in multi unit developments. Under the act, among other requirements, developers will be forced to hand over common areas and control of the management company.
From the 30 September, developers will be legally obliged to handover common areas and control of management companies allowing residents take control how the management company is run and who to appoint as managing agents. This legislation will make managing companies directly responsible to the residents allowing greater transparency and lower costs as competition opens.
The bill includes a number of other areas concerning living in multi unit developments providing instructions on how management companies are run. To find out more about the bill see www.blockmanagement.ie or call 012871905.
If you are interested in becoming involved in your management company and wish to find out how savings can be achieved, call our office for a no obligation quote on your service charges.
See post on department of Justice website http://www.justice.ie/en/JELR/Pages/Multi_Unit_Act
Are you a director and looking to hire a new managing agent? As a Director and as an owner in your development, you want to ensure that the managing agent you select carries out what is expected of them. A poor choice of managing agent can have a long lasting negative effect on the development which may take years to repair. As a managing agent, Kennedy Wright have posted a few questions you might want to ask any potential managing agent. While not exhaustive, it will help in finding out whether an agent has the capability to meet your requirements and minimise any risk to your development and home. Best of luck with your selection and feel free to ask a question.
- Please provide all relevant company details, including the names and qualifications of all directors and a list of proprietors if not a quoted company.
- Will your fees carry VAT?
- How close are your offices to our property?
- How many years have you been in the property management business?
- How many staff in your company are involved with management?
- How many blocks do you manage, and how many units therein?
- Please supply three references for blocks you manage. Ideally these should be similar to our own property and in our area.
- Please supply name and telephone number of chairman/secretary of the managing companies in those blocks.
- What is your fee structure?
- How can you convince us that you can offer a quality service at a fair cost?
- How comprehensive a panel of contractors do you have?
- Do you charge a fee for contractor selection and/or a percentage of their charges for:
- Contractors chosen by you?
- Contractors chosen by us?
- What selection criteria do you use for contractors on your panels?
The office of the Director of corporate enforcement has issued a detailed Company Law Handbook on Residential Property Owners’ Management Companies. This is a guide for management company directors and property owners to provide guidance on their responsibilities and obligations.
These pdf documents are available at the following link
or by contacting Kennedy Wright Estate and Managing Agents at 01 287 1905 or www.blockmanagement.ie
Feel free to contact our office at firstname.lastname@example.org or call 01 287 1905 for more information or a free budget audit to find out how Kennedy Wright can help you achieve savings without a loss in service.
Is the AGM important?
An Annual General Meeting is arranged by the Managing Agent, on behalf of the Management Company to review the previous year’s activities, and discuss and agree plans for the following year.
It is very important to attend the AGM, as this is the resident’s chance to have a say in the running of the development. All owners are given notice of the time and location of the AGM 2at least 21 days in advance.
Only owners are entitled to attend the AGM, and those whose accounts are not in arrears are entitled to vote on motions raised. The resolutions agreed are binding on all members.
All comments welcome.
BlockManagement.ie includes in its customised service package:
2. Lower management fee without loss in frequency or quality of services provided.
3. Discounted fees for landlords letting their property to include rent assurance, tenant vetting and emergency call out service.
4. Discounted fees for residents looking to sell their property including our full BlockManagement.ie marketing package.
5. Service to provide list of vetted tradesmen to all members at discounted rates exclusive to BlockManagement.ie clients.
6. Yearly review of all contracts and a signed declaration that no surcharge or commission – in cash or in kind – has been received by BlockManagement.ie in the selection of contractors to carry out works on behalf of the Property Management Company.