# Apartment gone sale agreed owing fees



## gebbel (30 Oct 2014)

I'm the director of a management company where one of the units has just been sold. The owner has refused to engage with us over the last 4 years regarding his arrears. The outstanding amount is €2450. I understand that this sale shouldn't conclude without his debt being discharged, but what do I need to do now to ensure this happens? I don't want this guy to somehow slip through a net and walk away. Many thanks.


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## Padraigb (30 Oct 2014)

That sort of issue is usually dealt with by the solicitors handling the conveyance. The purchaser's solicitor will usually require proof that the fees have been paid: the new owner will not want to become liable for the arrears.


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## gebbel (30 Oct 2014)

You would think so, but I read a thread somewhere that this due process did not materialise. The management company was left the debt after the sale went through. I just want to cover all angles.


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## Butter (30 Oct 2014)

Contact the estate agent selling the house immediately & ask them to make the buyer & their solicitor aware that there is a management company attached to the development. Don't mention arrears at this point as it could be a matter of data protection. 

We have cleared the arrears of several houses at the point of sale but I don't think it's impossible for people to slip through the net.


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## mf1 (30 Oct 2014)

Check the Lease. 

In general, (there are some real rubbish exceptions) the Apartment Lease binds the Lessee ( i.e. the owner) to pay the Management Charge. If the apartment is sold, the debt passes to the new owner. 

It would be most unusual for a vendor's solicitor not to apply to the Management   Company for answers to the pre-contract requisitions and a receipt for all outstanding service charges. It would be even more unusual for a purchaser's solicitor not to seek a receipt for same.  

mf


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## lantus (30 Oct 2014)

You should of received a pre contract MUD act requisition and also provided a full invoice to the solicitor acting for the seller. At this point the solicitor usually gives an undertaking to discharge all outstanding fee's. (Just out of interest what do you charge to undertake this?)

Before the sale the lender will almost certainly require the insurance certificate before the sale will complete assuming this is an apartment. If you feel as if fees are not forthcoming then you could hold back this cert although I've never found it necessary as long as the solicitor has it in writing the fee's will be paid.

As per previous posts and you no doubt know this but never disclose fees to anyone other than company directors and solicitors acting on behalf of a seller.


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## gebbel (30 Oct 2014)

I just called the estate agent and informed them of the outstanding fees. They will contact the vendors solicitor.


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## PatMacG (30 Oct 2014)

gebbel said:


> I just called the estate agent and informed them of the outstanding fees. ...


Ooops.


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## PaddyBloggit (30 Oct 2014)

Any chance of expanding on 'ooops' Pat?


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## markpb (31 Oct 2014)

PaddyBloggit said:


> Any chance of expanding on 'ooops' Pat?



They have disclosed financial information about the owner to a third party without the permission of the owner.


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## gebbel (31 Oct 2014)

markpb said:


> They have disclosed financial information about the owner to a third party without the permission of the owner.



Not the actual amount. But now that you've pointed it out I can see how it was perhaps unwise to do so. I initially only mentioned there was a management company involved, but did mention arrears.


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## Bronte (31 Oct 2014)

gebbel said:


> Not the actual amount. But now that you've pointed it out I can see how it was perhaps unwise to do so. I initially only mentioned there was a management company involved, but did mention arrears.


 
People are getting too technical. The previous owner, what exactly would be be able to do to you legally if he found out you had informed the EA about the management fees owing. 

In any case this is a normal part of everyday conveyancing business. I would assume more than half of all managed units have arrears. 

I would not rely on the EA. Telephone the solicitors office today - before the monies are disbursed. And follow up with a letter by registered post to the solicitor.

As MF1 mentioned the purchasers solicitors obligations.  It's decidedly odd that the purchasers solicitor did not ask you for proof that the fees were owing.  That purchaser could be in for a nasty shock !


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## PatMacG (31 Oct 2014)

markpb said:


> They have disclosed financial information about the owner to a third party without the permission of the owner.


