Developer of unfinished estate ask residents to take ownership of common areas

Macaonbhuit

Just got a solicitors letter suggesting that the residents of our housing estate form a company and take actual ownership of the common areas from their clients, the developers.
We are also at the start if the planning enforcement process with the co co to get these guys to complete roads and other site works. They refused to engage with us for the last 6 year's, and now this
Anyone ever had an approach like this? It's a trap imo. Any insight appreciated

makeorbrake

Is it not a case that transfer of undertakings needs to transfer to the Council? of course, before the council will take an estate in charge, they will insist on everything being in order...eg. full compliance with planning, etc. If this isn't happening, then ultimately, the bond will be accessed...assuming there is a bond??

Macaonbhuit

makeorbrake wrote: »

Is it not a case that transfer of undertakings needs to transfer to the Council? of course, before the council will take an estate in charge, they will insist on everything being in order...eg. full compliance with planning, etc. If this isn't happening, then ultimately, the bond will be accessed...assuming there is a bond??

unbelievably.... No Bond

seamus

Whoa whoa whoa, tread very carefully.

We had exactly the same approach from our developers. As frustrating as it is that all site works aren't being completed and you have to fight for this, basically what the developer is trying to do is shed his responsibility (and therefore any cost) for these works onto the owners' management company.

As makeorbrake says, what will happen when you try to hand over control of the common areas to the Co. Co., they will inspect the areas and insist that everything has been completed properly, up to standard and in a fit state to be handed over.

And who will have to pay for all those works? You, the residents. We're basically still fighting with both SDCC and NAMA over this - our developer has gone bust and left about €100k worth of works to be carried out. There's a €120k bond lodged with SDCC, but the original developers are arguing that the cost for these works should be borne by the management company and trying to tell SDCC not to get involved (and of course, to hand back their €120k).

If you don't have one already, form an owner's management company and hire your own legal representation. You can by all means take ownership of these areas, but then you will all individually have to stump up an equal share of the cost of completing the site works. You might feel that's the lesser of two evils, for the sake of having a nice area, but don't do anything without appropriate legal advice and without getting all of the residents on board.

godtabh

I am dealing with the same situation in Kildare.

I'm not hands on as I was but the gist at the time was that Kildare had to carry out the works and claim against the builders bond which was an insurance bond. Kildare didnt (dont want to) have the resources to do anything but it appears things are moving along now.

If Kildare/we did the works we would pull down the full amount. We are about to do a deal with the insurance company that will finish the estate to the required standard but at a cost less than the full price of the bond. Its taken nearly 3 years to get to this point.

makeorbrake

Macaonbhuit wrote: »

unbelievably.... No Bond

That's on your Local Authority then - completely negligent behaviour on their part not to take a bond - but by all accounts, pretty commonplace during the Tiger era.

You need to get together as a community and pressurise the Council to act - and sort this out. A lot of this is of their making.

Lantus

On the basis that you have been 'asked' to form a company which will be the legal instrument to hold title then we must assume that there is no Owners Management Company (OMC) in existence. (Please confirm if this is correct) Presumably there is just houses and no apartments? How much green area are we talking about?

Any company created will just be a normal company. There is no way to legally bind every unit owner into it. It is just a holding mechanism for the legal title as no one person has a right to hold it. Presumable the company becomes responsible for the lands like an OMC. Unlike an OMC though no one is liable or contractually obliged to pay for either the running of the company or the lands.

No one can make you do this and even if you did create this company it would have no legal power to do anything except cost the initial directors a lot of money (A ltd company that doesn't even trade can cost 1k a year just to audit and submit accounts.)

Time to start knocking on the door of every councillor and TD and writing letters and contacting the press and ringing your local authority and writing them letters. Sadly it is not unbelievable there is no bond as this is much more common place as coco's did all sorts of untraceable secret deals with developers during the boom years. Turning a blind eye to bonds is the tip of the ice berg.

Don't agree to anything unless you have full legal advice as to the full implications. The council will need to take these areas in charge. If the council want to set up a company to take title of the lands then let them if they think it is such a good idea.

Better to let the land revert to the state unless its worth something or is critically important.

