Developer in liquidation

Madeleine27

Hello,
I'm in the process of buying an apt and my solicior told me today that the developer never handed over the common areas to the management company. The developer is now in liquidation. This apartment block was completed in 1999.
Does the liquidator have the power to sign over the common areas to the management company? I'm nervous about going through with the sale now. What will it mean to me?

godtabh

Madeleine27 wrote: »

What will it mean to me?

Isnt that a question that your solicitor should be answering?

The_Conductor

Technically the purpose of the Management Company is to act as a legal entity in which the buildings and common areas of an estate are vested. If the common areas of the estate are not vested in the company- it might be argued that the company is effectively squatting on property it does not own.

At very least you might have serious issues with any claims made on the block insurance.

Your solicitor needs to check this out and clarify the situation.

S.

mrgaa1

management companies are a waste of time. Demand that your council takes over the ground or buy it yourself.

Paulw

mrgaa1 wrote: »

management companies are a waste of time. Demand that your council takes over the ground or buy it yourself.

Spoken by someone who doesn't understand management companies.

The management company exists. You can't demand that the council takes over. Nor can you buy common land owned by the management company.

The OP definitely needs to talk to their solicitor, and make the solicitor explain the situation properly, and how it may effect the situation.

Jo King

smccarrick wrote: »

Technically the purpose of the Management Company is to act as a legal entity in which the buildings and common areas of an estate are vested. If the common areas of the estate are not vested in the company- it might be argued that the company is effectively squatting on property it does not own.

At very least you might have serious issues with any claims made on the block insurance.

Your solicitor needs to check this out and clarify the situation.

S.

The management company cannot be squatting. In order to squat the squatter must enter without permission. The management company is of course given permission by the freehold owner to enter the property. It is the freehold owner who forms the management company in the first place. the usual apartment lease provides the the original developer insures the building until it is handed over to the management company who then take over. I have had an insurance claim paid and the freehold was not handed over until years after. The danger for the o/p may be in the fact that there may be charges outstanding against the land and if the management company takes an assignment of the fee simple interest it may be burdened with responsibility for those charges.

Raskolnikov

Madeleine27 wrote: »

Hello,
I'm in the process of buying an apt and my solicior told me today that the developer never handed over the common areas to the management company. The developer is now in liquidation. This apartment block was completed in 1999.
Does the liquidator have the power to sign over the common areas to the management company? I'm nervous about going through with the sale now. What will it mean to me?

That statement throws up a massive warning sign to me. There are tons of horror stories out there where developer controlled management companies are basically extorting residents. If you do a search here or on neighbours.ie, you'll see that the experience is not isolated.

jmayo

Raskolnikov wrote: »

That statement throws up a massive warning sign to me. There are tons of horror stories out there where developer controlled management companies are basically extorting residents. If you do a search here or on neighbours.ie, you'll see that the experience is not isolated.

OP I agree with Raskolnikov above.
There are untold stories of woe where developer has never finalised or not sold all of the properties and thus can keep control over the management company.
That ways leads to trouble and heartache, not to mention big cheques.

You are in weird situation where developer has gone into liquidation, so AFAIK the question then is who takes ownership of their interests and possibly has some control over commona areas and ultimately involvement with management company ?

Either way life is too short and properties too plentiful (or will be when reality finally kicks in) to get involved in situation that is already far from crystal clear.
Walk away now.
Oh and buy a house not an apartment.

conorhal

jmayo wrote: »

OP I agree with Raskolnikov above.
There are untold stories of woe where developer has never finalised or not sold all of the properties and thus can keep control over the management company.
That ways leads to trouble and heartache, not to mention big cheques.

You are in weird situation where developer has gone into liquidation, so AFAIK the question then is who takes ownership of their interests and possibly has some control over commona areas and ultimately involvement with management company ?

Either way life is too short and properties too plentiful (or will be when reality finally kicks in) to get involved in situation that is already far from crystal clear.
Walk away now.
Oh and buy a house not an apartment.

Perhaps somebody can explain the legality of the situation, but can't the residents form their own management committee and fire the existing management company if it is controlled by the developer?

There was a similar situation were I live, the common area's were never signed over to the (developer controlled) management company. The developer had put access rights through the property in the lease to grant him access to an adjacent site, and when he tried to open up access, and threatened to build apartments all over the common area if he was not given control of the car park (on which he wanted to build offices) the residents committee fired the management company, threatened to present the builder with a bill for the 10yrs of maintenance to the property since, if he still owned it, he was the one responsible for it and also threatened to tie him up in an expensive court case for the next 10yrs that he had no hope of winning. He soon backed off and signed over the common areas. Feckin' chancer

jmayo

conorhal wrote: »

Perhaps somebody can explain the legality of the situation, but can't the residents form their own management committee and fire the existing management company if it is controlled by the developer?

There was a similar situation were I live, the common area's were never signed over to the (developer controlled) management company. The developer had put access rights through the property in the lease to grant him access to an adjacent site, and when he tried to open up access, and threatened to build apartments all over the common area if he was not given control of the car park (on which he wanted to build offices) the residents committee fired the management company, threatened to present the builder with a bill for the 10yrs of maintenance to the property since, if he still owned it, he was the one responsible for it and also threatened to tie him up in an expensive court case for the next 10yrs that he had no hope of winning. He soon backed off and signed over the common areas. Feckin' chancer

Not sure about the legal issues in the OPs case, but there are definetly legal issues there.
The question I would ask is, would you really want to buy into a development/complex that will result in you being involved, albeit as part of a residents grouping, in legal wrangles from the very start ?

My opinion would be let the people who are already there sort out the mess without you jumping headlong into it.

wicklowdub

The developer starts up the managment company and holds a majority of voting rights, once the property is finished and all the units are sold then the county council is supposed to take the common areas into charge (providing that the estate is up to a certain standard). However what appears to be happening is that unit(s) are not being sold enabling the developer to remain on as a director of the management company and veto whatever they like.

Jo King

Councils do not take private housing developments in charge. The residents cannot fire the management company. The management company can fire the managing agent. If the residents do not control the management company there is nothing they can do regarding the managing agent.

mrgaa1

management companies are still a waste of time - look at all these posts and all the hassle. Get the council to take it over.

jmayo

mrgaa1 wrote: »

management companies are still a waste of time - look at all these posts and all the hassle. Get the council to take it over.

You are supposed to be a property investor if I correctly recall some of your other posts ?

Management companies may be wastes of time due to continued involvement of develoeprs/builders and more importantly too costly, but they are necessary and here to stay since councils do not want or can not afford to be involved in every development.

Do you think council X or Y want to be bothered about the upkeep of common areas in apartment blocks or bothered about mowing the grass in the open areas of some gated community.
Why not read the preceeding post to yours to actually get an idea about management companies.

Budget Marketing

I would be nervous going through any purchase of an apartment, regardless of if the developer was in liquidation.

Victor

mrgaa1 wrote: »

management companies are still a waste of time - look at all these posts and all the hassle. Get the council to take it over.

Its difficult enough to have councils take over housing estates, never mind apartment blocks that are an order of scale more complicated.

Tell me, which council insure the structure of buildings they do not own?