Estate Management Company - What Happens If It Fails?

LarryB123

Hi all,

I thought I would post my concerns here and look for information before I go to my solicitor.

I am currently a landlord of a house in an estate which I planned to sell after I few years of paying off and reducing the negative equity.

I have just received a letter from the management agency, saying that all works have ceased, due to number of property owners not paying their annual fee, which is around €95 a year. The estate management agency still have not been paid along with the landscaper.

I have been told back in March by the agency that the non payers would be pursued in court for unpaid fees, but the latest letter is a cause for concern.

It have heard before that if a management company for the estate fails, I will not be able to sell my house.

Is this true?

Could those who paid over the last number of years go through the courts to try and force a sale?

Have you ever heard or read of a similar situation where a management company has ceased to exist and a property owner wanted to sell?

Would it be worth getting out now and pay off the negative equity over anumber of years without the overhang of a property that cannot be sold?

Should I seek advice from my solicitor who should be more knowledgable in this area?

Your advice would be appreciated

Many thanks

LarryB

valleyoftheunos

Speak to your solicitor, they are the best people to advise you.

Rainblow

LarryB123 wrote: »

Hi all,

I thought I would post my concerns here and look for information before I go to my solicitor.

I am currently a landlord of a house in an estate which I planned to sell after I few years of paying off and reducing the negative equity.

I have just received a letter from the management agency, saying that all works have ceased, due to number of property owners not paying their annual fee, which is around €95 a year. The estate management agency still have not been paid along with the landscaper.

I have been told back in March by the agency that the non payers would be pursued in court for unpaid fees, but the latest letter is a cause for concern.

It have heard before that if a management company for the estate fails, I will not be able to sell my house.

Is this true?

Could those who paid over the last number of years go through the courts to try and force a sale?

Have you ever heard or read of a similar situation where a management company has ceased to exist and a property owner wanted to sell?

Would it be worth getting out now and pay off the negative equity over anumber of years without the overhang of a property that cannot be sold?

Should I seek advice from my solicitor who should be more knowledgable in this area?

Your advice would be appreciated

Many thanks

LarryB

If the management company fails, what do you have to sell? A lease from a person who does not exist, that's what.
No bank will give a mortgage in those circumstances.

valleyoftheunos

Rainblow wrote: »

If the management company fails, what do you have to sell? A lease from a person who does not exist, that's what.
No bank will give a mortgage in those circumstances.

You clearly have no idea what you are talking about, the leasehold of the property is from the developer not the Management Company.

Rainblow

valleyoftheunos wrote: »

You clearly have no idea what you are talking about, the leasehold of the property is from the developer not the Management Company.

You clearly have no idea. The developer forms the management company and issues leases, then hands it over to the owners. A developer does not want to be stuck as landlords years after completing a development. Sometimes the developer and the management company join in the deed granting the lease but it is always provided that the developer will drop out of the picture at some point.

valleyoftheunos

Rainblow wrote: »

You clearly have no idea. The developer forms the management company and issues leases, then hands it over to the owners. A developer does not want to be stuck as landlords years after completing a development. Sometimes the developer and the management company join in the deed granting the lease but it is always provided that the developer will drop out of the picture at some point.

The developer transfers communal areas to the management company (which is made up of all the leasehold owners) not the residuary right of the leases. Entirely different things.

Even in cases where the developer has gone bust Leases are not effected as the interest in the land ie the leasehold continues to exist. the Residuary interest ie the interest of the landlord passes to its successor in title, ie whoever acquires it.

Where the Management Company goes bust the problem lies in that there is no one liable for maintaining the common areas of the estate and for that reason mortgage lenders will not give loans.

Rainblow

The developer forms the management company of which the lessees of the units become shareholders. The developer retains control of the common areas until the development is complete and then transfers control of the common areas to the management company. The management company has the fee simple so holds the reversionary interest in the units.
The developer walks away completely in most cases.
The developer going bust does not matter but the management company going bust does.
A lease cannot exist in a vacuum. There must be two parties. When one party ceases to exist so does the lease. The company would have to be restored to the register to revive the lease.
It is obvious you have never looked at an apartment owners lease. Who do you think sues when the management fees are not paid?
This famous case shows that the lease is from the management company not the developer.
http://www.courts.ie/judgments.nsf/6681dee4565ecf2c80256e7e0052005b/36b3ebdf059a5be1802578380040fdb5?OpenDocument

Lantus

LarryB123 wrote: »

Hi all,

I thought I would post my concerns here and look for information before I go to my solicitor.

I am currently a landlord of a house in an estate which I planned to sell after I few years of paying off and reducing the negative equity.

I have just received a letter from the management agency, saying that all works have ceased, due to number of property owners not paying their annual fee, which is around €95 a year. The estate management agency still have not been paid along with the landscaper.

I have been told back in March by the agency that the non payers would be pursued in court for unpaid fees, but the latest letter is a cause for concern.