Macaonbhuit

Lantus wrote: »

On the basis that you have been 'asked' to form a company which will be the legal instrument to hold title then we must assume that there is no Owners Management Company (OMC) in existence. (Please confirm if this is correct) Presumably there is just houses and no apartments? How much green area are we talking about?

No omc. All houses. About an acre and residents have been maintaining it for a few years now(which we accept as the norm). We have pursued all politicians for years, and received nothing but lip service. After a couple of years of badgering the planning office, they have agreed (and been instructed by a unanimously voting residents association) to start planning enforcement proceedings to have the estate completed by the developer. This solicitors letter arrived not long after the council planning office confirmed they were proceeding with enforcement, so I assume it is in some way (maybe) related.

Paulw

Ignore the solicitor's letter. Forward it on to the council and let them deal with the issue.

If you have no OMC in place, then you would be foolish to go and set up one. Let the council do what they should do. Hassle and chase all your local councillors.

Lantus

you cannot set up an OMC at this stage. It is a legal document and contract you sign as you purchase your property which binds every unit owner together and the company must exist before the first sale goes through.

get the council to insure it and unless your coco cuts grass keep going with keeping it trim. Ignore the developer chancing his arm and never engage or talk to a solicitor without taking legal advice and getting your solicitor to do it. In this case just ignore it, pass on the letter to the council and forget about it.

No one can make you do this.

braddun

in order that the roads & commons areas in the estate are taken in charge, there must be a resolution passed by the local County Council doing this. Accordingly, what you should do at this stage is get in contact with your local county councillor seeking to have a resolution set down at the next meeting of the Council which, if passed, will mean that the common areas are taken in charge. At the moment, just because the land is vested in the state solicitor does not mean that they areas are automatically taken in charge. A resolution of the County Council must be passed for this to happen.

Finally, you should also consider the option of buying the common areas off the State Solicitor if a group of residents were interested in gaining ownership. The State solicitor would be amenable to a sale if this assisted in getting the estate finished, as it would clear the way for another builder to come in and finish the work. Otherwise, you need to get the County Council to come in and finish off the common areas so that the estate functions properly.

solution to the impasse is to get the local County Council to sue the bank upon the bond which every builder has to provide before commencing work on an estate. This bond is lodged with the Council as it is a condition of commencement of work on every estate. It effectively guarantees completion where a builder becomes insolvent, as has happened here. The Council is in possession of this bond and it can execute on it to provide the money to complete the common areas in your estate.

So once again you need to use your local TDs & County Councillors to put pressure on the Council to exercise this right. However, be aware that when a builder such as this goes bankrupt, the State Solicitor has never, ever stepped in and completed the estate. So you should look elsewhere for a remedy.

Victor

What is the current status of the developer? If solvent, it needs to finish the estate in accordance with the contracts that they and the buyers signed (contract may be deliberately fuzzy).

Otherwise, examine the option of a resident's plebiscite to get the council to take over the estate.

You need to get legal advise, preferably from a more commercially astute solicitor.

braddun wrote: »

Finally, you should also consider the option of buying the common areas off the State Solicitor

Is there any evidence that the State Solicitor is involved?

braddun wrote: »

solution to the impasse is to get the local County Council to sue the bank upon the bond which every builder has to provide before commencing work on an estate.

Did you read the thread? There is no bond.

braddun wrote: »

It effectively guarantees completion where a builder becomes insolvent, as has happened here.

Is there any evidence that the builder is insolvent?

Macaonbhuit

Victor wrote: »

What is the current status of the developer? If solvent, it needs to finish the estate in accordance with the contracts that they and the buyers signed (contract may be deliberately fuzzy).

Otherwise, examine the option of a resident's plebiscite to get the council to take over the estate.

You need to get legal advise, preferably from a more commercially astute solicitor.

Is there any evidence that the State Solicitor is involved?

Did you read the thread? There is no bond.

Is there any evidence that the builder is insolvent?

Still solvent as fracas we are aware.. Really we need to see where the coco get with enforcing planning. We'll look at the plelicited and legal action as a follow on course if action. I am hoping that this solicitors letter we received may be a reaction to the start of enforcement proceedings. I'm which case, we have a reaction for the first time in years