Management Companies

01 What is a Management Company?

A so called "management company" is a company registered in the CRO usually as a Company limited by Guarantee (CLG) or a Designated Activity Company (DAC),  with an object clause to manage a multi-unit development. The "management company" owns the common areas of the development such as: car parks, green space, stairwells, lifts and communal hallways and maintains them for the benefit of all property owners and typically provides for insurance cover.

On acquiring a unit within the development, in addition to the apartment or house such person also shares ownership of the common areas. Stemming from this, it is usually a condition of the purchaser's contract that they sign a co-ownership agreement which obliged them to become a member of the management company.    These co-ownership agreements are essentially rooted in the laws of contract and private property,  rather than in any particular Act of the Oireachtas.  Following on from this, it should be clear that the requirement to become a member of a management company is not a requirement under company law. 

There is no special body of company law which applies only to so called "management companies" or is applied differently so far as management companies are concerned.  The "FAQ" (Frequently Asked Questions) section of this website answers most general company law type questions in relation to all companies.  Most of the issues arising in the so called "management companies" are not company law issues and the ODCE cannot assist.   The attached document lists the breaches of company law where ODCE can assist with.

02 Are management companies a product of company law?

No. It is important to stress that management companies have no special meaning and are in no way a requirement of company law. There is nothing in the Companies Act which states that a management company must be brought into existence in connection with any multi-unit development, and some multi-unit developments exist which do not have a management company associated with them. Furthermore, it is important to point out and emphasise that there is no special body of company law that applies solely to management companies.

03 Where can I find the legal source from which management companies operate?

Court Rulings

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The Director of Corporate Enforcement v. John McElhinney

01 November 2006


Details of Defendant: 
John McElhinney, 107 Foxfield Grove, Raheny, Dublin 5. 

Venue: 
Dublin District Court 

Judge: 
District Judge McVeigh 

Alleged Offence: 

The defendant was charged on two counts: 
(1): With making a statement in the form of a “Certificate of Director and Secretary” in purported compliance with the provisions of Section 18 of the Companies (Amendment) Act, 1986, which was false in a material particular in that it stated that the report attached thereto was a true copy of the report of the auditors in respect of a company in circumstances where he knew it to be false or were reckless as to the same. Contrary to Section 242(1) and Section 240(1) of the Companies Act, 1990. 

(2): With the production of a “Certificate of Director and Secretary” in purported compliance with the provisions of Section 18 of the Companies (Amendment) Act, 1986, which was false in a material particular in that it stated that the report attached thereto was a true copy of the report of the auditors in respect of a company in circumstances where he knew it to be false or were reckless as to the same. Contrary to Section 242(1) and Section 240(1) of the Companies Act, 1990. 

Outcome: 
The defendant pleaded not guilty, and therefore the two charges were heard in full. The Court convicted the defendant in respect of charge (1) above and imposed a fine of €800 and ordered witness costs in the sum of €1,120 and ordered prosecution costs in the sum of €290. 

In respect of charge (2), the Court struck out the charge. 

Recognisance of €800 was fixed by the Court in the event of an appeal 
 

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