Right to vote at AGM

T

tnegun

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I'm a member of a management company where the members are in dispute with the agent regarding the validity of fee increases due to no AGM and/or vote being held. The agent has been replaced and a new agent installed however they now demand that all members pay the disputed fee or they will be denied voting rights at the next AGM. Most members have continued to pay the last adopted fee but have outstanding balances so will be denied their vote at the upcoming AGM. Is this correct/legal? Thanks in advance for any comments/advice.
 
You need to get your hands on the Memorandum and Articles of Association of the management company and see what it say about the rights of members in arrears. Get the agent to send you a copy of it and see what it says as a starting point. Go from there.
 
According to our Memo & Articles, if you owe money to the OMC you are not entitled to vote
 
Thanks for the info I'll request it. Is it possible they don't exist? I ask as we have been referred to the property deeds and the deeds of covenant when I've queried similar in the past. I have these and there is an obligation to pay the service charge but the consequences of not doing so are loss of access to common areas, no mention of voting rights but I'll review again this evening. Could the deeds of covenant be an alternative to the Memorandum and Articles of Association? Also I live in a house not apartment but there are apartments in the development built in 2006/2007 if that has any bearing.
 
The Memorandum and Articles of Association should have been updated and rebranded to a Company Constitution after the 2014 Companies Act belatedly took effect some years back.

You can buy a copy on core.cro.ie for €2.50 and it'll be in your inbox within a few minutes.
 
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Gordon Gekko said:
Shouldn’t the service charges be set by the Members at the AGM?
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This is the crux of the disagreement changes to the service charge were never mentioned let alone approved at any AGM and when pressured on it 3 years AGMs were held on the same day behind closed doors with just the agent and directors proposing and approving the increases.

T McGibney said:
The Memorandum and Articles of Association should have been updated and rebranded to a Company Constitution after the 2014 Companies Act belatedly took effect some years back.

You can buy a copy on core.cro.ie for €2.50 and it'll be in your inbox within a few minutes.
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Thanks for that there were no Articles of Association but there is a Company Constitution on the CRO from 2005 so I've requested it.
 
This is in the original Company Constitution from 2005 so I guess that's it. Even though the fees are in dispute anyone owing cannot vote at an EGM/AGM?

"No member shall be entitled to vote at any general meeting unless all money's immediately payable by him to the Company have been paid."
 
tnegun said:
This is the crux of the disagreement changes to the service charge were never mentioned let alone approved at any AGM and when pressured on it 3 years AGMs were held on the same day behind closed doors with just the agent and directors proposing and approving the increases.
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You'll have to check the rules around notice for meetings and quorum. We need 10% of voting members and 21 days notice in writing of a meeting
 
tnegun said:
This is in the original Company Constitution from 2005 so I guess that's it. Even though the fees are in dispute anyone owing cannot vote at an EGM/AGM?

"No member shall be entitled to vote at any general meeting unless all money's immediately payable by him to the Company have been paid."
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That's nearly word for word for the M&A I have from 2004, so looks like it's pretty standard. Those "AGMs" look very dodgy
 
I've found the updated Constitution from 2017 and it has similar wording
"No member shall be entitled to vote at any general meeting unless all moneys immediately payable by him to the Company have ben paid"

There was no notice for the repeated AGMs so we the members consider them invalid. We'll pay the last adopted charge and insist we be allowed vote at the AGM. The crazy thing is we accept a service charge increase is justified just not to the levels proposed. The previous agent appeared to squander money e.g. an 80k landscaping bill or 60k public lighting for example so we demanded better visibility and all relations broke down.
 
When you say ‘we’, what percentage of the owners are you talking about?

I went through something very similar a few years ago. Ultimately we ensured enough people had paid their fees to be able to out-vote the current Directors, we then convened an EGM (rules for doing this will also be in the Memos & Arts and must be followed to the letter) and removed the existing Directors and appointed new ones. It was actually fairly painless in the end, though that will come down to how engaged your group of owners is.