It have heard before that if a management company for the estate fails, I will not be able to sell my house.

Is this true?

Could those who paid over the last number of years go through the courts to try and force a sale?

Have you ever heard or read of a similar situation where a management company has ceased to exist and a property owner wanted to sell?

Would it be worth getting out now and pay off the negative equity over anumber of years without the overhang of a property that cannot be sold?

Should I seek advice from my solicitor who should be more knowledgable in this area?

Your advice would be appreciated

Many thanks

LarryB

Inability to sell a property comes about in several ways. One is a judgement against the company which can prevent it from engaging in any conveyancing until the matter is resolved. This happened to a very large development in Dublin and was recently featured on the consumer show which you can probably still get on rte player.

The other is that the company directors either all resign and no directors are appointed (which is not permissable under company law and/or they fail to submit company accounts as required. The CRO will move to strike off a company if these matters are not resolved after a time period (in the case of annual accounts a substantial fine could be built up in the interim.)

A company which is not 'normal' and has no directors will be unable to engage in the conveyancing process or undertake any prequal conveyancing documents which solicitors request the company directors to undertake.

The buyers solicitor would simply advise any buyer to walk away if the company was in poor shape like this and legally no lease document can be signed which makes exchanging contracts quite the challenge as the OMC must sign off on the lease.

The developer issue mentioned by some is confusing things. In the developer phase the developers may well be also directors of the company but this is two distinct companies. If the developer resigns from the OMC and no one takes over the developer cannot operate the company or sign off on leases as builder XyZ as there is no legal relationship.

I would find out why the agent has not pursued these fees. In a system where you can opt out without consequence there is little incentive to pay.

From a selfish point of view if the last accounts werre submitted last month then you have year to sell up and run. If they are due in a month and there are problems not being addressed by the directors you need to get in there and do what you can. A property that cannot be bought or sold has an effective value of zero.

In the hyper bad scenario the company is struck off the MUD act allows for quick restoration through the high court but this can cost 6-10k and its unlikley your fellow residents will rush out to help you if they dont like the idea of 95 per year.

Rainblow

Lantus wrote: »

Inability to sell a property comes about in several ways. One is a judgement against the company which can prevent it from engaging in any conveyancing until the matter is resolved. This happened to a very large development in Dublin and was recently featured on the consumer show which you can probably still get on rte player.

The other is that the company directors either all resign and no directors are appointed (which is not permissable under company law and/or they fail to submit company accounts as required. The CRO will move to strike off a company if these matters are not resolved after a time period (in the case of annual accounts a substantial fine could be built up in the interim.)

A company which is not 'normal' and has no directors will be unable to engage in the conveyancing process or undertake any prequal conveyancing documents which solicitors request the company directors to undertake.

The buyers solicitor would simply advise any buyer to walk away if the company was in poor shape like this and legally no lease document can be signed which makes exchanging contracts quite the challenge as the OMC must sign off on the lease.

The developer issue mentioned by some is confusing things. In the developer phase the developers may well be also directors of the company but this is two distinct companies. If the developer resigns from the OMC and no one takes over the developer cannot operate the company or sign off on leases as builder XyZ as there is no legal relationship.

I would find out why the agent has not pursued these fees. In a system where you can opt out without consequence there is little incentive to pay.

From a selfish point of view if the last accounts werre submitted last month then you have year to sell up and run. If they are due in a month and there are problems not being addressed by the directors you need to get in there and do what you can. A property that cannot be bought or sold has an effective value of zero.

In the hyper bad scenario the company is struck off the MUD act allows for quick restoration through the high court but this can cost 6-10k and its unlikley your fellow residents will rush out to help you if they dont like the idea of 95 per year.

The agent has resigned according to the o/p. The agent has not pursued fees due to non payment of itself. The reality is that if the situation is allowed to drift the management company will be struck off as there is now no agent and presumably no work is being done.
If the company is struck off there will be extreme difficulty selling a unit.

ted1

If there is no money on the sinking fund the place will fall apart fast

Lantus

Rainblow wrote: »

The agent has resigned according to the o/p. The agent has not pursued fees due to non payment of itself. The reality is that if the situation is allowed to drift the management company will be struck off as there is now no agent and presumably no work is being done.
If the company is struck off there will be extreme difficulty selling a unit.

OP does not state that agent has resigned just that works have ceased. Presumably the agent wants people to pay their way as its how they make money as well.

The rest is what I said......

Rainblow

Lantus wrote: »

OP does not state that agent has resigned just that works have ceased. Presumably the agent wants people to pay their way as its how they make money as well.

The rest is what I said......

I took it that "works have ceased" includes the agency ceasing to work as well.

odds_on

As a prospective purchaser of an apartment during the last year, I withdrew from 5 purchases and in most cases it was due to the management company not being in a sound financial position.

I also came across a number of complexes that had apartments advertised as for sale but when contacting the EA, was told that there was a problem with the management company and no sale could proceed.

