When you buy a property in a multi-unit development, this being an apartment, duplex or even house in some cases, you will become a member of the Owners’ Management Company. The OMC is a legal structure designed to protect the interests of owners in the development.
The OMC owns the common areas in the MUD and is responsible for the maintenance and management of these areas. The OMC also owns a share in each unit of the MUD.
It is a legal requirement that all developments have an OMC set up since 2011, so confirm this with your solicitor before you buy. If the development was completed pre-2011, the developer was obliged to establish one.
Before you buy, you should find out who the OMC is, whether a managing agent is engaged, what the annual service charge is but also what is the annual contribution to the sinking fund and its current value.
By purchasing a unit in a MUD, you sign a lease contract, which sets out legal responsibilities and obligations for you as well as the ones of the OMC and the developer. You can request of a copy of the lease from your solicitor.
Even though an OMC does not operate to generate profit, it must operate according to the rules of Company law. This includes: trading solvently, keeping a proper set of accounts, filing returns with the CRO and holding Annual General Meetings.
Should the OMC not be managed properly, it can be removed from the register by the CRO, which could in turn make it very difficult to sell any of the units. The legislation relating to Multi Unit Developments provides a provision for restoring a company back to the register should this happen, however owners should ensure it is managed properly to prevent this event.
House Rules are generally set and enforced by the OMC and when you buy a property you agree to obey these rules. If you let the property, the tenants must observe the house rules and this should be included in their lease. House rules can be amended by a vote at an AGM. It is recommended you raise your complaint/request with your OMC or managing agent first.
Sinking Funds are set up to cover non-recurring, generally larger expenses related to improvements, maintenance or refurbishment (e.g. lifts). Contributions must be made by all unit owners. The fund, held in a separate account, must be established within 3 years since the transfer of ownership to the OMC. The fees vary, depending on the size of the development and can be agreed by the members, however the MUD Act 2011 provides that the annual contribution per unit be €200.
Management Fees provide the cashflow an OMC needs to cover the cost of services and maintenance in a development. Multi-Unit Developments are in constant need of investment, attention and maintenance so service charges are an essential element to provide the funding for the management of common areas and structures.
The OMC has to cover various costs such as insurance, energy, maintenance, repairs, waste management, cleaning, caretakers, gardeners or for engaging professional advisers and Management Agents. As a member of the OMC, you have an obligation to pay these fees.
As a member of an OMC you have certain rights such as:
Should you be looking to access any of the documents or registers it is recommended you reach out to your Company Secretary, as this is the primary point of contact. If unsuccessful, you may write to your Directors or bring the matter to the AGM.
Members of an OMC are obliged:
The OMC established for the management of an MUD and is structured to be owned and controlled by all the owners of the units within the development so it is important to be aware of the difference between and OMC and a Managing Agent.
The Management Agent is a person or company, which provides services in respect of the management of Multi-Unit Developments. An OMC may choose to engage the services of such an agent to supply the maintenance and service delivery on its behalf. The obligations of the management agent are set out in a Property Services Agreement and depend on the OMC’s decision on which of its responsibilities it decides to discharge onto the Management Agent.
Managing agents are typically involved in the management of many MUDs on behalf of their respective OMCs.
The duties of management agents acting on behalf of an OMC can include:
The cost of engaging a management agent is typically covered in the yearly service charge or management fee. If you are not happy with your managing agent you should contact your OMC secretary or directors. It is a breach of lease and the MUD Act 2011 to withhold a service charge.
Further information on this topic can be found here. https://www.ccpc.ie/consumers/housing/apartments-and-duplexes/apartments-and-duplexes/