MUD Act. Sale close to falling through

KissKissBang

I'm in the final final stages of an apartment purchase. Contracts need to be returned tomorrow.

I'm worried that I'm not being made aware of large capital fund expenditure in the pipeline but I'm wondering if my back is actually covered by the replies to the MUD act which I've been sent? These outline an upgrade to the fire alarm system and mention some minor works left over from the last construction project and say there is no major works planned in the short-term.

A bit of background. From looking over the financial reports of the OMC I saw there were some large scale projects undertaken over the last few years to carry out essential works. Although these are either complete or near complete and appear to have been fully paid for I am somewhat worried that after I complete the purchase I'd be made aware that further works are required and need to be levied on all the owners. I've sought assurances from the management company and they have responded to my questions but their replies have been sent via the seller, through the estage-agent and onto me. I've tried to get these replies sent to the sellers solicitor but they won't confirm they are in receipt of the same emails. And it now looks like the sale of the property is about to fall through relating to this.

Thanks for any help. Hoping to put an end to the stress soon enough!

4ensic15

Surely your surveyor checked the state of the building and reported on the likelihood of works needed in the near future?

KissKissBang

Surveyor has fairly limited access and wouldn't be able to spot certain works needing to be carried out. For example some works done recently were to ensure adequate levels of fireproofing on the steel beams supporting the buildings.

Surveyor made several notes recommending that my solicitor asked about scheduled works but my solicitor didn't ask directly about this. This prompted me to ask the management company itself. But response I saw from management company went through the wrong channels.

If I'm covered by the responses in the MUD act I'd be happy. And by covered, I mean that, there are no large scale projects required/planned/out for tender that I don't know about.

Doop

To look at it another way, what would the management company have to gain from providing misleading information?

They probably cant reply directly to you as they have no legal relationship with you.

pinkypinky

Are you looking to be indemnified against projects if they don't disclose them? There'd be no reason for them to hide something.

What if they discover something needs to be done after you buy? You'll still be bound to pay if levied.

Cyrus

its an apartment complex, works will be required, if i was you id check how the service charge has been over the years, if it has stayed relatively stable or increased a lot and also if there is a reasonable sinking fund. you will have the same potential issue with any apartment complex

KissKissBang

Doop wrote: »

To look at it another way, what would the management company have to gain from providing misleading information?

They probably cant reply directly to you as they have no legal relationship with you.

I agree with you there, management company have nothing to gain. But I didn't receive the reply directly from the management company. The emailed response was sent to the seller to the agent and onto me so legally not worth anything

KissKissBang

pinkypinky wrote: »

Are you looking to be indemnified against projects if they don't disclose them? There'd be no reason for them to hide something.

What if they discover something needs to be done after you buy? You'll still be bound to pay if levied.

If I purchase the property and someone comes after to inspect X and reveals there are works required then I'm fine with that. It's an apartment complex. Things are going to come up. My worry, given that they have discovered one fairly substantial problem which led to discovery of another (both of which are now finished and paid for) is that there are more known problems which haven't been revealed to me. Maybe the work is out for tender or finance is being raised or it's just scheduled down the line but is non-urgent for the moment etc.

I wanted to verify that wasn't the case by directly asking the management company but haven't been able to. But, one of the replies to the MUD act detailed some upcoming works in the pipeline. What I'm trying to figure out here on the forum is whether what was set out in those replies has to be the full revelation of any works currently known to be needed.

KissKissBang

Cyrus wrote: »

its an apartment complex, works will be required, if i was you id check how the service charge has been over the years, if it has stayed relatively stable or increased a lot and also if there is a reasonable sinking fund. you will have the same potential issue with any apartment complex

I agree with you that work will come up that has to be paid for. Happy with that. I'm suspicious that there is work yet to begin but known to be required. And the reason I'm suspicious is that the sellers solicitor won't confirm they are in receipt of the same replies from the management company that were forwarded to me via seller and agent.

Service charge had to be raised for 3 years in row to cover the works I've mentioned here. Worked out roughly to be an extra €2000 per unit. Service charge has returned down to normal level the past 2 financial years. Sinking fund stands at about €150K of which €50k is in the sinking fund account and the rest is coming from the day to day account while they chase people who haven't paid their service charge during the recession.

Lantus

Bikeboo wrote:

Another thing to consider is if you attended these events, she could argue that if you were well enough to attend then you could have been at work and feigning the illness you have.

[/quote]

KissKissBang wrote:

I'm worried that I'm not being made aware of large capital fund expenditure in the pipeline but I'm wondering if my back is actually covered by the replies to the MUD act which I've been sent? These outline an upgrade to the fire alarm system and mention some minor works left over from the last construction project and say there is no major works planned in the short-term.

The transfer of info via the seller is normal. You have undertaken good due diligence re accounts and questions.

There can be no absolute guarantee about further works. Apartments have a huge range of expensive items that will need planned corrective replacement including lifts, doors, alarms, gates, roofs, cladding, lighting etc...

Does the sinking fund look well serviced? Should be a separate account for long term expenditure.