As a buyer of a property in a complex, you want to be sure that the management company has sufficient cash in bank for the day to day running of the complex and that there is a decent sinking fund in place to cover non annual repairs which are not estimated for in the cash in bank balance.

Marcusm

The charge is pretty small; and thus there should be a practical workaround. The likelihood is that the communal work is not very significant and certainly likely to be no more burdensome than that undertaken unofficially bu residents associaiton around the country. If, however, there are enclosed communal spaces or lifts meaning that the OP's management charge is not representative fo the estate as a whole, then different advice would be given.

OP: If you are in a housing estate without apartments, duplexes etc, my advice would be to try and find a group of like minded residents to shoulder the administrative burden with you. In such developments, the largest costs are likely to be the common areas insurance and the fees of the managers themselves. If you can call an AGM, have a group of you appointed as directors and self manage the estate from now on, you will at least be able to keep the ship moving forward somewhat. As part of this process, I would insist that the outgoing managing agent be asked (nay insist) to reduce any outstanding fees to reflect their inability to recover in the past. It would be disappointing if you were not able to take over the estate and manage it without significant prior liabilities.

Canvass among the neighbours (appreciate that you don't live there yourself), get a committee together with a variety of skills, some practical people to arrange the gardening, a solicitor if there is one, an accountant/bookkeeper and someone who is happy to do paper work. Next, find the most bolshy of your female neighbours and appoint her to collect the dues.

I know a number of people who have had to do this in the UK for apartment blocks and there have generally been larger sums at issue there. It is, however, in everyone's interest to ensure that there are no legal impediments to selling or remortgaging if necessary.

valleyoftheunos

Rainblow wrote: »

The developer forms the management company of which the lessees of the units become shareholders. The developer retains control of the common areas until the development is complete and then transfers control of the common areas to the management company. The management company has the fee simple so holds the reversionary interest in the units.
The developer walks away completely in most cases.
The developer going bust does not matter but the management company going bust does.
A lease cannot exist in a vacuum. There must be two parties. When one party ceases to exist so does the lease. The company would have to be restored to the register to revive the lease.
It is obvious you have never looked at an apartment owners lease. Who do you think sues when the management fees are not paid?
This famous case shows that the lease is from the management company not the developer.
http://www.courts.ie/judgments.nsf/6681dee4565ecf2c80256e7e0052005b/36b3ebdf059a5be1802578380040fdb5?OpenDocument

I've dealt with many leases both commercial and residential, short and long. You however fail to understand even the most basic principles of property law. If the grantor of a lease ceases to exist eg is struck off, merges with another company or in the case of an individual, dies, the lease does not cease to exist or die with them, the reversionary interest simply passes to their successor in title.

Given that you don't understand that fundamental element I sincerely hope you are not attempting to advise anyone on such matters.

LarryB123

Good morning all,

Many thanks for your input. Although there is some conflict amongst some of your replies the same conclusion is reached, sell up now whilst the company is still functional.

The Management Agency still exists, but the Management Company of the estate is under threat of becoming dissolved. Due to lack of funds. I have gone back on an email to the agency asking them if they have taken legal action against those that have not paid, and I was told in a previous email from them that this would take place in March 2013

The last letter that all homeowners received was that the directors (residents) of the company have stood down due to lack of cooperation from the non payers - but this is where the agency should be stepping in and chasing these guys for payment.

For those of you that queried, this is a housing estate, there are no apartment complexes. It is also an unfinished estate. When I lived there I was a member of the residents committee, and we a had a group of like minded individuals looking out for the best interests of the estate. When we came up against the non payers, they offered no solutions. Even solutions I suggested they would still not cooperate with a reduced annual bill, or help out with grass cutting should we have taken it on ourselves. I personally contacted councillors in the hope that the council would take over the estate, but they would not touch it in its unfinished state. I also looked at taking over the running of the company ourselves, but no one was willing to take on the legal, or accountancy side of things. During all of this time I insisted that the developers did not remove themselves as directors of the company, but they successfully managed to do this after I had left the estate and two residents were nominated, who have now stood down

Another point made earlier, if a management company goes bust, the house cannot be sold. If a house cannot be sold then the value is zero. I would love to know if this problem is more widespread, where the company is on the verge of disolving, and with the major push for reposessions looming, surely the banks and goverment do not want to be left with a bunch of unsellable houses due to a failed management company, something has got to give.

Many thanks again to those that replied. I have requested more information from the agency and I will also speak to my solicitor for advice. I'm not looking forward to repaying the €100000 negative equity for nothing if I decide to sell. It's a performing loan so why would the bank give us a break.

Lantus

LarryB123 wrote: »

Good morning all,

Many thanks for your input. Although there is some conflict amongst some of your replies the same conclusion is reached, sell up now whilst the company is still functional.

