Advice needed on my 1st mgmt company AGM

gebbel

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I'm an owner occupier of an apartment in a small development of 16 units, made up of 8 units per block. I have never bothered attending an AGM before but will go next week to voice my concerns and dissatisfaction with certain issues. The main ones being:

1. I believe 6 of the units are not paying mgmt fees and want to demand that more be done to pressurize the owners.

2. The blocks need an external coat of paint but the word is there is no cash.

3. Furnished accounts for last year show stationary costs of €1000. A couple of letters are posted out per year and the accounts info once per year. Why can't they be dropped in etc....does paper really cost that much? I want clarification on this. A grand may not get the paint job done would be a good start.

The AGM will also discuss a new director being appointed. I don't want to make a show of myself but I want my voice heard without taking over the meeting.

Not sure what my question is now.....just ask them for answers is it?

Cheers
 
6 units not paying their fees from a complex of 16 units is very serious especially if it continuing over a number of years.

Do you know what the management company has done to recover the fees? Are the units owner occupied or rented? Have the management company looked at appointing a rent receiver?

If the block painting is purely aesthetic, it is understandable that this would not be done when 40% of the management fees are not being paid.

With such a small development and your interest in it's running, the directors should encourage your involvement in the board/ committee to get the MC back on track.
 
I would advise submitting your questions to the managing co or agent in advance of the AGM so they can have answers to them.

They should be covering the debtors situation regardless as this is very important, the other two items could be logged and answered.

I am assuming you have an agent, perhaps it is just directors who manage it all.

If possible, I would advise you to volunteer to get more involved, offer to help and review the stationary costs to see if you can get a better quote or deal for them. It does seem a bit much for post updates. In our estate of 900+ units, the annual stationary is €5000.
 
I'm an owner occupier of an apartment in a small development of 16 units, made up of 8 units per block. I have never bothered attending an AGM before but will go next week to voice my concerns and dissatisfaction with certain issues. The main ones being:

1. I believe 6 of the units are not paying mgmt fees and want to demand that more be done to pressurize the owners.

2. The blocks need an external coat of paint but the word is there is no cash.

3. Furnished accounts for last year show stationary costs of €1000. A couple of letters are posted out per year and the accounts info once per year. Why can't they be dropped in etc....does paper really cost that much? I want clarification on this. A grand may not get the paint job done would be a good start.

The AGM will also discuss a new director being appointed. I don't want to make a show of myself but I want my voice heard without taking over the meeting.

Not sure what my question is now.....just ask them for answers is it?

Cheers


No doubt the budget or 2014 will provide insight into where the money gets spent. Block insurance being a priority and things like fire alarms, sinking funds, accounting, admin, CRO fee's, auditor being of a priority before the nice finishing touches like the flowers and paint which are the bits everyone want to see can be paid for.

Do you have an agent or is it directly managed (something that is becoming more popular nowadays as directors/residents take control of their developments and future.)

what is the arrears total? have your common areas been transferred?

We have 200+ units and our admin costs run at around €500 inc. postage.

Its understandable that people are angry but try to ask yourself what the solutions are? Is it enough just to complain? I'm sure that the directors are aware of the problems as will be most people. It is the creation of viable and workable solutions that is the challenge.

In terms of alternatives like dropping in letters who does all this work? There are a lot of directors that will invest hundreds of hours for free as its an unpaid position but people forget the scale of the work required and often believe that the fairies just do everything.

The workload of a director is like an iceberg from my experience. Over 90% lies below the surface making endless phone calls, getting quotes, writing letters, doing accounts, arranging meetings, dealing with problems and issues and regulations etc. An almost endless list of jobs many of which are recurring and unless your there next to them go unseen and un-thanked.

So; great that you are taking an interest in your company. But remember that the strength of that company lies in the collective power of its members to work together to achieve specific goals.

In terms of unpaid fee's these could be distressed properties or just genuine people in hardship or strategic 'players'. What does the development make up in terms of common areas and services allow you to do in terms of applying pressure. Is parking control an option?

If a person has lost their job and has no money then taking them to court to get a judgement may make no sense if they have money to pay you. The cost to get a forced sale or rent receiver which are additional steps are also cost hungry exercises and may not yield results. The directors may be saving money by not throwing thousands into legal holes where no recovery may be viable. Of course they may just have no balls or more likely no money as with reduced units there is no economy of scale and likely no money to invest in such a process.

I always find most anger stems from people having limited understanding of how the overall management company process works. Its not a perfect system even with the MUD act and in my opinion not enough power is in the hands of the company in particular with respect to service fee dodgers. There should be a simpler, quicker process where members fail to pay.
 
