Paying accountant fee for managment company

ponceprhea

I live in a small cul de sac of 3 houses.
When i originally purchased the house we were not to know that the builder was washing his hands of the management of the shared land between the 3 houses.
We were then told by his solicitor that as residents we would have to start up a mangement company and then send in a yearly account to the state. This is where the accountant fee comes in.

Now, I have enquired with the council and they say that for the land to become their responsibility they have to wait until the builder says so(not sure about this exactly)

So at the moment, between the 3 houses we have to pay an accountant to provide the legal service for the management company.

This doesn't seem correct to me and with extra property taxes and water charges it is becoming an unbearable annual charge.

Can anyone advise?

The_Conductor

Who owns the land?
Its only 3 properties.
If its vested in a management company- then yes, you will have to provide an annual return to the CRO, with certified accounts.
Yes, it is ridiculous.
Far more satisfactory- would be for the Management Company to divest itself of its assets (the land), split 3 ways, between the 3 properties, and use the proceeds to cover the legal fees, stamp duty (if applicable) etc.
Personally- I'd suggest apportioning the land between the 3 properties- and taking that approach- however I'm not familiar with the exact details, so perhaps having the council take the property in charge might be preferable to you (but then, of course, you and your neighbours, won't own the land).

Its a bit of a ridiculous situation- but you do have options.

The_Conductor

Of especial importance in a situation like this- do you have freehold or leasehold interest in your house?

ponceprhea

The_Conductor wrote: »

Of especial importance in a situation like this- do you have freehold or leasehold interest in your house?

Freehold.

Each householder owns the land upto their front garden, and the rest of the land is shared between the 3. I don't know why we cannot legally be allowed to share the land without paying fees for a management company(which we own anyway). We were told that we had a start up a management company which is basically paying for nothing.

A few months back, one of the residents had a blockage to the waste water outside their house. The drain is situated on the shared part of the land. The council came out straight away to unblock it, even though it is private land and the council do not manage it. It is very confusing.

Lantus

ponceprhea wrote: »

Freehold.

Each householder owns the land upto their front garden, and the rest of the land is shared between the 3. I don't know why we cannot legally be allowed to share the land without paying fees for a management company(which we own anyway). We were told that we had a start up a management company which is basically paying for nothing.

A few months back, one of the residents had a blockage to the waste water outside their house. The drain is situated on the shared part of the land. The council came out straight away to unblock it, even though it is private land and the council do not manage it. It is very confusing.

You must clarify whether this company exists already. You cannot set up a company after property has been bought as the leases are already signed.

IF no company exits then the land belongs to the builder.
IF the company does exist then it still belongs to the builder until the transfer of common areas process is completed.

Either way it COULD be taken in charge by the local authority subject to planning conditions.

Check your lease or one of your neighbours. If it details a company you joined in when you signed the lease the OMC exists. If not then you cannot just set up a company now. Either you have explained it wrong or the builder is trying to pass on costs.

Who are the directors of the company? what is its cro number? investigate and get answers.

ponceprhea

Lantus wrote: »

You must clarify whether this company exists already. You cannot set up a company after property has been bought as the leases are already signed.

IF no company exits then the land belongs to the builder.
IF the company does exist then it still belongs to the builder until the transfer of common areas process is completed.

Either way it COULD be taken in charge by the local authority subject to planning conditions.

Check your lease or one of your neighbours. If it details a company you joined in when you signed the lease the OMC exists. If not then you cannot just set up a company now. Either you have explained it wrong or the builder is trying to pass on costs.

Who are the directors of the company? what is its cro number? investigate and get answers.

When we purchased the house we were under the impression that the builder still owned the shared land. Yet we received a letter from his solicitor stating that he was taking no more responsibility for the land until the council took it over and that we as house owners would need to setup a a management company and then file annual returns. This is what we did but we are paying accountant fees for basically nothing. We do not know when the transfer of common areas will be transferred to the council, if ever??
The 3 home owners are the directors of the company btw, as we were required to when starting the management company.
Not sure what to do?

Lantus

ponceprhea wrote: »

When we purchased the house we were under the impression that the builder still owned the shared land. Yet we received a letter from his solicitor stating that he was taking no more responsibility for the land until the council took it over and that we as house owners would need to setup a a management company and then file annual returns. This is what we did but we are paying accountant fees for basically nothing. We do not know when the transfer of common areas will be transferred to the council, if ever??
The 3 home owners are the directors of the company btw, as we were required to when starting the management company.
Not sure what to do?