The Management Agency still exists, but the Management Company of the estate is under threat of becoming dissolved. Due to lack of funds. I have gone back on an email to the agency asking them if they have taken legal action against those that have not paid, and I was told in a previous email from them that this would take place in March 2013

The last letter that all homeowners received was that the directors (residents) of the company have stood down due to lack of cooperation from the non payers - but this is where the agency should be stepping in and chasing these guys for payment.

For those of you that queried, this is a housing estate, there are no apartment complexes. It is also an unfinished estate. When I lived there I was a member of the residents committee, and we a had a group of like minded individuals looking out for the best interests of the estate. When we came up against the non payers, they offered no solutions. Even solutions I suggested they would still not cooperate with a reduced annual bill, or help out with grass cutting should we have taken it on ourselves. I personally contacted councillors in the hope that the council would take over the estate, but they would not touch it in its unfinished state. I also looked at taking over the running of the company ourselves, but no one was willing to take on the legal, or accountancy side of things. During all of this time I insisted that the developers did not remove themselves as directors of the company, but they successfully managed to do this after I had left the estate and two residents were nominated, who have now stood down

Another point made earlier, if a management company goes bust, the house cannot be sold. If a house cannot be sold then the value is zero. I would love to know if this problem is more widespread, where the company is on the verge of disolving, and with the major push for reposessions looming, surely the banks and goverment do not want to be left with a bunch of unsellable houses due to a failed management company, something has got to give.

Many thanks again to those that replied. I have requested more information from the agency and I will also speak to my solicitor for advice. I'm not looking forward to repaying the €100000 negative equity for nothing if I decide to sell. It's a performing loan so why would the bank give us a break.

If the directors have already officially resigned and there are no directors listed with the CRO then you already have a big problem. When it comes time to sell the directos have to complete a MUD act prequal and answer various questions for the buyer as to the status of the company and its accounts. They also need to arrange any outstanding fees and sign the lease.

Once the buyers solicitor discovers there are no directors they will abort any attempt to purchase. This will become abundantly clear as the CRO will change the company status. Check with the CRO to see if a director resignation form has been submitted.

Estates that are managed MUST have an operating company to make them viable. Your best bet is to hold a meeting and get people appointed as directors ASAP and help put together a strategy for moving forward. Maybe the folks in the estate dont realise this as most people are oblivious to the powers of the company until its too late.

Best of luck.

LarryB123

Thank you Lantus.

A challanging time awaits me. I'll post up as much information as I can for others regardless of the outcome.

Cheers

LarryB

murphaph

Are you going to make the prospective purchasers aware of the trouble the MC is in Larry?

LarryB123

If they have good solicitors they will find out in time.

In the meantime, I will do what I can to get out of the situation. If you read my first post, it was my intentions to rent out, pay the mortgage, reduce the negative equity and sell, and not to hold onto the house. The issue with the management company has bene forced on me and other wishing to sell up (There's another house in the estate that just went up for sale yesterday)

The majority of people who live in the estate are locals who have grown up in the area. One of the arguements of the non payers is that they have no intention to sell. Also, when I was arranging a local letting agency to look after the rent, they told that they get numerous queries from potential local buyers looking for property in the estate. Basically those locals that do not want to pay don't care if the management company dissolves

It's a selfish act I know, but I have spent my life giving to everyone, I believe I should be looking out for my own interests in this situation.

Rainblow

valleyoftheunos wrote: »

I've dealt with many leases both commercial and residential, short and long.

`
Given your posts in this thread I doubt you did any more than staple documents together.

valleyoftheunos wrote: »

ou however fail to understand even the most basic principles of property law. If the grantor of a lease ceases to exist eg is struck off, merges with another company or in the case of an individual, dies, the lease does not cease to exist or die with them, the reversionary interest simply passes to their successor in title.

`
A company does not have a successor. When it is dissolved the assets pass to the state as the ultimate intestate successor. The Minister for Finance receives the legal title but is not obliged to have any dealings with it. When this happens there is no-one to assent to assignments of leases or enforce covenants.

valleyoftheunos wrote: »

Given that you don't understand that fundamental element I sincerely hope you are not attempting to advise anyone on such matters.

I think you should repeat that looking into a mirror.

valleyoftheunos

Rainblow wrote: »

`
Given your posts in this thread I doubt you did any more than staple documents together.

`
A company does not have a successor. When it is dissolved the assets pass to the state as the ultimate intestate successor. The Minister for Finance receives the legal title but is not obliged to have any dealings with it. When this happens there is no-one to assent to assignments of leases or enforce covenants.



I think you should repeat that looking into a mirror.

The mind boggles, Companies can be neither testate nor intestate so the minister receives nothing from a company "as the ultimate intestate successor". where are you getting this stuff from?l

that there is no party apparent to assent to assignments or otherwise does not mean that the lease ceases to exist only that it will be impossible to assign or "sell" as it were.