The AGM was tonight in a local pub and was an informal gathering of 7 owners, out of 16 units. I didn't know all but one of them well. One of the 2 outgoing directors was present. The revelations at the meeting were staggering. Allegations of financial impropriety, mismanagement of funds, monies paid to the 2nd director (who wasn't present and has recently resigned) for services rendered, €1400 in stationary charges last year for a few sheets of printed paper and 16 stamped envelopes (it all stank to high heaven). Many of us are guilty of failing to spot this years ago. I never even studied the account statements until 2 months ago and I'm here 6 years.

Some of the owners admitted to not having paid managment fees for years due to their suspicions, lack of transparency and communication. In hindsight they were right as some of their money would no doubt have been channeled where it shouldn't. The 'good' director who is also resigning told of how the other director routinely went solo on signing cheques and failed to inform her what they were for. She seemed honest but reminded me of the financial regulator we had during the boom. The block insurance is up to date but there is nothing, and I mean zilch in the sinking fund.

I was asked to be one of the new directors and I accepted. I have committed to try and find out more about the irregularities. Others have pledged to pay their outstanding charges once they feel more confident about the mgmt company.

I went there to vent and came home with responsibility I hadn't banked on, or don't know if I'm capable of delivering on. But it's good to know the crooks who ruled the roost are gone, and they should be made accountable if at all possible.
 
The AGM was tonight in a local pub and was an informal gathering of 7 owners, out of 16 units. I didn't know all but one of them well. One of the 2 outgoing directors was present. The revelations at the meeting were staggering. Allegations of financial impropriety, mismanagement of funds, monies paid to the 2nd director (who wasn't present and has recently resigned) for services rendered, €1400 in stationary charges last year for a few sheets of printed paper and 16 stamped envelopes (it all stank to high heaven). Many of us are guilty of failing to spot this years ago. I never even studied the account statements until 2 months ago and I'm here 6 years.

Some of the owners admitted to not having paid managment fees for years due to their suspicions, lack of transparency and communication. In hindsight they were right as some of their money would no doubt have been channeled where it shouldn't. The 'good' director who is also resigning told of how the other director routinely went solo on signing cheques and failed to inform her what they were for. She seemed honest but reminded me of the financial regulator we had during the boom. The block insurance is up to date but there is nothing, and I mean zilch in the sinking fund.

I was asked to be one of the new directors and I accepted. I have committed to try and find out more about the irregularities. Others have pledged to pay their outstanding charges once they feel more confident about the mgmt company.

I went there to vent and came home with responsibility I hadn't banked on, or don't know if I'm capable of delivering on. But it's good to know the crooks who ruled the roost are gone, and they should be made accountable if at all possible.

Well lets hope your tenure as director is rewarding and educational!

First things are to get your position lodged with the CRO and get the bank to cancel the cheque book and single signed operations. If he can sign off on cheques then so can she. We need two directors to sign on everything and it provides some oversight on everything.

Next get the accounts and see where the money went. If it cannot be accounted for then you could lodge a formal complaint with the ODCE if you can provide evidence of fraud or other serious offences. If your articles indicate that there should be no director salaries then the issue of money's paid is serious.

Try to get more people involved in sub committees. Remember that the financial stuff relating to arrears is data protection covered so never divulge it to anyone but a director.

get your directors insurance in place.

There are a hundred other things you can or need to do. Hopefully the other director will help and support you. If you don't have one write the ODCE and get a free hard copy of the guide to management companies, great night time read.

lastly on the bad director don't waste to much time trying to be detective. The law tends to protect company directors and you could invest hundreds of hours and get nothing, time better spent on moving forward. Make sure you write to all members outlining the changes and your new leadership and intention to improve with their support! Changes to the bank account and money strings will help put people's minds at ease. If you can get an email for each member you can communicate very cheaply and more often for updates and news.
 
You are a Director now so be sure that you have knowledge of your responsibilities. Information can be got from the Companies Office. Also be sure that you have access to a copy of your lease agreement to see what is and is not permitted.
16 units should not be that difficult to manage if a proper management structure is in place.
No arrears should be written off. A campaign to recover arrears should commence immediately. Give those in arrears one more opportunity to pay, outline what they owe and the interest rates applicable to arrears. Some will respond and pay. Others must be dealt with by solicitor.
Perhaps a cover letter explaining that a new management teams is in place and that plans are in place to redecorate the block etc. Nothing can be done without money and standard matters such as insurance, waste collection, cleaning takes priority. Look at where any costs can be saved. Use e mail to maintain lines of communication with owners and perhaps a quarterly update on matters would help
 
Rather than start a new thread I'll carry on here. I'll post some points relating to my involvement in the mgmt co. so far:

1. It turns out that 5 of the units are in arrears, averaging €600 each. Nobody owes in excess of €1000.

2. Having spoken to some of them, the majority stopped paying altogether in the last 3 years due to concerns about how the funds were being spent.

