Looking for advice: OMC Director dealing with inactive directors, managing agent concerns and considering an EGM

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Whiteglass_ale

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I’m looking for some independent advice and perspectives from people with experience of Irish OMCs and managing agents.​


I’m currently a director of an OMC in Ireland and, to be honest, I’m reaching the point where I’m becoming increasingly frustrated with how the company is being run and I do feel like throwing in the towel as its consuming too much of me now.

The biggest issue is that there are three directors, including myself, but I feel that I am effectively the only director actively involved in the day-to-day governance and oversight of the OMC.

The other two directors are not actively involved in any meaningful way.

They have not resigned, and I am not suggesting they never respond to anything, but in practical terms, I seem to be the person consistently:

  • Raising issues.
  • Reviewing finances.
  • Questioning expenditure.
  • Chasing the managing agent.
  • Raising governance concerns.
  • Trying to arrange meetings.
  • Trying to establish proper processes.
  • Researching alternatives.
  • Trying to move decisions forward.
I genuinely feel that an OMC will not effectively operate with one active director and two largely inactive directors.

Concerns about the managing agent​

Over time, I have become increasingly concerned about the service being provided by our managing agent.

Some of my concerns include:

  • Poor communication.
  • A lack of proactive management.
  • Issues taking too long to progress.
  • Difficulty getting clear updates.
  • Concerns regarding financial oversight.
  • Questions around expenditure and quotations.
  • Maintenance issues.
  • Ongoing rubbish and bin problems.
  • Parking-related issues.
  • Arrears management.
  • A lack of regular, clear financial reporting.
  • Concerns regarding long-term planning and the sinking fund.
There are also ongoing issues affecting the development which require proper management and engagement with relevant parties.

I appreciate that a managing agent cannot solve every problem. However, I increasingly feel that the directors are having to push and chase too many things that I would expect a professional managing agent to be proactively managing.

Governance and financial concerns​

One of the things that has increasingly concerned me is the level of financial oversight.

We have an annual budget, but a significant proportion of it had already been spent relatively early in the financial year.

This raised questions for me about:
  • Budget management.
  • Forecasting.
  • Whether expenditure is being appropriately monitored
  • How directors are being kept informed.
I have been pushing for better governance arrangements, including:
  • Monthly financial reports.
  • Budget versus actual expenditure reporting.
  • Clearer approval processes for significant expenditure.
  • Appropriate director oversight of payments.
  • Better arrears management.
  • Clear long-term sinking fund planning.
Personally, I don’t believe these are unreasonable requests.

Decisions being made without sufficient director involvement​

Another concern I have is that significant decisions appear to have been made without what I consider to be adequate discussion or involvement of all directors.

I strongly believe that significant expenditure, contracts and decisions affecting an OMC should involve proper Board discussion and governance.

I am increasingly uncomfortable with a situation where decisions are made and then directors are effectively informed afterwards.

That is not how I believe an OMC Board should operate.

The other two directors are essentially inactive​

This is probably the part I am most interested in getting advice on.

There are three directors in total, including myself.

However, I feel that the other two are essentially not active in the running and governance of the company. They are also so focused on their own gains and not the wider development.

They are not consistently involved in:
  • Financial oversight.
  • Management of the managing agent.
  • Identifying issues.
  • Planning.
  • Driving actions forward.
The result is that I feel an enormous amount of responsibility falls on me, but equally we are not a united front. They remain silent and then pop up randomly to give out about something.

And honestly, I don’t want that.

I did not become a director to effectively run the entire OMC myself.

I would much rather have three active directors who share responsibility and work together.

Instead, I constantly feel like I am the person saying:

Can we discuss this?

Can we arrange a meeting?

Can we properly approve this?

It is becoming exhausting.

Considering changing managing agent​

Because of the concerns I have, I have started looking at whether we should conduct a proper tender process for a new managing agent.

My preference would be to approach this professionally.

For example:

  1. Identify exactly what services the OMC requires.
  2. Compare the services offered.
  3. Compare fees and contract terms.
  4. Meet or interview shortlisted candidates.
  5. Make a properly documented decision.
I don’t want to simply change managing agents for the sake of it. But equally, I don’t think we should remain with a managing agent simply because changing feels difficult.

Considering an EGM​

I am now considering whether an Extraordinary General Meeting of the members may be appropriate.

My understanding is that the Constitution provides for Extraordinary General Meetings and that the Companies Act provides mechanisms through which an EGM can be convened.

My thinking is that an EGM could provide an opportunity for the actual members of the OMC to understand what is happening and express their views (for the few that turn up)

Potentially, the EGM could cover:
  • The future approach to managing agent services

Should the managing agent attend?​

Another question I have is whether the managing agent should attend an EGM where concerns about their performance may be discussed.

Part of me thinks it is only fair that they have an opportunity to:
  • Provide their perspective.
  • Answer questions.
However, I would not want them to:
  • Control the meeting.
  • Chair the meeting.
  • Dominate the discussion.
  • Influence the members.

I would potentially favour giving them a defined opportunity to respond and answer questions, while making it clear that the meeting is a meeting of the company’s members.