Lantus

murphaph wrote: »

Are you going to make the prospective purchasers aware of the trouble the MC is in Larry?

he wont have to, the buyers sol will do a lot of the investigation and they would have to be scrapping the bottom of the barrel to miss omething like an OMC or problems with it. Theres a pretty standard form that goes out re MUD act compliance that company directors fill out prior to any sale. No directors, no reply.

My advice is always to educate people on the importance of an OMC and the +ve's it can deliver in tmers f a well kept estate and stable property values.

When someones says they will never move all they are really saying is that they dont understand. Unless they are 96 and very ill then its very likley that one day they will move or will want or need to.

Victor

Cut the narkiness.

Moderator

engineermike

LarryB123 wrote: »

Good morning all,

Many thanks for your input. Although there is some conflict amongst some of your replies the same conclusion is reached, sell up now whilst the company is still functional.

The Management Agency still exists, but the Management Company of the estate is under threat of becoming dissolved. Due to lack of funds. I have gone back on an email to the agency asking them if they have taken legal action against those that have not paid, and I was told in a previous email from them that this would take place in March 2013

The last letter that all homeowners received was that the directors (residents) of the company have stood down due to lack of cooperation from the non payers - but this is where the agency should be stepping in and chasing these guys for payment.

For those of you that queried, this is a housing estate, there are no apartment complexes. It is also an unfinished estate. When I lived there I was a member of the residents committee, and we a had a group of like minded individuals looking out for the best interests of the estate. When we came up against the non payers, they offered no solutions. Even solutions I suggested they would still not cooperate with a reduced annual bill, or help out with grass cutting should we have taken it on ourselves. I personally contacted councillors in the hope that the council would take over the estate, but they would not touch it in its unfinished state. I also looked at taking over the running of the company ourselves, but no one was willing to take on the legal, or accountancy side of things. During all of this time I insisted that the developers did not remove themselves as directors of the company, but they successfully managed to do this after I had left the estate and two residents were nominated, who have now stood down

Another point made earlier, if a management company goes bust, the house cannot be sold. If a house cannot be sold then the value is zero. I would love to know if this problem is more widespread, where the company is on the verge of disolving, and with the major push for reposessions looming, surely the banks and goverment do not want to be left with a bunch of unsellable houses due to a failed management company, something has got to give.

Many thanks again to those that replied. I have requested more information from the agency and I will also speak to my solicitor for advice. I'm not looking forward to repaying the €100000 negative equity for nothing if I decide to sell. It's a performing loan so why would the bank give us a break.

Hi OP,
Just thought i'd give the proverbial 2 cents ; Leaving aside the freehold and lease legalities as that seems to be irrelevant and breathing contentiousness on this thread.
The difficulty as some have pointed out is that a possible purchasers sol. will look at the management company current status & recent history as part of there due diligence to the purchase. I know some don't ask for past statements of accounts for the management company - but some do. I'm not in the legal end of things so it has puzzled me why this is asked for by solicitors in some cases i'm involved in? Possibly its some solicitors choice to be extra diligent and in light of the fact that most management co.'s are under funded at present in half finished estates or receiver type sales etc.
So that review will moot the sale as the other posters have mentioned.

The problem is exacerbated by the fact you will have a poorly maintained estate which is going to make selling a difficult prospect from the outset - if it looks run down when your agent is showing the property, your unlikely to get many takers that will even get to the stage of an offer & their solicitor reviewing the status of the management company & then in turn advising the potential buyer to walk away.

I think your own legal advice relevant to the situation at hand is one avenue you have to take. I'm not sure why some of the semi legal advice is allowed on threads like this? - it seems very similar to me trying to give you structural advice in the public forum, which isn't allowed.
I'd say the second step is you and the interested owners are going to have to meet and hash out some workable solutions to the 'on the ground problems' at the estate.
Micro management and some out of the box thinking will be required to at least tread water while the situation of the company structure and officers / directors etc. is sorted for the management company.
I am party to some similar situations for developments that are in a worse off position than yours by the sound of it. And some of the things that have to be dealt with including the non fee payers , really boggles the mind.
Meeting up with the other owners whether an EGM / AGM ( not likely if there's no one to call it!) or an informal meeting at very least gets a head count of who cares, who doesn't & allows some free discussion of the matter that you as a collective of owners are faced with dealing with.
mike f :pac:

valleyoftheunos

Solicitors should always check the financial status of a Management Company in a sale like this, it would be negligent not to. There are a number of reasons for this but essentially it would be bad advice to advise a client to go ahead with such a purchase if the Man Co was insolvent or about to be struck off.

Its a somewhat academic point however as any Bank or lender is going to insist on such due diligence being done in order to make sure that its investment is secure, safe and worth what they are lending.

OP if things are as you describe them you will experience great difficulty in selling. An EGM of the Management Company should be called if it has not already and legal advice sought by the Company.