If this is what you want to achieve I would not bother getting into whether the existing AGMs are valid or not as that could take years to argue and might require going to court - just get yourselves paid-up (and confirmed in writing) then replace the Board. If it turns out the fees are over the top you’ll be in control and can stop the waste and perhaps lower fees for next year. Although having read many of these threads on AAM I would warn that you will most likely discover the fees are not that crazy, OMCs just have much bigger overheads than most people realise.
 
Very very true it's only about 20-30 members who are active out of 400 or so. We had contemplated attempting to replace the directors however there is real fear that the company and accounts are in such a mess that whoever puts themselves forward becomes responsible for this. Is there any basis for that fear?
 
tnegun said:
Very very true it's only about 20-30 members who are active out of 400 or so. We had contemplated attempting to replace the directors however there is real fear that the company and accounts are in such a mess that whoever puts themselves forward becomes responsible for this. Is there any basis for that fear?
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Yes there is. Directors are responsible for day to day management of the company and face personal liability for breaches of company law (eg not filing accounts with the CRO or failing to keep accurate books and records of director meetings and decisions). In truth the likelihood of prosecution here is is low but cannot be discounted completely. I would see the directors in place at the time of the mismanagement being more likely to be a target for the CRO in terms of enforcement action than say new directors appointed to clean up the mess. But directors need to go in with eyes wide open. If there are any owners that are solicitors or accountants they may be good appointees to clean up this mess.
 
tnegun said:
Very very true it's only about 20-30 members who are active out of 400 or so.
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We obviously don't know the context here, but is there any chance those other members are actually fine with the current fees and your group are just more cost conscious (rightly or wrongly)? When we took over our development we had 90% of the members on-board, but within months of taking over it became apparent that there was one cohort who wanted to spend money and improve the place (mostly the owner-occupiers) and another that wanted to spend as little as possible (mostly accidental landlords) and disagreements broke out similar to what you're describing.

Anyway you're going to need to get in contact with lots more of those members and get them on-side. They don't need to join the Board or even attend meetings after the one EGM, but they'll need to pay their fees so they can vote.

Others are better placed to comment on the risk of taking over the OMC. In our case the accountant noted in the published accounts that there were missing records and we noted similar in AGM minutes, but ultimately we took @Gushering's view that it was unlikely anything would happen and that we would not be the ones pursued given this is happening in so many MUDs. The price was well worth paying to get control of the place we lived.
 
Gordon Gekko said:
Shouldn’t the service charges be set by the Members at the AGM?
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Incorrect. A draft budget which includes projected expenditure for the year ahead and the apportionment of fees for each unit should be presented by the Directors at the AGM. This is then agreed or not by members. Those unhappy with how an estate is being run can put themselves forward as Directors once they are fully paid up and give prior notice of their intention to do so. They can then have input into budget setting and how members fees are set. This is often an eye opening experience for those who consider that they are being over charged.
 
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Threadser said:
Incorrect. A draft budget which includes projected expenditure for the year ahead and the apportionment of fees for each unit should be presented by the Directors at the AGM. This is then agreed or not by members. Those unhappy with how an estate is being run can put themselves forward as Directors once they are fully paid up and give prior notice of their intention to do so. They can then have input into budget setting and how members fees are set. This is often an eye opening experience for those who consider that they are being over charged.
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indeed!
 
Threadser said:
Incorrect. A draft budget which includes projected expenditure for the year ahead and the apportionment of fees for each unit should be presented by the Directors at the AGM. This is then agreed or not by members. Those unhappy with how an estate is being run can put themselves forward as Directors once they are fully paid up and give prior notice of their intention to do so. They can then have input into budget setting and how members fees are set. This is often an eye opening experience for those who consider that they are being over charged.
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So it’s agreed by the members at the AGM then…
 
Threadser said:
It's agreed or rejected, but the budget is set by the board of directors.
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Ridiculously misguided semantics…it’s ‘set’ by the Members at the AGM.

The Directors suggest/propose and the Members agree/set/vote it in.

What do you think ‘set’ means? You ‘set’ something and that’s it done.
 
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