Report on Multi-Unit Developments - Law Reform Commission

entitlement to vote at owners‘ management company meetings. 61 In the
Commission‘s view it important to bear in mind that the unit owners have made
the fiscal investment in the multi-unit development and they must, therefore,
have the primary say over how their owners‘ management company is run. The
interests of the unit owner may not, in this respect, be the same as those of an
occupying tenant.
3.60 Nonetheless, the Commission acknowledges that tenants have a
legitimate interest in good governance arrangements in the multi-unit
development. The Commission has observed earlier that, in the case of local
authorities who own property in a given development, it should be mandatory
for those authorities to have their interests represented at the meetings of the
owners‘ management company. There is no reason in principle why local
authority tenants should not approach the relevant local authority in advance of
the meeting setting out the interests they wish to have represented on their
behalf. The same approach applies to private tenants in approaching the unit
owner, their landlord.
3.61 Indeed, the Commission notes that the existing company law code
already provides that a member of any company, including a unit owner in a
multi-unit development, may nominate any other person to act as his or her
proxy at a company meeting. The Commission considers that this existing
discretion should not be seen as compulsory, whether in general or in the
specific context of multi-unit developments.
3.62 The Commission recommends that unit owners in multi-unit
developments should retain the discretion under the existing company law code
to nominate any other person as their proxy at meetings of the owners‟
management company.
(9) <strong>Report</strong>s, Accounts and Auditing
3.63 The Commission provisionally recommended in the Consultation
Paper that the accounts annexed to the annual return for owners‘ management
companies should take the form of an income and expenditure balance sheet
rather than a profit and loss account 62 and we do not see any reason to depart
from this. This is because profit and loss accounts are more suited to the
financial status of going concerns and they therefore include details such as
breakdown of the worth of the company‘s capital assets. In other words, the
level of complexity of the accounts is potentially unnecessary for an owners‘
management company. On the other hand, an income and expenditure balance
sheet would provide a rather more comprehensible and relevant set of accounts
61
Op cit, paragraphs 4.85-4.95
62
(LRC CP 42-2006) paras 4.43-4.44.
77