3. Some tenants want more investigation into the €1000 stationary fees of 2012. They cannot accept it.

4. The previous Director paid himself €450 in fees. The chequebook also shows him spending on credit for his phone. There may be impropriety here.

5. There is no money provided for a sinking fund. Units were built in late 2005. I'm there since 2007.

6. The previous directors were getting their mates to do odd jobs, like cutting lawns, and paying them plenty for it.

7. The accountant was charging €1200 for preparing the accounts. I called him to tell him that we will not be renewing his services. He has now offered to do the job for €500 plus VAT. I'm still shopping around here.

8. We were fined €100 plus an additional €3 per day (for 7 days) for the late submission of accounts to the CRO office.

All that can be said is now things are getting back on track. There will be no charges for stationary in 2014 and while I'm involved. I will print & hand deliver any correspondence myself voluntarily, or email where appropriate.
 
Great to see someone getting involved in their own management company.

All relevant points I think although I think your accountant is mad doing an audit for €500 plus VAT. I can't imagine you doing much better for an audited set of accounts.
 
This is quite a small mgmt co with 16 units. There can't be that many financial transactions to process or audit, with a bank account, 16 fee invoices per annum and a few supplier invoices per month.

What is the annual fee per unit here? I live in a 700+ unit development and my annual fee is ~ €1.5k.
 
Only 16 invoices and look at the issues:

1. It turns out that 5 of the units are in arrears, averaging €600 each. Nobody owes in excess of €1000. should there be a bad debt provision, correspondence with solicitors and review of minutes of directors meetings discussing the issue. Review leases to see if the management company has the power to withhold permission to sell to ensure payment.

2. Having spoken to some of them, the majority stopped paying altogether in the last 3 years due to concerns about how the funds were being spent. despite receiving the accounts every year and having the authority to remove the directors the default position is to stop paying fees

3. Some tenants want more investigation into the €1000 stationary fees of 2012. They cannot accept it. clearly the auditor should have reviewed and made an assessment about the validity of the expenditure

4. The previous Director paid himself €450 in fees. The chequebook also shows him spending on credit for his phone. There may be impropriety here.

5. There is no money provided for a sinking fund. Units were built in late 2005. I'm there since 2007. absolutely but the members are supposed to contribute €200 per annum to the sinking fund so the annual fee goes up

6. The previous directors were getting their mates to do odd jobs, like cutting lawns, and paying them plenty for it.

7. The accountant was charging €1200 for preparing the accounts. I called him to tell him that we will not be renewing his services. He has now offered to do the job for €500 plus VAT. I'm still shopping around here.

8. We were fined €100 plus an additional €3 per day (for 7 days) for the late submission of accounts to the CRO office.

All that can be said is now things are getting back on track. There will be no charges for stationary in 2014 and while I'm involved. I will print & hand deliver any correspondence myself voluntarily, or email where appropriate.

In most cases the services start to be reduced as the unpaid service charges increase, then people stop paying the service charges because the services are reduced and on it goes until the insurance can't be paid.

It's not just about 16 invoices!
 
7. The accountant was charging €1200 for preparing the accounts. I called him to tell him that we will not be renewing his services. He has now offered to do the job for €500 plus VAT. I'm still shopping around here.

You should dump him. It is dishonest to pretend that it is possible to properly & legally audit a functioning management company for €500 plus VAT.

If you want cheaper accountants fees for your management company (as everyone does) you should lobby your councillors and TD's to abolish the compulsory statutory audit for owners' management companies.
 
Rather than start a new thread I'll carry on here. I'll post some points relating to my involvement in the mgmt co. so far:

1. It turns out that 5 of the units are in arrears, averaging €600 each. Nobody owes in excess of €1000.

2. Having spoken to some of them, the majority stopped paying altogether in the last 3 years due to concerns about how the funds were being spent.

3. Some tenants want more investigation into the €1000 stationary fees of 2012. They cannot accept it.

4. The previous Director paid himself €450 in fees. The chequebook also shows him spending on credit for his phone. There may be impropriety here.

5. There is no money provided for a sinking fund. Units were built in late 2005. I'm there since 2007.

6. The previous directors were getting their mates to do odd jobs, like cutting lawns, and paying them plenty for it.

7. The accountant was charging €1200 for preparing the accounts. I called him to tell him that we will not be renewing his services. He has now offered to do the job for €500 plus VAT. I'm still shopping around here.

8. We were fined €100 plus an additional €3 per day (for 7 days) for the late submission of accounts to the CRO office.

All that can be said is now things are getting back on track. There will be no charges for stationary in 2014 and while I'm involved. I will print & hand deliver any correspondence myself voluntarily, or email where appropriate.