If you purchased your houses and there was no management company in place then you don't have a management company now. You cannot set one up after the fact. What you have dome is set up ltd company to manage and pay for a piece of land you don't even own. There is no way you can enforce another member to pay their share as there is no lease tied into the house lease to ensure service fee's are paid. Do you have the title deeds for this land in your possession or the company's?

Sounds like you have been conned to some extent by the builder. The fact that he does not want to take responsibility is irrelevant. Either he is legally responsible or he is not. In this case he has somehow gotten the residents to look after his land for him and even set up a company. You should of taken legal advice BEFORE you did this.

it may well be the best solution but it sounds like nonsense. Unless the company forms part of the house lease what you have is just a regular ltd company. The company members DONT set up the company, its formed and in place a long time before the first house is sold.

ponceprhea

Lantus wrote: »

If you purchased your houses and there was no management company in place then you don't have a management company now. You cannot set one up after the fact. What you have dome is set up ltd company to manage and pay for a piece of land you don't even own. There is no way you can enforce another member to pay their share as there is no lease tied into the house lease to ensure service fee's are paid. Do you have the title deeds for this land in your possession or the company's?

Sounds like you have been conned to some extent by the builder. The fact that he does not want to take responsibility is irrelevant. Either he is legally responsible or he is not. In this case he has somehow gotten the residents to look after his land for him and even set up a company. You should of taken legal advice BEFORE you did this.

it may well be the best solution but it sounds like nonsense. Unless the company forms part of the house lease what you have is just a regular ltd company. The company members DONT set up the company, its formed and in place a long time before the first house is sold.

Sorry for the confusion but I have got the correct information from my partner . I have been incorrect, apologies for that.

In actual fact the management company was setup by the builder and it was with the builder before we signed for the property. A few years down the line, we received a letter from the builders solicitor stating that the builder had gone out of business/or ceased trading and the solicitor was going to let the company go as he was incurring costs. The options we were presented with were to take over the management company or lose the deeds to the communal land which includes the access road to our home. We were told that to get the deeds back we would have to go to the high court. Out of the 3, 2 residents became directors of the management company and we didn't.
So every year we pay a share of an accountant fee for a management company annual return that has no assets. The only asset is the deed, there is no function of the management company other than to hold the deeds.
We don't want to own the land, we just want to protect the access to our home, without incurring these extra charges.

The_Conductor

Would it be possible to transfer the deeds jointly to the 3 interested parties, taking the management company out of the equation- and dissolving the management company, doing away with the legal requirement for the annual accounts etc?

ponceprhea

The_Conductor wrote: »

Would it be possible to transfer the deeds jointly to the 3 interested parties, taking the management company out of the equation- and dissolving the management company, doing away with the legal requirement for the annual accounts etc?

Would that involve stamp duty and solicitor fees?

The_Conductor

ponceprhea wrote: »

Would that involve stamp duty and solicitor fees?

Probably- however, they'd be once off fees- as opposed to the ongoing annual costs of maintaining the management company as-is.

Lantus

The_Conductor wrote: »

Would it be possible to transfer the deeds jointly to the 3 interested parties, taking the management company out of the equation- and dissolving the management company, doing away with the legal requirement for the annual accounts etc?

There is till the unanswered question of whether the company forms part of the house lease. IF it does and based on recent posts it sounds like it does then attempting to dissolve the company would only succeed in harming the ability of anyone to sell their houses.

for 3 houses the cost is quite disproportionate as an auditor is 800-1200 regardless.

check your lease.

camphor

You should each but the fee simple for your own houses. You can then ignore the common area.

The_Conductor

Lantus wrote: »

There is till the unanswered question of whether the company forms part of the house lease. IF it does and based on recent posts it sounds like it does then attempting to dissolve the company would only succeed in harming the ability of anyone to sell their houses.

for 3 houses the cost is quite disproportionate as an auditor is 800-1200 regardless.

check your lease.

He says his house is freehold, not leasehold. What a mess.

Lantus

The_Conductor wrote: »

He says his house is freehold, not leasehold. What a mess.

