AON Knowledge Library
Companies Act 2014 is the primary source of company law in Ireland. The commentary below should be read in conjuction with the legislation.
Company law guidance material is available from:
Chartered Accountants Ireland and The Housing Agency have published Owners’ Management Companies: A Concise Guide for Directors identifying and guiding on 10 key governance topics for OMC directors.
The Housing Agency’s YouTube channel carries training webinars for MUDs/OMC stakeholders.
There are three times when the thought of becoming a director will hit you:
- when your developer-directors are resigning and handing over the reins to the owners for the first (terrifying) time
- when your existing directors run out of steam and start to resign.
- when you get downright ticked off and know you can do a better job than those that are already there
No matter what the motivation, becoming a director for your complex is a big deal. You’ll have to learn a lot of new things: from company law and audits to how water pumps work and how your sewage is removed. It’s not always glamorous but it’s definitely worthwhile because when the place runs well, the grass is cut, children frolic outside and nothing every breaks down, you’ll know it was all down to you.
If you’re considering picking up the gauntlet and giving it a go, here are the basics you’ll need to know. We won’t even pretend to list everything here. There are more articles on this site which will help, as well as our periodic meetings where you can ask questions of other directors.
Almost every owners’ management company is a body corporate operating under Irish law. This means a few things.
- Directors share legal responsibility for the decisions they take. If you steal money, run the company into the ground (trade negligently) or use the company to your own (illegal) advantage, can you be prosecuted by the ODCE or sued by the other members/owners. This sounds very scary but don’t worry. Firstly, it is assumed you’re an honest human being and not a con man so you’re not likely to break the law. Secondly, the company will pay for insurance for you so that you won’t have to pay the legal bills if someone sues you.
- You have to meet routinely for Board of Director meetings. These have to be minuted by the company secretary. You can meet as often or as little as you want. You can discuss things by email if you want. Meetings can go on for as long or as short as you want. (Every two months is often seen as about right.)
- You have to hold an AGM once every calendar year. You will present a statement to the owners, ask them to vote on the previous year’s accounts (which may have been audited). Your managing agent, accountants and auditors will work with you to prepare all.
- You have to submit your company accounts to the CRO.
- You have to prepare a budget for the upcoming year. This will be based on your last budget, your current expenses, tenders for contracts and whatever else you’d like to do (repaint walls, replace carpets, install CCTV, etc). The budget must be presented to the owners at a general meeting and voted on.
All that probably seems very scary but don’t worry, it’s all fine. Basically, you will meet with your agent and other directors during the year to see how your spending is going and keep track of any big issues. The agent should do all the day-to-day work. Then you need to review the accounts before you sign them and do some work on the budget. Your agent and auditors will do as much of the remaining work as you want.
The other stuff
Here are a few of the things that you might need to deal with:
- Collecting unpaid service charges. You’ll need to make sure that your agent chases these, hiring a debt collection solicitor if necessary. This isn’t pretty but it’s absolutely necessary.
- Tendering for contracts. Sometimes you’re just not happy with the level of service you get from your companies. Maybe the waste collection company are stealing your bins when you look away, the landscaping company are trampling all over your petunias or the ESB just aren’t proving the same electricity they used to back in the day. Or maybe, you think you can get a better deal by taking your (considerable) budget elsewhere. When this happens, it’s time to talk to several companies providing the same service so you can compare the quotes. Your agent should help you with this (actually, they should do it for you but sometimes you’ll find that only a paying-owner has the right level of motivation to bargain hard.)
- Have a long-term plan for bigger expenses. You won’t be able to repaint a large complex, replace the carpets in an entire block, install CCTV or solve the worlds problems in a single year so you’ll need a plan. This will allow you to budget over several years, achieving all your goals without bankrupting your fellow owners.