I am in the process of retiring to from the US and have recently viewed an apartment here which I fell in love with. I tried to investigate the finances and the management company, but was completely baffled. It appears that the registered office is at one of the four buildings in the apartment complex, but the individual apartment is not identified (just a brass plate outside)? So, at least on a quick visit, I couldn’t inspect the register of members, etc. Furthermore, a resident advised me that, unusually, there is no managing agent, as the complex is self-managed by one owner who is also a director and a company secretary. The auditor is apparently the personal accountant of this owner and she does not have to be licensed by the Property Services Regulatory Authority (PSRA) as the complex is deemed to be self-managed. I am familiar with apartment living in New York, which is extremely strict and rigorous when it comes to regulations, finances etc. I would appreciate any advice.
A registered office of a company must be more than merely a post box for receiving communication, as there must be a facility for viewing company files, such as the register of members. It is also a requirement to have the company name clearly legible and obvious on the outside of the office or place, even if it is the residence of a director of the company.
Failure to comply with the Companies Act 2014 section 169 is a category three offence and thus can give rise to up to six months in prison and or a class A fine (up to €5,000) payable by the company and all its directors.
Self-managed apartment blocks are legal and often successfully run. It is, however, a requirement that the directors undertaking the function of a manager for the estate do not receive any remuneration, benefit in kind, inducement or gain for their time and efforts, without exception. In short, there is no reward at all for directors who self-manage multi-unit developments, other than hands-on control and first-hand operational knowledge of their owners’ management company within which sits their investment or home.
A property service provider (PSP) must have the following European Credit Transfer and Accumulation System (ECTS) credits or appropriate experience: Valuations 7.5; marketing/practice knowledge 30; economics 7.5; law 30; property management 20; building construction/technical 7.5; business studies/professional development 7.5. (“The number of ECTSs referred to above shall be supplemented by 10 ECTS credits in one or more of the specified subjects.” PSRA Guide to Becoming a PSP.)
The argument against not using a PSP is that the members do not have access to the PSRA compensation fund in the event of fraudulent activity. The PSRA is also required to audit PSPs to review their practices as set out by the Property Services Regulations Act 2011 and Client Moneys Regulations 2012. As with all regulatory bodies, the PSRA only has powers over licence holders and may only seek to have an unlicensed PSP cease their activities.
Paul Huberman is a chartered property and facilities manager and a member of the Society of Chartered Surveyors Ireland.