Don't absorb costs yourself. While noble no one will thank you for it. The company should and must pay for these costs. Just do it normally and record all your costs for paper, printing etc. The company should buy cheap laser printer for sub €100 as we did which can print thousands of pages at very little cost.

I would be hesitant at giving your accountant any more money. I have had multiple quotes for audits at 600-900 so I would not expect an audit to cost that much these days. It is contrary to myth a very simple and straightforward process that doesn't involve much time or effort on the part of the auditor and smaller companies and organisations like OMCs are even simpler as there is no VAT or other complicated issues that normally trading companies have.
 
You should dump him. It is dishonest to pretend that it is possible to properly & legally audit a functioning management company for €500 plus VAT.

If you want cheaper accountants fees for your management company (as everyone does) you should lobby your councillors and TD's to abolish the compulsory statutory audit for owners' management companies.

Spot on. I believe it is proposed that the audit exemption will be available to companies limited by guarantee in the Companies Bill.
 
I have had multiple quotes for audits at 600-900 so I would not expect an audit to cost that much these days. It is contrary to myth a very simple and straightforward process that doesn't involve much time or effort on the part of the auditor and smaller companies and organisations like OMCs are even simpler as there is no VAT or other complicated issues that normally trading companies have.


Is this for real?

The Procedures for Quality Audit are mandatory in one form or another, for all audits. Here is their Index based on these sample pages of the excel version.

End User Licence Agreement EULA
Signed Documents
Copies of Signed Financial Statements A1.1 and A1.2
Signed Letter of Representation A2
Audit Completion
Matters Forward Checklist A3
Independent Partner/Hot File (Issues) Review A4
Audit Completion A5.1
File Completion Checklist A5.2
Significant matters A6
Review of Communications to Those Charged with Governance A7
Letter of Representation Review A8
Summary of Errors Schedule A9.1
Summary of Errors - Work programme A9.2
Review of Financial Statements and Final Analytical Review A10.1
Common Omissions - Republic of Ireland A10.2a
Common Omissions - Northern Ireland A10.2b
Financial Statements Call-Over Checklist A10.3
Post Balance Sheet Events A11
Going Concern A12.1
Going Concern Questionnaire A12.2
The Audit Report A13
Fraud A14
Planning
Acceptance of Appointment or Re-appointment B1
Audit Planning Checklist B1.1
Audit Planning Memorandum B2
Materiality B3
Opening Balances/Comparatives B4
Audit Exemption - Republic of Ireland B5
Audit Exemption - Northern Ireland B5.1
Internal Control Review
Internal Control and Accounting Systems C1
Internal Control – Maintenance of Books and Records C2
Financial Statement Areas
Intangible Fixed Assets - Lead Schedule D-
Intangible Fixed Assets - Work Programme D1
Tangible Fixed Assets - Lead Schedule E-
Tangible Fixed Assets - Work Programme E1
Investments - Lead Schedule F-
Investments - Work Programme F1
Stocks and Work In Progress - Lead Schedule G-
Stock and Work in Progress - Work Programme G1
Stock and Work in Progress – Attendance Substantive Tests G2
Debtors - Lead Schedule H-
Debtors - Work Programme H1
Bank Balances and Cash in Hand - Lead Schedule I-
Bank Balances and Cash in Hand - Work Programme I1
Creditors - Lead Schedule J-
Creditors - Work Programme J1
Taxation - Lead Schedule K-
Taxation - Work Programme K1
Liabilities, Contingencies and Charges L1
Statutory Matters, Share Capital and Reserves - Lead Schedule M-
Statutory Matters, Share Capital and Reserves - Work Programme M1
Sales and Income N1
Purchases and Expenses O1
Salaries and Wages - Lead Schedule P-
Salaries and Wages - Work Programme P1
Related Parties Q1
Compliance with Laws and Regulations R1
Trial Balance S1
Deleted tests T1
Appendix
Client Work Programme Appendix 1
Client Fraud Questionnaire Appendix 2
Confirmation Schedule Appendix 3
Staff Independence Confirmation Appendix 4
Using the Work of an Auditors Expert Appendix 5

Within this list, the Audit Planning Memorandum questionnaire extends to 15 full pages!

Audits of public interest companies (including owners management companies) are regarded as riskier and more serious than audits of private companies, because the beneficial owners of, and stakeholders in, public interest companies generally aren't involved in the day-to-day running of such companies and therefore have proportionately more to lose from others' wrongdoing or shortcuts.
 
I have seen Directors fees taken from the fund in the last 3 years. €450 per annum. Is this allowed?

Thanks
 
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