OK, we are back to what I said earlier. There is no management company, just a ltd company they were conned into taking over for a patch of land. The company might own the land but they don't own the land as members, even as directors of the company.

If this is the case (and its not clear....) then they should be able to look at splitting the land between them and winding down the company.


awful situation.

Del2005

Lantus wrote: »

OK, we are back to what I said earlier. There is no management company, just a ltd company they were conned into taking over for a patch of land. The company might own the land but they don't own the land as members, even as directors of the company.

If this is the case (and its not clear....) then they should be able to look at splitting the land between them and winding down the company.


awful situation.

You and the other 2 home owners really need to sit down with a solicitor and get this sorted. All the advise being given is somewhat valid but you need a legal eye to go over all the documents and letters you've received about the shared land.

It's going to cost money whatever solution you come up with, so getting proper legal advice from a property law solicitor will hopefully save some money and possible other legal issues.

ponceprhea

Hi, I have had more thoughts about this. If as homeowners, we keep the situation as it is so we do the annual return by ourselves.

I checked online and it can be done for 20 euros electronically.
Because the management company does not have any income etc, should it be fairly simple to fill out?

The accountant currently charges more than 20 times that.

The_Conductor

ponceprhea wrote: »

Hi, I have had more thoughts about this. If as homeowners, we keep the situation as it is so we do the annual return by ourselves.

I checked online and it can be done for 20 euros electronically.
Because the management company does not have any income etc, should it be fairly simple to fill out?

The accountant currently charges more than 20 times that.

The accounts still need to be certified, by a registered accountant.
If the company isn't trading for a protracted period of time (I think 7 years- open to correction on this though) it would be struck off anyhow, too.......
Get proper advice.

ponceprhea

The_Conductor wrote: »

The accounts still need to be certified, by a registered accountant.
If the company isn't trading for a protracted period of time (I think 7 years- open to correction on this though) it would be struck off anyhow, too.......
Get proper advice.

A company not trading??, is that a company that is still filing annual returns but has no income.
So that can be struck off?

Henry Ford III

ponceprhea wrote: »

A company not trading??, is that a company that is still filing annual returns but has no income.
So that can be struck off?

Could be but doesn't the company have to have public liability insurance to cover communal areas for example, and income to cover that?

The_Conductor

I still think that the best bet is to apportion the ground in equal amounts to the 3 parties. Wind up the Management Company that they got conned into setting up- and going their separate ways with their three plots. Call them garden plots- or whatever. Are there planning regulations on keeping the common ground as a single unit, and accessible?

How did you not get independent advice on this when the builder decided to wash his hands of the situation?

Sigh.......

ponceprhea

The_Conductor wrote: »

I still think that the best bet is to apportion the ground in equal amounts to the 3 parties. Wind up the Management Company that they got conned into setting up- and going their separate ways with their three plots. Call them garden plots- or whatever. Are there planning regulations on keeping the common ground as a single unit, and accessible?

How did you not get independent advice on this when the builder decided to wash his hands of the situation?

Sigh.......

Not sure about the planning regulations as a single unit and accessible.

I have a photocopy of the plot I purchased from land registry and it only outlines upto the front garden. All the other houses have similar, but there would be approx. 100 feet of shared land including road access in front of houses. It is this land we have to sort but determining who takes which 1/3 may be difficult.
I am contacting a solicitor next week to see if the council should take over the shared land or we split it between us.
If we split it between us, then it would be difficult to determine who claims which part of the land. It worries me as the road access could become difficult to maintain in the future as it is cobblelock and already has parts that have sunk slightly.
It may be best for all if council took it over.

The_Conductor

You need professional advice.
You and your neighbours were conned into where you're currently at- you don't need to make an awkward situation even worse.

Carawaystick

if you're worried about the cost of getting audited accounts in the future.
Take a copy of your previous simple accounts and get quotes from chartered accountants who are hard up or will undercut the existing price.

If you're worried about the actual land get legal advice.
Ask about getting a right of way declared, so you have clear access
If you and your 2 neighbours are the only members of the company who owns the land see about selling the land from the property co. to the 3 of ye

see if squatting will achieve the same result if you think all 3 of ye will be there for the long haul.

if you can establish a right of way across the common land and otherwise devalue the land, you might reduce any stamp duty from transferring the land to you(&your neigghbours)