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does debt stay with property?

  • 13-09-2013 2:57pm
    #1
    kasakins
    Registered Users, Registered Users 2 Posts: 3 ✭


    Hi,

    Can someone help, we have an 'investment' property which we purchased mid 07'. our management company have rang today saying we owe €2500 on the property from fees outstanding 04/05 05/06. They say the debt stays with the property.


Comments

  • #2
    hullaballoo
    Administrators, Entertainment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 18,773 Admin ✭✭✭✭✭hullaballoo


    It sounds like they're trying it on. The debt is a contract debt and you were not a party to the contract on foot of which the debt arises. Get in touch with your solicitor and get them to send a letter because frankly, that's ridiculous.


  • #3
    DellyBelly
    Registered Users, Registered Users 2 Posts: 3,222 ✭✭✭DellyBelly


    As far as I know the debt does stay with the property. Your solicitor should have made sure all debts on the property should have been paid off before you bought.

    I'm nearly sure that's the case but I would get legal advice if I was you


  • #4
    Marcusm
    Registered Users, Registered Users 2 Posts: 10,628 ✭✭✭✭Marcusm


    hullaballoo wrote: »
    It sounds like they're trying it on. The debt is a contract debt and you were not a party to the contract on foot of which the debt arises. Get in touch with your solicitor and get them to send a letter because frankly, that's ridiculous.

    Non payment of the management charges, in extremis, can lead to an action for forfeiture of the lease and discharge of the management charges as a priority amount of the re grant proceeds. That's why clarity on management charges is an important part of the searches on conveyancing.

    OP: did your solicitor not obtain a statement from the management company prior to acquisition. If not, I suggest you consider a negligence claim. If the vendor's solicitor undertook to discharge them out of the sale proceeds, different issues would arise.


  • #5
    dermot_sheehan
    Closed Accounts Posts: 2,062 ✭✭✭dermot_sheehan


    hullaballoo wrote: »
    It sounds like they're trying it on. The debt is a contract debt and you were not a party to the contract on foot of which the debt arises. Get in touch with your solicitor and get them to send a letter because frankly, that's ridiculous.

    If it's an apartment, and you take an assignment of a lease, you are liable for the previous management charges.

    As a practical matter, since the management company is considered the landlord in such an arrangement, they can forfeit the lease and take possession of the property if arrears of service charges are not paid.


  • #6
    hullaballoo
    Administrators, Entertainment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 18,773 Admin ✭✭✭✭✭hullaballoo


    dermot_sheehan wrote: »
    If it's an apartment, and you take an assignment of a lease, you are liable for the previous management charges.

    As a practical matter, since the management company is considered the landlord in such an arrangement, they can forfeit the lease and take possession of the property if arrears of service charges are not paid.
    My reading of the 2011 Act suggests otherwise. For that reason, the OP should seek legal advice in relation to this matter.


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  • #7
    dermot_sheehan
    Closed Accounts Posts: 2,062 ✭✭✭dermot_sheehan


    Which section of the Multi Unit Development Act 2011 prohibits forfeiture of a lease where there is a forfeiture clause?

    I know there's a section that allows service charges to be recovered as a simple contract debt.

    There are sections of the Ground Rents legislation prohibiting forfeiture and re-entry of a lease where it is a "ground rent", but there is I understand no comparable provision for a long lease that apartments are held under.

    Absent such an express prohibition, there is nothing stopping a landlord from enforcing a contractual right to payment of service charges by forfeiting a lease, even if the debts were incurred by the predecessor in title to the current occupant.


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