« back 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?

The Director of Corporate Enforcement v. Phelim Scanlon and Marion (Mary) Scanlon.

20 December 2005

Details of Defendant: 
Phelim Scanlon

Address:                                                                                                                                       Mooretown, Rathoath, Co. Meath 

Mary (otherwise Marion) Scanlon

Address:                                                                                                                                      Moorestown, Ratoath, Co. Meath 

Venue: 
Dunshaughlin District Court 

Judge: 
District Judge Brophy 

Alleged Offence: 
The defendants were charged with contravention of Section 161 (1) of the Companies Act, 1990 in acting as a director or secretary of a company, while subject to a restriction order made by the High Court pursuant to Section 150 of the same Act and failing to abide by the conditions prescribed in the Act for continuing to act as a company director or secretary. 

Outcome: 
In relation to Phelim Scanlon:
On a plea of guilty on one count of acting as the director in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to St. Mochta’s Property Management Company Limited, the court convicted the defendant and imposed a fined €1,904, and awarded costs to the prosecution of €300. 

On a plea of guilty on one count of acting as the secretary in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to St. Mochta’s Property Management Company Limited, the court convicted the defendant and imposed a fine €500. 

On a plea of guilty on one count of acting as the director in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Cygnet Properties Limited, the court convicted the defendant and imposed a fined €1,904. On a plea of guilty on one count of acting as the secretary in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Cygnet Properties Limited, the court convicted the defendant and imposed a fine €500. 

On a plea of guilty on one count of acting as the director in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Cardy Rock Management Company Limited, the court convicted the defendant and imposed a fined €1,904. 

On a plea of guilty on one count of acting as the secretary in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Cardy Rock Management Company Limited, the court convicted the defendant and imposed a fine €500. 

On a plea of guilty on one count of acting as the director in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Coolmine Properties Limited, the court convicted the defendant and imposed a fined €1,904. 

On a plea of guilty on one count of acting as the secretary in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Coolmine Properties Limited, the court convicted the defendant and imposed a fine €500. 

In relation to Mary (otherwise Marion) Scanlon:
On a plea of guilty on one count of acting as the director in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Cardy Rock Management Company Limited, the court convicted the defendant and imposed a fined €1,904 and awarded costs to the prosecution of €300. 

On a plea of guilty on one count of acting as the director in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Golden Meadow Construction Limited, the court convicted the defendant and imposed a fined €1,904. 

On a plea of guilty on one count of acting as the secretary in relation to a breach of S161 (1) of the Companies Act, 1990 in relation to Golden Meadow Construction Limited, the court convicted the defendant and imposed a fine €500. 

Having been convicted of an offence under Section 161 of the Companies Act 1990, both Phelim Scanlon and Mary (otherwise Marion) Scanlon are deemed, pursuant to Section 161(2) of the same Act, to be the subject of a disqualification order. The effect of this provision is that both Phelim Scanlon and Mary (otherwise Marion) Scanlon are disqualified from being appointed or acting as auditor, director or other officer, receiver, liquidator or examiner or being in any way, whether directly or indirectly, concerned or taking part in the promotion, formation or management of any company or society registered under the Industrial Provident Societies Acts 1893 to 1978 for a period of 5 years commencing 20th December, 2005. 

Recognisance was fixed by the Court in the event of an appeal.

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Office of the Director of Corporate Enforcement
 16 Parnell Square, Dublin 1
Telephone: +353 1 858 5800
Email: info@odce.ie