Published on: Jan 16, 2012
There are three times when the thought of becoming a director will hit you:
- when your developer-directors are resigning and and handing over the reigns 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 that the clowns 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 frollick outside and nothing every breaks down, you’ll know it was all down to you. (Of course, when the grass is dying, the water pumps are broken and children are afraid to go outside at night, it’s hard to dodge the blame :-))
If you’re considering throwing down the gauntlet and giving it a go, here are the basics you’ll need to know. I won’t even pretend to list everything here, there are more articles on this site which will help, our monthly meetings where you can ask questions to other directors and of course the best way to learn: by making mistakes.
Almost every management company is a proper company 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 shareholders/owners. This sounds very scary but don’t worry. Firstly, I assume you’re an honest human being and not a conman 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 occasionally 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. (In my company, we meet every 2 months for a drink and talk for 90 minutes.)
- 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 years accounts (which have been audited before). Your managing agent, accountants and auditors will work with you to prepare all that so don’t worry.
- You have to submit your company accounts to the CRO. Your agent and auditor will do all the work, you just need to check that it’s not obviously invented.
- 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. Unless they’re irate with anger towards you, this will be nothing more than a formality.
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
The rest is a lot harder to quantify so I’ll write about that in detail later. 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.
(More to come, stay tuned!)