MUD act

adaczo · 07-07-2014 9:45pm #1

We are in a proces of buying a house and waiting on mud's act and requisition number 37 for second hand property.Can anyone please explain what are they and is the management company solicitor who has them?thank you

athtrasna · 07-07-2014 9:55pm

It's something your solicitor requests from the management company via their management agent. It's basically info on the management company and in particular the unit you are buying. Key to this is that how the unit stands in relation to fee payments to the management company. If there are fees outstanding...you'll hit a speedbump. It's standard practice for management companies not to release paperwork with fees outstanding unless there's a legal agreement that fees will be paid from the proceeds of the sale.

adaczo · 07-07-2014 10:00pm

Thank you for your reply!As far as i know the management company is still existing but nobody from the estate is paying anything;there is no money in the management company;the neibours are paying 50e per house per year to someone to cut the grass

athtrasna · 07-07-2014 10:30pm

adaczo wrote: »

Thank you for your reply!As far as i know the management company is still existing but nobody from the estate is paying anything;there is no money in the management company;the neibours are paying 50e per house per year to someone to cut the grass

Has the estate been taken in charge by the council? If not, run away. Any solicitor worth their salt won't let you progress such a purchase.

adaczo · 07-07-2014 11:12pm

No the estate hasn't been taken incharge by the town council yet,but i am just wondering can mud's act and req.37 be issued at all?

athtrasna · 07-07-2014 11:20pm

adaczo wrote: »

No the estate hasn't been taken incharge by the town council yet,but i am just wondering can mud's act and req.37 be issued at all?

The act is a piece of law, already exists. Requisition 37 is required by that law. Unlikely to be issued in these circumstances and I would run, not walk, away from this purchase

adaczo · 08-07-2014 12:50am

Thank you for your reply i am still hoping
we'll be able to get req.37 as we love the house:-)

athtrasna · 08-07-2014 7:09am

adaczo wrote: »

Thank you for your reply i am still hoping
we'll be able to get req.37 as we love the house:-)

You need to detach yourself emotionally from the house. A non functioning management company is a nightmare and nobody in their right mind should consider buying in such a development.

jd · 08-07-2014 7:33am

adaczo wrote: »

,but i am just wondering can ..req.37 be issued at all?

It's certainly unlikely to be issued if the vendor owes service charges.

Del2005 · 08-07-2014 9:30am

athtrasna wrote: »

You need to detach yourself emotionally from the house. A non functioning management company is a nightmare and nobody in their right mind should consider buying in such a development.

Can you even buy from a non functioning MC? How will the paper work be processed if no company exists to transfer the lease?

L1011 · 08-07-2014 10:07am

Del2005 wrote: »

Can you even buy from a non functioning MC? How will the paper work be processed if no company exists to transfer the lease?

Realistically no. No mortgage lender is going to touch it with a bargepole.

adaczo · 08-07-2014 11:26am

When i checked online the management company status is 'normal' and the accounds seem to be up to date;but nobody is paying any money.if we knew about the situation we would never put an offer on this house!!!!the town council might be taking over in 2years..

L1011 · 08-07-2014 11:51am

adaczo wrote: »

When i checked online the management company status is 'normal' and the accounds seem to be up to date;but nobody is paying any money.if we knew about the situation we would never put an offer on this house!!!!the town council might be taking over in 2years..

Town councils don't exist anymore as of last month so even if they were planning on taking it in to charge, those plans are likely gone asunder.

Time to request the booking deposit back and write it off I suspect.

Pawwed Rig · 08-07-2014 3:13pm

First rule in house hunting is don't fall in love with a house.

blacklilly · 08-07-2014 10:22pm

athtrasna wrote: »

The act is a piece of law, already exists. Requisition 37 is required by that law. Unlikely to be issued in these circumstances and I would run, not walk, away from this purchase

Not to be pedantic but replies to requisition are not required by law, it is considered best practice for a solicitor to obtain them but it is not a legal requirement.

athtrasna · 08-07-2014 10:33pm

blacklilly wrote: »

Not to be pedantic but replies to requisition are not required by law, it is considered best practice for a solicitor to obtain them but it is not a legal requirement.

