# bank as property owner not paying management charges



## lantus (28 Feb 2013)

Just wondering if anyone else has come across this where the bank has effectively taken full possession of a property but says it will only pay all service fee's once the unit is sold. Is this even legal?

Can they be subject to debt recovery like any other owner? Would you bother and/or just hold out until the unit was sold...


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## shesells (28 Feb 2013)

The bank can't sell the unit with fees outstanding, the management company won't or shouldn't release the paperwork to facilitate a sale with payment outstanding.

The complicating factor is who the leaseholder is. The legal agreement may still be binding to the original owner. It depends on what paperwork is in place for the bank "having effectively taken full possession"


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## Dermot (28 Feb 2013)

I would imagine that the Management Co. will be safe enough as I cannot see the eventual purchasers solicitor allowing the deal to go through without evidence that the Management Co. fees have been paid. This would be standard practice for all solicitors and in a lot of cases the solicitor would also be looking for a copy of the latest Accounts for the Management Co showing what money is in the Co.


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## shesells (1 Mar 2013)

Dermot said:


> I would imagine that the Management Co. will be safe enough as I cannot see the eventual purchasers solicitor allowing the deal to go through without evidence that the Management Co. fees have been paid. This would be standard practice for all solicitors and in a lot of cases the solicitor would also be looking for a copy of the latest Accounts for the Management Co showing what money is in the Co.



There is a legal document, can't remember the Alphanumeric code for it but it forms part of the purchase documents. This is basically a transfer of lease consent issued by the management company relieving the original owner of their obligations under the lease they signed. Some paperwork also needs to be completed to admit the new owner to the management company. Sale cannot proceed without this paperwork. No management company will issue that without fees being up to date, and there is usually a small additional fee for the work involved in preparing the documents.


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## lantus (1 Mar 2013)

Thanks all for reply's. I guess I am not concerned about any eventual payment as the banks tyically are good for a few quid! One mechanism I intend to use is the application of interest to 'encourage' any lender to pay in the normal fashion rather than wait until the property is sold.

I find that banks dont see themselves as owners as such. They never write or approach the OMC to notify of a change of ownership. This may be as shesells says to do with the lease holders name still being part of the contract. In my eyes its a problem as it seems to be a loophole that prevents them from adhereing to the MUD act requirement to let the OMC know who is the owner. I have had most major lenders refuse to tell me if they 'own' any properties in our development. A written letter usually solves it and of course the land registry is a great help but you really need to know where to target your time and energy. With 200+ houses its not easy guessing what might be a repossesed property. The banks are by nature very coy as they dont want to advertise the issue in the slightest.

The specialist arrears teams are good though once you establish contact. Its good to build up a list of contacts in this area.


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