Yes that's pretty much it (from my perspective). In the circumstances outlined the person who need a fire lighting under them is the purchaser's solicitor. It has nothing got to do with the EA.


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## Padraigb (31 Oct 2014)

PatMacG said:


> ... In the circumstances outlined the person who need a fire lighting under them is the purchaser's solicitor.


How is the OMC supposed to contact the purchaser's solicitor? In the circumstances outlined, no contact has been made with the OMC on behalf of the purchaser.


> It has nothing got to do with the EA.


Yes and no. It is not appropriate to give information to the EA, but I think most EAs accept that it part of their work to facilitate communications related to the sale. After all, if a sale falls through because of an unresolved problem, the EA might not get a fee.


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## PatMacG (31 Oct 2014)

Padraigb said:


> How is the OMC supposed to contact the purchaser's solicitor? ...


I haven't suggested any such course of action, merely pointed out that the purchaser's solicitor seems to have been slow to act and needs a gee-up. I haven't suggested who should provide the gee-up.


Padraigb said:


> ... In the circumstances outlined, no contact has been made with the OMC on behalf of the purchaser. ...


I know, I read that.


Padraigb said:


> ... Yes and no. It is not appropriate to give information to the EA, but I think most EAs accept that it part of their work to facilitate communications related to the sale. After all, if a sale falls through because of an unresolved problem, the EA might not get a fee.


No, the EA is not entitled to be privy to such information. The issue here as I see it is one of data protection, not minding the EA's percentage. A representative of an organisation, a data controller, has contacted another organisation and relayed confidential financial information. That could be a serious matter.


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## mercman (31 Oct 2014)

This is quite simple to correct. Under normal circumstances the solicitors acting for a purchaser ask the Management Company (or their solicitors) to confirm all remains satisfactory. If its not, the outstanding balance is taken from the sale proceeds. If the MC don't shout then it is of no relevance to the new owner. 

Let the previous owner deal with their own affairs. It is of no importance for a new owner as to what a previous owner did and what he owes.

This is what the conveyance of an apartment is for. The solicitor is getting a fee for doing this work, so let them do what they are getting paid for.


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## mf1 (4 Nov 2014)

"If the MC don't shout then it is of no relevance to the new owner."

Not true. The new owner inherits the debt. 

"It is of no importance for a new owner as to what a previous owner did and what he owes."

Not true. The new owner inherits the debt. 

mf


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## superhooper (10 Apr 2015)

Sorry to resurrect this thread but does anyone know for a fact how this works as I'm a Director of a company with a similar issue. AFAIK under the MUD act the debt is contract debt so I would think it stays with the seller and can't be transferred?? Therefore to get this debt back you would have to have a judgement against the seller and then try and get the money when the sale goes through?Anyone like to confirm or deny??


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## Butter (15 Apr 2015)

Is the property in question only sale agreed?
In circumstances like this we have gotten in touch with the estate agent in question & pointed out to them that there is a management company in operation in the development & to please ensure the potential purchaser is aware of this. We do not discuss the current status of the account.

What has always happened then is that the purchaser's solicitor is aware of the management company & makes enquiries of the seller's solicitor. The seller's solicitor has to ask for requisition 37 documents, current balance, accounts etc from the management company.

Our policy is that we do not furnish this information to the seller's solicitor until the account is clear. We have cleared several long-standing balances this way.

We have found it is best to be proactive in the case of properties selling within our development. This is far easier than chasing sellers/getting old fees from new purchasers if something falls through the cracks during the conveyancing process. Not saying it will but there is always that possibility - particularly in our case as the management company does not appear in the property title deeds.


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## Seagull (15 Apr 2015)

You might want to run that practise past a lawyer. My understanding is that you have no grounds to inform the estate agent that the current owner is in arrears with management fees. You might just find yourself at the wrong end of legal proceedings.


