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Can a management company be split in two?

  • 24-02-2011 10:27pm
    #1
    smytten
    Registered Users, Registered Users 2 Posts: 5 ✭


    Could anyone tell me if it's possible (and if so what's involved) in splitting a management company in two? The management company is currently responsible for the management of a complex that comprises of 5 blocks apartments. Can this company be split into two separate companies, company A would look after 2 blocks of the apartments while company B would look after the other 3?

    Many thanks.


Comments

  • #2
    Ste.phen
    Registered Users, Registered Users 2 Posts: 2,808 ✭✭✭Ste.phen


    One of the more knowledgable peeps will surely be along with a definite answer, but as I understand it, it's technically possible, but would need the agreement of 100% of shareholders (and if i had to guess why you want to do this, i suspect that won't be forthcoming), and not having a single entity may be in breach of your planning permission depending on what conditions were put down at the time of granting it.


  • #3
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭Victor


    I don't see any problem with it. I'm not sure that 100% agreement is needed. However, it is something that is likely to require CRO and possibly court permission to a avoid a situation where certain shareholders will cherry-pick the better assets. Remember you don't own your apartment, you own a share in the company that also entitles you to a lease to a specific apartment. It may also be impractical to do, depending on layouts, shared services, car parks, etc.

    Imagine the foundations of one of the buildings are dodgy and repairs will potentially cost millions. There is a problem with the insurance and the builder / developer has gone bust. There is no Homebond in place.

    So, the residents of the other blocks get together and split the company, landing the owners of the dud building to deal with the problem. This would be rather unfair on those owners.


  • #4
    bath handle
    Banned (with Prison Access) Posts: 370 ✭✭bath handle


    In theory it is possibly. Form another company. Sell all of the freehold interest in two of the blocks to the New company with the burden of the leases to the owners of the units. A resolution of the original company would be needed first. A contract between the two companies regarding common interests should be drawn up.


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