Rainblow

valleyoftheunos wrote: »

The mind boggles, Companies can be neither testate nor intestate so the minister receives nothing from a company "as the ultimate intestate successor". where are you getting this stuff from?l

STATE PROPERTY ACT, 1954
28.—(1) In this section "body corporate" does not include a body corporate dissolved by an enactment wherein it is provided that the property of that body corporate shall, on such dissolution, vest in some other person.

(2) Where a body corporate is dissolved, either before, on or after the operative date, the following provisions shall apply and have effect and, in the case of a body corporate dissolved before the operative date, be deemed to have applied and to have had effect as from such dissolution, that is to say:—

( a ) all land which was vested in or held in trust for such body corporate immediately before its dissolution (other than land held by such body corporate upon trust for another person) shall, immediately upon such dissolution, become and be the property of the State, subject however to any incumbrances or charges affecting the land immediately before such dissolution,
( b ) all personal property (excluding chattels real but including choses-in-action) which is vested in or held in trust for such body corporate immediately before its dissolution (other than personal property held by such body corporate upon trust for another person) shall, immediately upon such dissolution become and be State property.
(3) Subsection (2) of this section shall have effect subject and without prejudice to any order made by a court under section 223 or subsection (6) of section 242 of the Companies (Consolidation) Act, 1908.

valleyoftheunos wrote: »

that there is no party apparent to assent to assignments or otherwise does not mean that the lease ceases to exist only that it will be impossible to assign or "sell" as it were.

It only exists because the minister has title to the fee simple. Since he won't do anything in connection with it, the lease is useless until the company is restored or the minister parts with possession to another entity who will deal with it.

Lantus

Rainblow wrote: »

STATE PROPERTY ACT, 1954
28.—(1) In this section "body corporate" does not include a body corporate dissolved by an enactment wherein it is provided that the property of that body corporate shall, on such dissolution, vest in some other person.

(2) Where a body corporate is dissolved, either before, on or after the operative date, the following provisions shall apply and have effect and, in the case of a body corporate dissolved before the operative date, be deemed to have applied and to have had effect as from such dissolution, that is to say:—

( a ) all land which was vested in or held in trust for such body corporate immediately before its dissolution (other than land held by such body corporate upon trust for another person) shall, immediately upon such dissolution, become and be the property of the State, subject however to any incumbrances or charges affecting the land immediately before such dissolution,
( b ) all personal property (excluding chattels real but including choses-in-action) which is vested in or held in trust for such body corporate immediately before its dissolution (other than personal property held by such body corporate upon trust for another person) shall, immediately upon such dissolution become and be State property.
(3) Subsection (2) of this section shall have effect subject and without prejudice to any order made by a court under section 223 or subsection (6) of section 242 of the Companies (Consolidation) Act, 1908.



It only exists because the minister has title to the fee simple. Since he won't do anything in connection with it, the lease is useless until the company is restored or the minister parts with possession to another entity who will deal with it.

Based on legal advice I have recently obtained this cannot happen. i.e. the dept of environment takes hold of the title which does happen in some cases for estates and their respective green areas (although this occurs where there is no OMC and/or where the builder is the sole owner.) The reason for this is that both the owners and the company have a beneficial interest in the lease and therefore it cannot simply revert to the state. In other words there are multiple parties involved as I understand it.

ledonb

Lantus wrote: »

Based on legal advice I have recently obtained this cannot happen. i.e. the dept of environment takes hold of the title which does happen in some cases for estates and their respective green areas (although this occurs where there is no OMC and/or where the builder is the sole owner.) The reason for this is that both the owners and the company have a beneficial interest in the lease and therefore it cannot simply revert to the state. In other words there are multiple parties involved as I understand it.

It sounds you are talking about taking in charge. That is a different thing entirely and has no effect on title per se.
When an attempt is made to restore any company the consent of the minister for finance is sought.

Rainblow

Lantus wrote: »

Based on legal advice I have recently obtained this cannot happen. i.e. the dept of environment takes hold of the title which does happen in some cases for estates and their respective green areas (although this occurs where there is no OMC and/or where the builder is the sole owner.) The reason for this is that both the owners and the company have a beneficial interest in the lease and therefore it cannot simply revert to the state. In other words there are multiple parties involved as I understand it.

You are talking about situations where there is no OMC. This is a thread about a situation where there is an OMC and it is struck off. You are confusing things utterly.

mathepac

AN ACT TO MAKE PROVISION FOR THE VESTING AND MANAGEMENT OF, AND TO CONTROL THE ALIENATION OF, CERTAIN LAND AND OTHER PROPERTY BELONGING TO THE STATE AND TO MAKE PROVISION FOR OTHER MATTERS RELATING TO STATE PROPERTY AND STATE AUTHORITIES.

I wonder if you have all suddenly taken leave of your collective senses. An outbreak of Anticipatory Heatwave Madness aka AHEM?