If we're being pedantic it's now officially "Multi-Unit Developments Act 2011 Precedent Pre-Contract Enquiries" rather than Req 37 :P Yes it's advised by law but compulsory for mortgage purposes and really valuable to a buyer. Failure to have these enquiries completed could prove costly to the purchaser in both long and short terms.

blacklilly · 08-07-2014 10:41pm

athtrasna wrote: »

If we're being pedantic it's now officially "Multi-Unit Developments Act 2011 Precedent Pre-Contract Enquiries" rather than Req 37 :P Yes it's advised by law but compulsory for mortgage purposes and really valuable to a buyer. Failure to have these enquiries completed could prove costly to the purchaser in both long and short terms.

Ok let's not argue:)
There's a lot of conflicting opinions on who is responsible for the debt in respect of service charges when a property is sold. There isn't much case law on this so hopefully over the next few years there'll be more solid advice available.
I absolutely agree though, under no circumstances would I purchase a property without seeing the replies.

athtrasna · 08-07-2014 10:58pm

blacklilly wrote: »

Ok let's not argue:)
There's a lot of conflicting opinions on who is responsible for the debt in respect of service charges when a property is sold. There isn't much case law on this so hopefully over the next few years there'll be more solid advice available.
I absolutely agree though, under no circumstances would I purchase a property without seeing the replies.

Our MC/MA will not let a sale go through without a guarantee that outstanding fees will be discharged. At the moment a sale is being held up because it's a repossession and the bank is trying to negotiate the outstanding amount down. The unit is our single biggest debtor so there is no way that the amount will be reduced. I fully support the position of the company. The bank want their money back faster than we need the fees. Meanwhile the buyer is stuck in limbo. Clearly they didn't complete all the enquiries they should have!

blacklilly · 08-07-2014 11:04pm

Any MA worth their salt will not provide replies unless the solicitors provide an undertaking to discharge all outstanding amounts, however I am aware of a number of instances where no replies were requested and that's where it can get difficult for the MC/MA

Mrs OBumble · 09-07-2014 9:05am

blacklilly wrote: »

Any MA worth their salt will not provide replies unless the solicitors provide an undertaking to discharge all outstanding amount,

I would have thought that they'd be waiting for the cold hard cash (ie cheques to have cleared).

blacklilly · 09-07-2014 9:15am

Mrs OBumble wrote: »

I would have thought that they'd be waiting for the cold hard cash (ie cheques to have cleared).

Not in every instance. If an undertaking from a solicitor is not followed through upon, that solicitor can be reported to the law society for breach of undertaking, in turn a court of law can order the solicitor to follow thorugh upon said undertaking

Paulw · 09-07-2014 9:26am

athtrasna wrote: »

Our MC/MA will not let a sale go through without a guarantee that outstanding fees will be discharged.

In our development we won't allow the sale to go through unless all fees are paid in full.

A solicitor's undertaking just doesn't pay the bills.

blacklilly · 09-07-2014 10:00am

Paulw wrote: »

In our development we won't allow the sale to go through unless all fees are paid in full.

A solicitor's undertaking just doesn't pay the bills.

I have not yet come accross a case whereby a solicitor did not follow through on their undertaking.
Also, you will find in alot of cases the outstanding service charges are discharged from the proceeds for sale.

Paulw · 09-07-2014 10:04am

blacklilly wrote: »

I have not yet come accross a case whereby a solicitor did not follow through on their undertaking.
Also, you will find in alot of cases the outstanding service charges are discharged from the proceeds for sale.

I am well aware of that, but it was a decision our board of directors took.

Marcusm · 09-07-2014 10:09am

blacklilly wrote: »

Not in every instance. If an undertaking from a solicitor is not followed through upon, that solicitor can be reported to the law society for breach of undertaking, in turn a court of law can order the solicitor to follow thorugh upon said undertaking

Not every MC inquiry will result in a sale; if the vendor is seriously behind on service charges, it may be worthwhile insisting that they be settled in advance of dealing with the inquiries rather than waiting for the sales proceeds to be applied. Not always easy to insist upon and in many circumstances the funds may not be available to settle them.

blacklilly · 09-07-2014 10:15am

Marcusm wrote: »

Not every MC inquiry will result in a sale; if the vendor is seriously behind on service charges, it may be worthwhile insisting that they be settled in advance of dealing with the inquiries rather than waiting for the sales proceeds to be applied. Not always easy to insist upon and in many circumstances the funds may not be available to settle them.

