Management Company's right to withdraw services

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Nenaghboy

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Our apartment complex is self-managed by one owner with whom we are in dispute on many issues including various breaches of the Companies Acts and payment of service charges. We wrote to the company and their solicitors last year seeking clarification on several matters and advising them we would with old service charges until we received a response.

We received no response and have stopped payment, ie we are not refusing to pay and will do so as soon as our concerns are addressed. The company is now threatening to withdraw services such as meter readings, fob replacement etc (NOT PROVIDED FOR IN HEAD LEASE). Any help would be appreciated. Thank you.
 
As a general rule the lease agreement is phrased such that you are obliged to pay the management charge as agreed. If not the company is entitled to withdraw services. The other point to consider is that, generally, the most significant part of the management fee is used to pay for block insurance. Not paying your fee may be jeopardising your block insurance. As that would have to be prioritised over other services it would definitely jeopardise them.

I am assuming you are an owner of an apartment? In that case, you too are part of the company. Have you had an AGM recently? Did you attend it? Did you bring any of your concerns to the meeting?

You say that "Our apartment complex is self-managed by one owner" - is this person acting as an agent on behalf of the management company?

You say that "we are in dispute on many issues including various breaches of the Companies Acts and payment of service charges" is that "we" referring just to your apartment or is this several owners together?

It sounds like you need to start getting involved in your management company, becoming a director and starting to look at the provision of services. It is always more straightforward to effect change from within rather than standing outside the fortress lobbing stones at your own building.
 
Many lease agreements allow for a management company to put a charge on the lease for unpaid management charges. This would rank ahead of any mortgage that you may have. I have seen a case where to avoid this the bank paid the management company and added the amount onto the mortgage. All legally done.
 
services are dependant on service fee payment (the clue is in the word)

You wont find things like electric fobs mentioned in leases, far to specific and not relevant. What ever services the OMC provides or intends to provide as authorised by the directors at any time or via the annual budget as approved by the members can be withdrawn through non payment.

The 'I wont pay' approach is the least effective. It doesn't address any of the root problems and in fact just makes them worse. The company solicitor is under no obligation to contact you about anything. They are not employed or engaged by you. How many members are there? Are your concerns shared by others?

Could you arrange an informal meeting with this owner? Who are the directors if not this person? Remember you need two directors and a company sec (which could be one of the directors). Go to the CRO if you are unsure. Download the ODCE handbook as well for guidance.

Your real solution is to gain knowledge and enter into meaningful dialogue.

If I had a pound for every resident who was convinced I was breaking the law or some regulation (which they often know nothing about) I'd be rich.

If this owner is acting as a managing agent in running the development and is not a director then they would need a very expensive license to do so.

If you can give an example of what aspects of company law you think have been broken then maybe we can help further as well as more detail on the legal arrangements of directors and agents etc which you should know.
 
Perhaps you will be able to help. My friend owns an apartment in a small gated apartment block. The apartment block consists of 50 apartments. Eight of the apartments are privately owned and the remaining 42 owned by a company. There is no owner management company in place. However the owners of the the 42 apartments have their own management company(not an owners management company) They are renting their apartments, and the place is well run. Only one annual general meeting has taken place within the past five years and they have fixed an annual management fee. The directors of the management company are two of the owners of the 52 apartments. My friend at the AGM asked to become a member of the management company . They said that they would look into, that was a year ago and no reply to date. Only two owners turned up at the AGM.The management company is registered with the companies office. The common areas are registered to my friend when he bought the apartment at auction from the receivers.(8 apartments were bought at auction the same day ) the 42 other apartments were bought after auction and the receivers are long gone. The MUD Act says that a purchaser shall automatically become a member of the Owners Management Company. My friend has no problem paying management fees but he sees the difficulty if he decides to sell his apartment, as there is no Owners Management Co in place. No demand for maintenace fees has been made of my friend since the last AGM. What remedy has my friend.
 
"My friend has no problem paying management fees but he sees the difficulty if he decides to sell his apartment, as there is no Owners Management Co in place."

What enquiries did he make before he bought at auction?

You say variously:

There is no owner management company in place
The owners of the the 42 apartments have their own management company(not an owners management company)
The directors of the management company are two of the owners of the 52 apartments.
The management company is registered with the companies office.

Presumably, he used a solicitor to purchase the apartment and, presumably, these issues were pointed out to him.

He should take proper legal advice.

mf
 
I understand what you say. Yes a solicitor was used to purchase the appartment. The issue of purchasing the 42 remaining appartments took place over a year after the auction and when my friends deeds were registered. The question that now arises is that there is no owners management company in place. When my friend purchased his appartment at auction that MUD Act was not in place. There would be little point in paying management fees at this stage if a person has no say in the running of the management company. I am sure that there are other such cases. It would be interesting to know how they were resolved(if resolved) I know that the MUD Act allows for access to the Circuit Court which could be a costly business. It is hard to imagine that the MUD Act does not provide for penalties for its breaches. In my opinion the MUD Act needs to be reviewed.
 
"In my opinion the MUD Act needs to be reviewed."

Perhaps if people took more interest in what they were doing, these situations would be sorted out by the people themselves. It always seems to be somebody else who should be responsible!

Your friend's situation is a mess and, yes, it is unlikely that he will ever be able to sell. Does he even know if there is a block policy in place?

mf
 
I would not say that my friends situation is a mess. It needs working on. It appears that the majority appartment owners bought the management company from the receivers and they are running it as if they owned all the apartments. They are recorded in the company,s office as directors.They will have to come to their senses and recognise that others also own apartments in the complex. Would my friend be entitled to become a member of their management company? In the interest of fairness they should allow this. At least my friend would have some recognition even though it would not be keeping within the spirit of the OMC. I belive that efforts should be made by appartment owners in this complex and in similar ones to have the MUD Act brought up to date and to have fixed penalties for breaches of the act. What about contacting the relevant Government Minister. We are now in 2016 five years after the MUD Act was brought into force and it is unreasonable that some appartment owners have little or no rights as to how the appartment blocks should be run. Any more views?
 
I doubt they "bought the management company from the receivers", more likely have taken control of it. I think your friend needs to engage a solicitor.
 
jdwex said:
I doubt they "bought the management company from the receivers", more likely have taken control of it. I think your friend needs to engage a solicitor.
Click to expand...

You could be right. My friend has examined the title documents in existence at time of auction and the same management company has been in existence since the time the appartments were built. It appears its function relates to the transfer of the Common Areas. It is purely a private management company and now owned by representatives of the owners of the majority appartments in the block. They will have to realise that they do not own all the appartments
 
From reading the various posts it appears that Management Companies were set up at the time apartments were commenced and remained in place mainly for transferring the common areas. In some cases these companies continued in place after all the apartments were sold. People who bought individual apartments were never given an opportunity to become a member of these companies. This is the problem in most cases. Therefore no owner management companies has been set up. The MUD act appears to be weak in this respect.
 
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