Where I am struggling​

The biggest issue is that I feel I am constantly trying to make things happen while the other two directors are not actively involved.

I’m not trying to portray myself as some sort of hero.

But I don’t think it is sustainable or appropriate for an OMC to effectively depend upon one director being proactive.

I also don’t want to continue attending meetings where concerns are repeatedly raised, assurances are given and promises are made, but little appears to change afterwards.

At some point, there needs to be proper action.

Questions for those with experience​

  1. Am I being unreasonable in expecting all directors to be actively involved?
  2. What happens when two out of three directors are essentially inactive?
  3. Should I be considering an EGM?
  4. What would be an appropriate purpose for an EGM in this situation?
  5. Should the managing agent attend an EGM?
  6. How would you deal with directors who are essentially not participating in the governance of the company?
I’m genuinely looking for constructive advice.

I don’t have a personal agenda against anyone.

I simply believe that if someone agrees to become a director of an OMC, they should take an active role in the governance and oversight of the company.


Thanks in advance.
 
If it was me, I'd give notice to the two other directors that you intend on resigning in 4 weeks time and see what response you get.

If you get silence, then leave and don't look back
If they protest then you have something to work with
 
That doesn't solve the problem - presumably Whiteglass_ale has an active interest in the OMC running efficiently and managing the property in the interests of all of the owners

He/She needs to find other owners who share his concern and who would be happy to serve as directors and then organise an EGM to evict the current directors and elect a new set
 
jpd said:
That doesn't solve the problem
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I agree stepping down doesn’t solve anything. But I’ve spent so much time and mental effort for nothing to change or for people to listen.

I was wanting to do it to improve things, make the area better. Better use of funds. A lot of it doesn’t impact me either as my block is near the entrance. But I always wanted to make the whole place better. And after years now of nothing and being blocked and wasted time and energy. It is hard to stay motivated. Half the problem is the other two directors don’t even understand the function of an OMC. They seem to think that they pay their fees so things should be done. They don’t understand that it goes to a general pot and then work from there. Or they don’t understand that the managing agent is not the management company.
 
jpd said:
working with the existing directors
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This is the crux of the problem though. They don’t want any involvement. But they will pipe up only if I do plan on changing something and need support. They block absolutely everything and don’t want to spend a bit of time trying to improve things. They have never once queried anything with the managing agent. Never checked the accounts or documents are kept in order.
 
Could the other directors have any improper tie to the management agent that might be motivating their behaviour?

Or are they just lazy/disinterested/uninformed ?
 
DannyBoyD said:
So find replacements;
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Unfortunately this is not always an easy task. The role is unpaid and can be onerous at times. Hopefully you will be lucky enough to get one new Director at least who understands the role and will review the managing agent contract with you. You will have to hope the other two directors resign their roles but there is no guarantee that they will.
 
MugsGame said:
improper tie to the management agent that might be motivating their behaviour
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There is a bit of this, the whole thing has been a mess. These two directors also have debts to the management company which I said we should not allow. Cause in theory they cant vote at AGM, but the managing agent doesn't do anything properly. The level of professionalism is shocking.
 
If the management company owes money to the directors, that would imply that the management charge was not covering the cost of managing the building - either the level was not high enough or owners did not pay the management charge or a bit of both

The accounts should make this clear
 
jpd said:
he directors can be voted out by an EGM
Premos said:
The role is also limited to 3 years. So they have been continuously re-elected or reappointed at the AGM by members.
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They can for sure, but the problem is finding other volunteers to replace them. I have been an OMC Director for over 10 years. I am always willing to step down at every AGM but no body puts themselves forward to replace me. The other two directors I work with do understand the role though and we work well enough together. The OPs situation is a very difficult one to resolve because it is dependent on finding new volunteers who will do a better job than the currrent incumbents.
 
Whiteglass_ale said:
the managing agent doesn't do anything properly. The level of professionalism is shocking.
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Hopefully you will be in a position to put the managing agent role out to tender soon, as per best practise. It should be easier to get owners to volunteer to become Directors if you have a good managing agent in place.
 
Premos said:
Have you raised this point. Or do you expect the managing agent to raise it.
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Yes, numerous times, The managing agent has been in place for 15+ years and they themselves think they are the management company. The pay themselves how they see fit. And questions on finances to them, they get very irate and then I am told I am taking a tone and am I accusing them. I have on occasion thought to report them to the PSRA as they have done very questionable things from what I have seen. I wouldnt have faith that things are above board. Even minutes have not been correct and were made up which I have called out.
 
Whiteglass_ale said:
The managing agent has been in place for 15+ years and they themselves think they are the management company.
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Does the managing agent control the OMC bank account? We only allow the agent to view the account, set up payments etc. Any money out of the account has to be co-authorised by at least one director. This means that the agent cannot make any payments with OMC funds without the approval of a director.
 
If the other directors have unpaid debts to the management company they possibly have conflicts of interest in running the OMC in a easygoing way. Ultimately the only way forward is to turnover the board. You don't need every owner to get involve in the company but you need to learn how to count votes and ensure the writing is on the wall before running an EGM. Then wrest control over the OMC bank accounts and set a new service level with the agent or else replace them.
 
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