Yes, I think it's important to look at it on a case by case basis. If you have a long term debtor who has caused undue hassel and expense (legal fees) then I would be very hesitant to provide replies unless payment was forthcoming.

Lantus · 09-07-2014 10:59pm

different units have different levels of enforceability and leverage. Common building units such as apartments and commercial units have block insurance elements which are typically essential for mortgage compliance. i.e. a lender wont even consider releasing a mortgage until they see the certificate with the purchasers and their interest noted. An OMC can withhold this document until fees are dealt with.

However, houses don't require block insurance and so the leverage is less. Its the mud act pre contract form as the main basis. I don't believe that an OMC can 'stop' a sale in such a circumstance unless anyone can advise otherwise.

MONEYSUMS · 30-09-2014 12:43pm

Hi - where does one get a copy of "Multi-Unit Developments Act 2011 Precedent Pre-Contract Enquiries" ?

Can I access one on the Internet ? I have looked but to no avail so far...

Woodville56 · 30-09-2014 1:01pm

Try irishstatutebook.ie

MONEYSUMS · 30-09-2014 1:30pm

Thank you woodville. In the meantime I eventually found one on the website of the Irish Law Society.

Lantus · 30-09-2014 2:03pm

even IF you can buy the property a non functioning OMC could be struck off if the accounts are not filed or it is not being run properly. When that happens you will have an unsellable house unless it is re-instated and all fees and fines paid. Depending on how long that strike off period is it could be a few thousand to tens of thousands.

A home that cannot be sold has a value of nothing. This is why banks wont release a mortgage for a non functioning company.

If you are prepared to never sell the house and your children will never be able to sell it then go ahead and buy it. After all, you love it. (whatever that is?)

Woodville56 · 03-10-2014 5:20pm

G

Lantus wrote: »

even IF you can buy the property a non functioning OMC could be struck off if the accounts are not filed or it is not being run properly. When that happens you will have an unsellable house unless it is re-instated and all fees and fines paid. Depending on how long that strike off period is it could be a few thousand to tens of thousands.

A home that cannot be sold has a value of nothing. This is why banks wont release a mortgage for a non functioning company.

If you are prepared to never sell the house and your children will never be able to sell it then go ahead and buy it. After all, you love it. (whatever that is?)

This type scenario must also create problems for existing residents of such an estate if they wish to move / sell their property - if a prospective purchaser cannot secure a mortgage due to a defective or defunct Estate Management Company ?? Surely it would be in the interests of residents and prospective residents of such estates to rehabilitate a non functioning MC or, in the absence of such, to convene a new MC ?

Lantus · 03-10-2014 10:15pm

Hit the nail on the head Woodville but most people bought in haste during the boom and didn't even realise they were becoming members of a company or that there would be a recurring bill every year. As a result there is a huge swell of resentment and even hatred towards the idea of a management company which is often viewed as an evil money grabber to be refused and rejected at all costs. People don't believe that they wont be able to sell their properties if the company is struck off or that there will be any consequences at all.

There is a ticking time bomb with a lot of OMCs in that they are already on a knife edge with the percentage of non payers increasing which will at some point tip the scales and the system will collapse in on itself.

Woodville56 · 03-10-2014 10:43pm

Lantus wrote: »

Hit the nail on the head Woodville but most people bought in haste during the boom and didn't even realise they were becoming members of a company or that there would be a recurring bill every year. As a result there is a huge swell of resentment and even hatred towards the idea of a management company which is often viewed as an evil money grabber to be refused and rejected at all costs. People don't believe that they wont be able to sell their properties if the company is struck off or that there will be any consequences at all.

There is a ticking time bomb with a lot of OMCs in that they are already on a knife edge with the percentage of non payers increasing which will at some point tip the scales and the system will collapse in on itself.

Indeed Lantus ! I'm aware of such a scenario as you describe although thankfully not involved in it ! I have a relative though who is considering buying in an estate where a small number of houses are unfinished which. together with the common areas, are now within the control of a receiver. Does the receiver in this instance inherit the responsibilities of the developer vis a vis establishment / revival of an Estate Management Co, or is it left to the residents to agitate for this through the receiver ?
The receiver has indicated that he has made representations to the local authority to have the estate taken in charge but my relative hears that this will be a mid - long term aspiration.

MUD act

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