New Apartment Complex Owners, Reduced Services but full fees

manonboard

Hi Everyone,

Some new owners have recently purchased my apartment complex. They are implementing changes contrary to the previousily agreed budget at the AGM.

Would anyone know if these new owners should be automatically made directors without any AGM vote? (They have majority rights but no AGM / EGM was held to vote on it)

Secondly, acting as the directors of the complex, they have reduced services but the Management Agent has refused to review the budget. Is this allowed? Surely if the services are being reduced, the budget should reduce on par.

I'm quite annoyed by this and feel like the residents are getting the raw end of the dodgy deal.

Any opinions or advice?

Ray

Paulw

I don't understand how someone purchased the complex? Each unit should be one share in the management company, and one vote.

Directors must be elected at an AGM, and each year at the AGM the budget must be proposed and voted on by members.

I recommend you do some reading - the Multi-Unit Developments Act, the articles of association of your management company, your lease agreement, and also company law.

Otherwise, consult a solicitor.

manonboard

Paulw wrote: »

I don't understand how someone purchased the complex? Each unit should be one share in the management company, and one vote.

Directors must be elected at an AGM, and each year at the AGM the budget must be proposed and voted on by members.

I recommend you do some reading - the Multi-Unit Developments Act, the articles of association of your management company, your lease agreement, and also company law.

Otherwise, consult a solicitor.

Hi Paul

There are about 550 apartments. They purchased about 350+ of these. I should of been more clear. I've read the MUD act and my lease from top to bottom. I understood that directors need to be voted in at a AGM and the MA should be taken care of the day to day activities.
However, there was a receiver company acting as the directors which have now resigned (they were the sole directors).
The new owners of the majority of the apartments are now acting as directors (without an AGM being held) ordering the MA on tasks. The agreed budget was voted for with the service level to stay the same. However, I can't find any information specifying how it should be dealt in this type of situation.

Thanks

davo10

Manon, are the new owners one of these US vulture funds by any chance?

jd

Is it a REIT that has moved in?
http://www.irishtimes.com/business/sectors/commercial-property/kennedy-wilson-believes-retail-property-market-at-bottom-1.1671125#.Uui-qgdihSA.twitter

manonboard

Hi, Just back from work.

It's this place and these guys:
http://www.irishexaminer.com/archives/2013/0502/features/apartment-blocks-sold-230038.html

Lantus

directors can be appointed at any time by existing directors so I would imagine that the receiver simply appointed the new owners and then stood down.

Budgets are indications of how money will be spent but are totally dependant upon service fee payments. It may be that reduced service fees have led to reduced services. However, upon purchase or prior to any outstanding fees attached to those 350 units should of been settled in full which would represent a significant amount of money coming in.

The biggest will be voting rights as the new owner holds potentially 350 votes and even if every member turned up at the AGM they can be outvoted. Your articles may provide voting information. Ours says one member one vote. I don't see how you can be a member of the company more than once even if you were to own several properties. The ODCE guidance and MUD act isn't as helpful as you would imagine in this case.

Of course voting is dependant on all service fees being paid but as you don't have any control over that information it will be very hard to prove.

Voting rights would seem to be the biggest issue. Getting residents on board and in control of the finances. The question is why have they not done this until now?

The_Conductor

One owner- one vote........ You can own 300 units- versus an owner occupier, who only owns one unit- both parties get one vote. If the owner of a large number of units attempts to impose their will on the other owners- its called suppression of minority shareholder rights. In the absence of an appropriate venue for airing grievances- you make a complaint to the CRO (though I would suggest informing the Management Company of this in advance and sitting down and seeing if you could hammer out something between you- as its an onerous and time consuming process, that no-one comes out the better of).

Personally- I'd suggest a group of owners- who consider themselves suppressed shareholders- come together, do a whip around, and appoint a solicitor to act on their behalf.

P. Breathnach

The_Conductor wrote: »

One owner- one vote........ You can own 300 units- versus an owner occupier, who only owns one unit- both parties get one vote.

The MUD Act provides for one vote per residential unit. This if one person owns more than 50% of the units, that person can, in effect, run the OMC.

If the owner of a large number of units attempts to impose their will on the other owners- its called suppression of minority shareholder rights. In the absence of an appropriate venue for airing grievances- you make a complaint to the CRO (though I would suggest informing the Management Company of this in advance and sitting down and seeing if you could hammer out something between you- as its an onerous and time consuming process, that no-one comes out the better of).

Personally- I'd suggest a group of owners- who consider themselves suppressed shareholders- come together, do a whip around, and appoint a solicitor to act on their behalf.

Oppression of minority shareholders is the avenue to explore.

The reduction of services cannot benefit anybody, as OMCs are not-for-profit bodies. It might be that things are being tightened up because the OMC has a liquidity problems (which often arise because of unit-holders being in arrears with their fees). As a sharehoder in the OMC, you are entitled to ask questions about the actions of the company.

Lantus

this is where is gets muddy. (no pun)

one member OR one unit per vote. Articles generally state one member while the MUD act one unit one vote. from memory the articles take precedence unless they include provisions for more than one vote per member. i.e. each subscriber will have 50 votes which gave the developer supreme power. Those clauses are null and void but one member would still be valid?

If anyone has another interpretation??? another failing of the MUD act in that it provides ambiguity in this matter.

when is the AGM? You can get resident directors appointed there and they can run the company assuming you provide sufficient notice. (all in articles.)