Multi-unit developments on private land and State land or property - what's the connection? Surely the MUD Act 2011 and the Campanies Act 1963 are the relevant bits of legislation for this discussion? IANAL

OP, did you take any active part in the OMC prior to its entry into corporate limbo?

Lantus

mathepac wrote: »

AN ACT TO MAKE PROVISION FOR THE VESTING AND MANAGEMENT OF, AND TO CONTROL THE ALIENATION OF, CERTAIN LAND AND OTHER PROPERTY BELONGING TO THE STATE AND TO MAKE PROVISION FOR OTHER MATTERS RELATING TO STATE PROPERTY AND STATE AUTHORITIES.

I wonder if you have all suddenly taken leave of your collective senses. An outbreak of Anticipatory Heatwave Madness aka AHEM?

Multi-unit developments on private land and State land or property - what's the connection? Surely the MUD Act 2011 and the Campanies Act 1963 are the relevant bits of legislation for this discussion? IANAL

OP, did you take any active part in the OMC prior to its entry into corporate limbo?

Agreed, all the legal chatter is not constructive as it doesn't offer any real advice.

The OP needs to grasp the nettle and get his company which he is a member of up and running again and directors put in place that will run it for the long term for the benefit of all. Get together with the other residents and talk and arrange a meeting and get a plan together.

If the members of the company dont feel they want or need such a device then some educating will be required and expalining. Possibly a leaflet or letter to all explaining that no property can be bought or sold and the cost of restoring a company via the high court which can be in the 6 to 10k region. Not to mention how the residents intend to run the estate and look after it long term.

An estate made up of houses can be relatilvley cheap subject to economies of scale. They could purchase their own equipment for green areas for example.

Bluegrass1

mathepac wrote: »

Multi-unit developments on private land and State land or property - what's the connection? Surely the MUD Act 2011 and the Campanies Act 1963 are the relevant bits of legislation for this discussion? IANAL

The key issue is private land. All land has to have an owner. Either a natural person i.e. a human or an artificial person i.e a company. When a person dies (a natural one) or is dissolved (an artificial one) the property must pass to someone. In the case of a company which cannot make a will or have heirs the assets pass to the state. It happens to management companies in Ireland quite frequently. It is an expensive hassle for owners of apartments to rectify.

Lantus

Bluegrass1 wrote: »

The key issue is private land. All land has to have an owner. Either a natural person i.e. a human or an artificial person i.e a company. When a person dies (a natural one) or is dissolved (an artificial one) the property must pass to someone. In the case of a company which cannot make a will or have heirs the assets pass to the state. It happens to management companies in Ireland quite frequently. It is an expensive hassle for owners of apartments to rectify.

Expensive but a lot easier thanks to the MUD act. Any OMC that has been struck off can be re-instated 6 yeas after this happening through the high court. But yes, its an expensive problem.

There are huge number of developments in Ireland that use management companies and the failure to manage these and run them properly is going to be the next gigantic problem coming down the line for home and apartment owners. As in the OP's case its already starting to hit home.

OMC's require a good deal of education on the part of each member to fully understand what it is and why its there. Something they probably had zero idea even existed when we all went out in a rush to buy buy buy.

The consumer show raised the issue a little while ago but there really needs to be a national push/awareness so everyone in these estates is given some support and can be given the tools and knowledge they need.

The_Conductor

In brief-

If the management company is dissolved- its assets become vested in the Minister for Finance. You may petition the Minister to have the company re-instated, and its previous assets ascribed to it- it is a timely process and damn expensive. Under the MUD act- you can wait 6 years, and petition the high court instead- easier and cheaper- but no less time consuming.

With respect of the two Directors stepping down- the company is in breach of company law, and regardless of what you do- liable to be sanctioned for this breach, come what may (what would normally happen if the company continued trading prior to the directors stepping down, while insolvent, is the directors would be proscribed from becoming directors for a number of years (or permanently) and they in turn would most probably take action against those who put them in that position (as has happened twice in the past year).

OP- If you could clarify whether you have freehold or leasehold of the house in the estate, it would clarify matters greatly. If the management company is struck-off and you have leasehold rather than freehold rights- you cannot sell the property- as the beneficial owner would then be the Minister for Finance. If, on the other hand- only the common areas are ascribed to the Management Company- its a different story- you'll have problems, yes, but not nearly to the extent that you'd have if its a leasehold on the house itself.

Mrs OBumble

Lantus wrote: »

... Possibly a leaflet or letter to all explaining that no property can be bought or sold

Is the problem that no property can be bought or sold, or just that no prospective buyer can get a mortgage from a bank?

If the price is low enough, it's usually possible to find a buyer who doesn't need to borrow from an official source ...

The_Conductor wrote: »

OP- If you could clarify whether you have freehold or leasehold of the house in the estate, it would clarify matters greatly.

This. There is no way that the same legal structure applies to every estate / complex in the country. I don't see how much advice can have been given on this thread without having a lot more information about the specific legal / ownership status of the property.

