Publishing Date; Thursday the 14th day of November 2024.

 

Q I live in an Estate. Common areas consist of grass and flowerbeds, no buildings.  The current directors spent a lot of money having the area, around where they live, replanted and mulched, despite the fact that they didn’t need it, when other areas were more in need of a refurb. Would you consider this behaviour a breach of their fiduciary duties, i.e. benefitting from their position, using OMC money to “feather their own nest”. Many thanks.

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A. The Companies Act 2014 sets out the fiduciary duties of company directors. Directors must always exercise their powers in good faith and in the interest of the owners’ management company (OMC). If certain locations of the common areas appear to benefit more than others, additional directors to represent the overlooked areas will help. Directors representing varied property types and locations within the development should allow for an inclusive balanced debate, decision making and avoids leaving people feeling left out. Consider lending your time as a director rather than a critic of the OMC so that progress can be achieved to your liking.  

 

To ensure that the OMC funds are appropriately expended to the members satisfaction requires a well drafted plan in advance of its execution. The agreement of all the members of the OMC of how the service charges are to be spent will mitigate members disappointment and provide for a fair and equitable arrangement. Fail to plan, plan to fail as they say. Once the members expectations are well managed and informed, the possibility of being underwhelmed is reduced.  Neighbourly relations can be fragile and will benefit from openness and fairness.

It is important for the OMC to demonstrate equitable use of funds. This harbours respect and a buy in from all members and makes it easier to recover service charges when they are due.

 

Seek quotations from the open market with the same tender specification that the contractors can quote for, and the OMC can compare. This will allow the OMC to see what works will be done, when and for how much. A standard schedule of works for grounds keeping will indicate the frequency of weeding, litter picking, grass cutting, leaf collection and edging. Additional works such as felling or planting would be separate and their proposal for this could be shared with the members in advance of a general meeting if it is a contentious on-going issue. Avoid seeking tenders when grounds keepers are at their busiest being Spring Summer.

There is always a variation in the level of service that can be retained from the minimum of grass cutting to elaborate planting and maintenance, knowing what to expect is best.

 

Paul Huberman FSCSI FRICS is a chartered property and facilities manager, and a Fellow of the Society of Chartered Surveyors Ireland and the Royal Institute of Chartered Surveyors. 

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Author: Paul Huberman of H&H Property Management Consultants Ltd

Publish Date: 12/11/2024