New governance guide for directors of owners’ management companies

Owners’ Management Companies: A Concise Guide for Directors, published by Chartered Accountants Ireland and The Housing Agency, identifies 10 considerations for directors of the organisations that manage the shared spaces and services of multi-unit developments such as apartment buildings and housing estates.

Increasing numbers of people in Ireland live in apartments and houses that are part of multi-unit developments, relying on common areas, or shared amenities and services. Under Irish law, an owners’ management company (OMC) is required to legally own the common areas and be responsible for their upkeep on behalf of its members, who may be owner-occupiers or landlords. Between 2002 and 2016 the number of apartments in Ireland rose by 85%.  In 2019, planning permissions in Ireland for apartments exceeded those for houses for the first time. This high level of growth is expected to continue for some time to come.

OMCs do not act for commercial gain, but are custodians of the physical, built environment in which people live. Most directors of OMCs are volunteers. However, they have clear responsibilities and fiduciary duties and they are responsible for compliance with various legislation and regulation, including company law (if incorporated) and the Multi-Unit Development Act 2011.

An OMC director must act in the best interests of the company while having regard to the interests of all its stakeholders. At times, it can be complex work; OMC directors are often required to deal with service providers, and professional advisors such as accountants, auditors, and solicitors. They can also interact with resident associations, regulators and government agencies.

Published in May 2021, Owners’ Management Companies: A Concise Guide for Directors identifies good governance practice in 10 key areas for the directors of OMCs:

1.            Directors’ duties

2.            Board effectiveness

3.            Performance versus conformance

4.            The company constitution and register of members

5.            Finances, cash and debtors

6.            Company accounts and statutory audit

7.            The role of the company secretary

8.            Outsourcing

9.            Annual general meetings

10.          Dispute resolution

A copy of Owners’ Management Companies: A Concise Guide for Directors is available to download from the Chartered Accountants Ireland Governance Resource Centre.

You can watch the webinar launch of the Owners’ Management Companies: A Concise Guide for Directors by clicking here.