Bluegrass1

Mrs OBumble wrote: »

Is the problem that no property can be bought or sold, or just that no prospective buyer can get a mortgage from a bank?

If the price is low enough, it's usually possible to find a buyer who doesn't need to borrow from an official source ...

An apartment is sold by way of the assignment of the lease. The buyer takes over from the holder of the lease and assumes all rights and liabilities under the lease. In a case where the OMC has been dissolved the Minister for Finance is the landlord. The minister will refuse to do anything with the property. Leases invariably contain a clause that an assignment is subject to the consent of the landlord.
A purchaser will want to see the written consent of the landlord to the assignment and confirmation that there has been no breach of covenant by the vendor. Nobody wants to buy and get a bill for unpaid service charges and be forced to undo other breaches of the lease such as re-instate walls, remove a satellite dish etc.
The discount needed to take an assignment in circumstances where a management company had been dissolved would be substantial.

Bluegrass1

The_Conductor wrote: »

In brief-

If the management company is dissolved- its assets become vested in the Minister for Finance. You may petition the Minister to have the company re-instated, and its previous assets ascribed to it- it is a timely process and damn expensive. Under the MUD act- you can wait 6 years, and petition the high court instead- easier and cheaper- but no less time consuming.

The normal procedure to restore a company is to request the Registrar of Companies to do it within one year of strike off. The MUDS ACT extends this from 1 year to six years.
Outside of those times but before 20 years application must be made to the High Court showing the consent of the Minister for Finance, the Revenue Commissioners and the Minister for Enterprise and Employment. This is much more expensive that applying to the Registrar. All outstanding returns must be filed which in itself can be expensive as penalties for late filing have to be paid.

Domo40plus

Constitution 43.1.2
The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.

Domo40plus

40.6.1.iii
The right of the citizens to form associations and unions.
Laws, however, may be enacted for the regulation and control in the public interest of the exercise of the foregoing right

Here the right also applies if you don’t want to be a part of a union or association. So my thoughts are here above all other articles, that I should have the right to purchase my home and not be forced to join an association or company. This right has been tested and won before in the following cases.
Educational Company v Fitzpatrick [1961] IR 345 and
Meskell v CIE [1973] I.R. 121

Domo40plus

40.6.1.iii
The right of the citizens to form associations and unions.
Laws, however, may be enacted for the regulation and control in the public interest of the exercise of the foregoing right

Here the right also applies if you don’t want to be a part of a union or association. So my thoughts are here above all other articles, that I should have the right to purchase my home and not be forced to join an association or company. This right has been tested and won before in the following cases.
Educational Company v Fitzpatrick [1961] IR 345 and
Meskell v CIE [1973] I.R. 121

If you live in a stand alone house that is freehold and you are in a managed estate your constitutional rights have been overlooked when you were forced to sign a covenant or agreement.

Paulw

Domo40plus wrote: »

Here the right also applies if you don’t want to be a part of a union or association. So my thoughts are here above all other articles, that I should have the right to purchase my home and not be forced to join an association or company. .

You are not joining an association nor a union. You are becoming a member/shareholder of a Ltd company.

You are not forced. It is totally your choice if you buy the property or not.

There are large legal differences between a union/association and being a member/shareholder of a Ltd company.

Domo40plus

Hi Paulw, I my case I was forced and in a lot of other places you are forced as you can't sign for the house unless you agree to join the company. I had moved out of my house and no where was it stated that this was a managed estate or that I had to pay fees. I was moving from Dublin to Meath. So it was only at the time of signing that I found out this problem. Yes, I could have pulled out but what happens to my family and what happens to the money invested already in the property??
In relation to the company - are you saying that once you join you can never leave??? Does that not diminish your rights??

Paulw

Domo40plus wrote: »

So it was only at the time of signing that I found out this problem. Yes, I could have pulled out but what happens to my family and what happens to the money invested already in the property??
In relation to the company - are you saying that once you join you can never leave??? Does that not diminish your rights??

If you only found out at the time of signing then you should have some stern words with your solicitor. You also didn't do much research on where you were buying.

Deminish what rights? Of course you can't leave the management company, unless you sell up your property.

You buy a property in a managed development, then you become a member of the management company, and the contracts you sign give all the legal requirements on both you and the management company.

Lantus

Bluegrass1 wrote: »

The normal procedure to restore a company is to request the Registrar of Companies to do it within one year of strike off. The MUDS ACT extends this from 1 year to six years.
Outside of those times but before 20 years application must be made to the High Court showing the consent of the Minister for Finance, the Revenue Commissioners and the Minister for Enterprise and Employment. This is much more expensive that applying to the Registrar. All outstanding returns must be filed which in itself can be expensive as penalties for late filing have to be paid.

Bear in mind that the 'quick' restoration procedure via CRO only applies IF the transfer of common areas has fully completed. For a lot of estates where the builder never did this its a high court process still (circa 10-15k.)