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## Leo (15 Apr 2015)

Seagull said:


> You might want to run that practise past a lawyer. My understanding is that you have no grounds to inform the estate agent that the current owner is in arrears with management fees. You might just find yourself at the wrong end of legal proceedings.



If you read the post clearly, they're not saying that.


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## superhooper (15 Apr 2015)

Seagull said:


> You might want to run that practise past a lawyer. My understanding is that you have no grounds to inform the estate agent that the current owner is in arrears with management fees. You might just find yourself at the wrong end of legal proceedings.


Butter specifically said that "we have gotten in touch with the estate agent in question & pointed out to them that there is a management company in operation in the development & to please ensure the potential purchaser is aware of this. We do not discuss the current status of the account."


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## superhooper (15 Apr 2015)

Butter said:


> This is far easier than chasing sellers/getting old fees from new purchasers if something falls through the cracks during the conveyancing process.


This is exactly what has happened now. The seller has passed the debt on to the purchaser so we now going to have to start chasing them down if they don't pay. Doesn't seem to have been in our control in any event.


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## Butter (15 Apr 2015)

Leo said:


> If you read the post clearly, they're not saying that.


Thanks Leo. You have read my post correctly. Seagull didn't. 

I said we do not discuss the status of the account for the property in question. We merely tell the estate agent a management company is in operation. That's not breaching any data protection laws.


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## Butter (15 Apr 2015)

How did it slip past the purchaser's solicitor? I think I remember seeing advice here before that you send the bill to the new owner of the property & they have to go back to their solicitor to chase the seller. 
Is there nothing on your title deeds about the management company?


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## Butter (15 Apr 2015)

mf1 said:


> "If the MC don't shout then it is of no relevance to the new owner."
> 
> Not true. The new owner inherits the debt.
> 
> ...



According to mf1 you need to chase the new purchaser.

It appears it's now their debt & it's up to them to pay it and/or to go back to their solicitor about why they've been landed with the bill. Very messy.


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## superhooper (15 Apr 2015)

Butter said:


> According to mf1 you need to chase the new purchaser.
> 
> It appears it's now their debt & it's up to them to pay it and/or to go back to their solicitor about why they've been landed with the bill. Very messy.


Yip messy is the word. MUD act being as clear as Mud in this regard anyway.


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## gebbel (16 Apr 2015)

Just to update here...the sale has not yet gone through but I'm comfortable enough that it won't until the fees are recouped. It's a bank sale and these things can take a ridiculous amount of time.


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## gebbel (20 May 2015)

Update: the sale has gone through but not before all outstanding monies were paid to the OMC. All's well that ends well.


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## Leo (21 May 2015)

Good result Gebbel, thanks for coming back to let us know how it worked out.


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## Vanessa (2 Aug 2015)

Good to see the various opinions here. Management companies have to be onthe ball as it is would be very difficult to get a new owner to take on the debt


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## superhooper (2 Aug 2015)

Vanessa said:


> Good to see the various opinions here. Management companies have to be onthe ball as it is would be very difficult to get a new owner to take on the debt


I'd say impossible really as my read of this is that this debt is personnel debt. This is going to be a bigger problem going forward.


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## mathepac (2 Aug 2015)

@Seagull At no point did @Butler say the account information was revealed to the EA, only the fact that a Management Company existed. Not supplying documents required to complete a sale can be interpreted several ways.


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## Butter (24 Aug 2015)

There's no need to tell the EA anything other than the fact that a management company exists & to inform the buyer. 

The EA doesn't need to be told anything about the supply or not of documentation. 

When the seller's solicitor requests documentation they can be informed that it is the policy of the company only to supply documentation when accounts are clear. That could apply to people paying by dd as much as people in arrears. 

People get very hot under the collar about data protection - less so, it sometimes seems about owners who refuse to pay what's owed. 

Refusing to supply documentation is one of the few ways available to clear accounts in the event of a sale, without incurring a large cost.


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