Control of Management Companies

future_plans

Advise and thoughts appreciated on this

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I bought an apartment 2 years ago from well-known developers. The complex was nearing completion at that stage and they were only finishing interiors in the last block. We were told at the time, they would be gone within a months.

1 year ago at the AGM for the management company, the developers held onto 20 apartments and retained control of the complex management company. They told us that they were trying to sell and expected remaining units to be sold within 9 months.

1 month ago at this years AGM. Developers still retain 20 units. They frankly informed us that they intend to retain control of the complex indefinitely. They are planning further development in the adjacent lands and require our car-park for access. Since they have control, they can do this.

The government has to put a stop to this. Big money cannot hold onto control of management companies in such a fashion. They should be forced to hand over control after X amount of months. I cannot believe that they have the gaul to tell us residents that we will never control the management of our own apartment complex.

As I said, thoughts, comments, etc all welcome.

Paulw

There are a few things you can do. Check the articles for your management company. In some, they actually fail to state that everything must be handed over before the shareholders can take control of the management company.

Other than that, you should get as many people together as possible, and constantly call, email and write to the directors of your management company.

We have taken control of our management company, even though the common areas have not been handed over, because the articles didn't explicitly state that all areas had to be handed over. We called an EGM, with the agenda being the forced removal of the sitting directors.

Other than that, you could get a group together, and consult a solicitor.

Ste.phen

Is there a flip side to this, where because the developer hasn't handed over the site, they devloper would be liable for ongoing maintenance and repairs until such time as they hand it over to the management company?

(just a thought i had, i presume the developers protect themselves from such things...)

Paulw

That's a very good point.

You should make sure that the developer is paying 20 units worth of management fees in to the management company. Remember, the developer and the management company are two separate legal entities. So, double check the company accounts.

Just keep hassling them, it tends to work too, but the hardest part right now is trying to sell any property.

future_plans

The Management company have assured us that they are. The developers are even very cagey in telling the residents which of the apartments they are holding. From the company accounts we received, there is no breakdown of who paid what in the fees.

Paulw

future_plans wrote: »

The Management company have assured us that they are. The developers are even very cagey in telling the residents which of the apartments they are holding. From the company accounts we received, there is no breakdown of who paid what in the fees.

That's not unusual.

But, from your lease contract, you are given the equation as to how the fees are appropriated (usually based on floor space per unit). So, you should be able to work back from that.

Your best bet is to form a resident's association. Invite everyone. Call to each door. Ask if they are owner or tenant. It will take a good bit of work, but we found it very useful.

antoinolachtnai

The other thing is that if they are planning to use the property to get access to another property, they will need to pay the management company or the owners for this. They cannot treat the property owned by the management company as though it were their own. It's called 'opression of a minority interest'.

Enforcing this in practice is going to be tricky though.

Residents' association is definitely the next stop. Have you got the list of names and addresses of all the owners from the management company?

DawnMc

What exactly do management companies do? I can't see any difference or anything being done in my block

antoinolachtnai

Well, at a very minimum they pay the electricity bill to keep the lights on in the common areas, no?

Ste.phen

Aye, and they'd usually organise repairs to car park gates, etc.
And the bins!

But apart from the lights, the gates and bins, what have the management company ever done for us?

Paulw

They also insure the buildings.

But apart from the insurance, the lights, the gates and bins, what have the management company ever done for us?

patrickolee

They cut the grass, weed the gardens, clean and paint common areas.

But apart from cutting the grass, weeding the gardens, cleaning and painting common areas, the insurance, the lights, the gates and bins, what have the management company ever done for us?

is_that_so

Our complex is very small and easy to run so the option of an external company never came into it. We did have to get the common area title signed over to us. The developers who were also one of the tenants were "trustees" until the new directors were registered(ourselves).

As for the management company well we look after the upkeep of the common areas, electricity, painting and of course the block insurance. From what I understand title is not signed over until the development is fully complete.

Victor

antoinolachtnai wrote: »

It's called 'opression of a minority interest'.

Yeah, speak to a solicitor who is knowledgable on company law and property law.