Owners’ Management Company – A Brief Guide
In Ireland, a significant portion of the population lives in houses or apartments that form part of a multi-unit development, sharing common facilities, spaces and services. The management of these multi-unit developments generally lies with the Owners’ Management Company (OMC). A multi-unit development is one with at least 5 residential units that share the common amenities and services. These are also called estates. The OMC ensures that the common resources available to the residents of an estate are controlled and operated in compliance with the best practices.
Fundamentals to Understand About an Owners’ Management Company
The OMC performs like an intermediary and governing body for the residential estate. It operates at the centre of the relationship between residents (tenants or owners) and property management agents. Their role involves coordinating with regulators, government bodies and professionals like solicitors, accountants, or auditors.
- An OMC generally exists as a corporate entity.
- Most OMCs operate as not-for-profit organisations.
- It must comply with the Multi-Unit Development Act 2011 (MUD Act 2011) and the Companies Act 2014.
- It owns a percentage of each unit in the estate and is also the legal owner of the common areas on behalf of the residents.
Compliance Requirements for an Owners’ Management Company
An OMC is required by law to ensure compliance with certain rules; here, we have provided a concise explanation of these rules:
- Company Constitution – Every OMC must have a company constitution document which states the regulations for its governance in accordance with the provisions of the Companies Act.
- Directors – The directors of an OMC manage its operations. They are the members of the company who have been elected as directors by other members. The usual term of election is three years. However, where the constitution of the OMC allows, a director can be appointed for additional terms at the company’s annual general meeting.
- Member’s Register – A person is buying a house in a multi-unit development automatically becomes a member of the OMC. Each such person holds a share or membership certificate, which evidences the membership. The OMC must maintain an up-to-date register of members containing the names and addresses of all the members at its registered office.
- Company Secretary – One of the directors of the OMC may act as a Company Secretary, who can ensure that the aspects of compliance and good governance are being catered to;
- Annual Return and Annual Report – The OMC must file an Annual Return to the Companies Registration Office each year. It must also hold an annual meeting where an Annual Report is presented for discussion. The report includes the details of income and expenditure, annual service charges, insurance cover, the sinking fund account, planned expenses for repairs and maintenance etc.
- Sinking Fund & Service Charges – An annual service charge must be determined by the OMC and set up a sinking fund. The contributions of the sinking fund provided for expenditures like long-term maintenance or refurbishment of non-recurring nature in the multi-unit development. The MUD Act 2011 details further service charges and sinking fund provisions.
- Dispute Resolution – The OMC, a unit’s owner, a trustee, a tenant, or a developer can enforce their rights and obligations by applying to the Circuit Court. The Court, in most cases, directs the parties to resolve the dispute by mediation.
Require Any Further Information?
Get in touch with our specialist team, who will help you understand the obligations relevant to the OMC and the statutory requirements you need to be aware of.