Buying Apartment with No Management Company

JimmyMW

Hi All,

Quick question for those in the know, what are the implications of buying an apartment with no management company in place?

Samuel T. Cogley

No OMC? It would have to be a cash purchase, generally. Does depend on additional factors though.

JimmyMW

Samuel T. Cogley wrote: »

No OMC? It would have to be a cash purchase, generally. Does depend on additional factors though.

I was thinking that would be the case alright, essentially making it a difficult asset to sell on in the future as you would be dealing with a cash only market.

I also assume building maintenance etc would be an issue, ie if roof leaked etc, who will pay for repair or who could even do the repair should an issue arise.

Any other issues that people would foresee as problems directly relating to not having a management company in place?

JimmyMW

JimmyMW wrote: »

I was thinking that would be the case alright, essentially making it a difficult asset to sell on in the future as you would be dealing with a cash only market.

I also assume building maintenance etc would be an issue, ie if roof leaked etc, who will pay for repair or who could even do the repair should an issue arise.

Any other issues that people would foresee as problems directly relating to not having a management company in place?

Not just roof, but any and all common areas have to be paid for. Who's going to repair broken lights, gates, doors, intercoms, lifts, letterboxes, cut the grass, pay for the bins, sort out insurance, operate CCTV etc?

I have no idea how an apartment complex could function without some sort of OMC in place. Even a very small one.

Samuel T. Cogley

Deleted User wrote: »

Not just roof, but any and all common areas have to be paid for. Who's going to repair broken lights, gates, doors, intercoms, lifts, letterboxes, cut the grass, pay for the bins, sort out insurance, operate CCTV etc?

I have no idea how an apartment complex could function without some sort of OMC in place. Even a very small one.

In Scotland you just look after your immediate landing area. It can work but with varying degrees of success.

happyfriday74

I expect OP is buying into a development where they is a management company(OMC) but....


1.There is no managing agent appointed on behalf of the omc and the directors run it themselves.

2. The OMC is struck off.

Michael D Not Higgins

Samuel T. Cogley wrote: »

In Scotland you just look after your immediate landing area. It can work but with varying degrees of success.

Haven't heard of a scheme like that in Scotland. For new builds it's usually enforced that there is a property factor (like a management agent) who organises collection of factor fees and sorts outs common areas. For older buildings, the title deeds set out maintenance of common areas and you can either factor the building yourself as a group or hire a property factor.

Samuel T. Cogley

Samuel T. Cogley wrote: »

In Scotland you just look after your immediate landing area. It can work but with varying degrees of success.

So how do you pay the bill for the lighting in just your landing area? How are your bins paid for? Do you just paint the walls in the corridor up to a certain point, then leave old Mrs O'Reilly's walls all manky because she's a lazy get?

happyfriday74 wrote: »

I expect OP is buying into a development where they is a management company(OMC) but....


1.There is no managing agent appointed on behalf of the omc and the directors run it themselves.

2. The OMC is struck off.

Both serious red flags, IMO. Point 2 is self explanatory. Point 1 means that there are people who are doing all that work 'voluntarily' and on their own time. I'd be super sceptical of anyone in that position.

happyfriday74

Agree.

Owner run OMC's without an agent normally ends in tear unless a number of owners are very very willing to give up a lot of time carry out the duties. When one of the involved owners sells you need someone else to step in.

A stuck off OMC means the owners will also have to pony up to pay the fines and get the OMC back in place. The only sales will be to cash buyers who will try and often succeed to buy the apartment for below market value.

As for looking after your own immediate landing good luck. A lot of apartment owners in Ireland font care about what goes on beyond their door and there sti9ll insurance , power and other services to be paid for.

Samuel T. Cogley

Property Factor must have been in place as we paid £30 a year and the grass got cut. Painting etc. we paid as a group. Insurance was done individually. Bins I honestly can't remember I think we had our own bins or it was done through the council tax. Cleaning and bulbs etc. as per above post. It was a well maintained block, unlike where I lived in Perth which was an ancient building.

Michael D Not Higgins

Samuel T. Cogley wrote: »

Property Factor must have been in place as we paid £30 a year and the grass got cut. Painting etc. we paid as a group. Insurance was done individually. Bins I honestly can't remember I think we had our own bins or it was done through the council tax. Cleaning and bulbs etc. as per above post. It was a well maintained block, unlike where I lived in Perth which was an ancient building.

Bins are through council tax. You have the choice to have block insurance or individual common insurance (not ideal as you have to rely on everyone else being properly up to date and insured). Sounds like you were in a self-run block with someone just collecting a small amount on the side to do the grass.

Those sound fine til I think about the thread I saw on Reddit where they was an issue with the roof and they had trouble chasing everyone for payment as it was several thousand each (no sinking fund since they were self managing).

Samuel T. Cogley

Michael D Not Higgins wrote: »

Bins are through council tax. You have the choice to have block insurance or individual common insurance (not ideal as you have to rely on everyone else being properly up to date and insured). Sounds like you were in a self-run block with someone just collecting a small amount on the side to do the grass.

Those sound fine til I think about the thread I saw on Reddit where they was an issue with the roof and they had trouble chasing everyone for payment as it was several thousand each (no sinking fund since they were self managing).

I lived in half a dozen apartments (didn't own all of them in fairness) and never heard of an OMC until moving to Ireland. In fairness I was aware of the horror stories about large repairs right enough.

Juwwi

JimmyMW wrote: »

Hi All,

Quick question for those in the know, what are the implications of buying an apartment with no management company in place?

The building insurance would be a big concern,does it have any do you know .

Hack12

If there is no management company you cannot secure a mortgage on the property. Also leads to a lot of complications for maintenance, sink fund, bins, building insurance etc. Avoid

seagull

Run away from it. Very, very fast.