# Solicitor recommendation for management company



## billtopper (3 Jul 2007)

Hi,

I was just wondering if anyone could recommend a good solicitor based on the Northside or in the city centre, who could advise the directors of a recently taken over property management company. Specifically issues such as non-payment of management company fees by some tenants, what would happen if the company was to be stricken off (resulting in potential titles issues) and so forth.

All advice greatly appreciated.

Regards
Bill


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## ClubMan (3 Jul 2007)

No chance any of the members of the management company might be a solicitor or have contacts that might be able to help out possibly at a discount? One solicitor resident/member of our management company once gave some free advice to the company on a specific matter although she did not want to be engaged on an ongoing basis. Just mentioning it in case it's an option and not ruled out through possible conflicts of interest etc...


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## billtopper (3 Jul 2007)

ClubMan said:


> No chance any of the members of the management company might be a solicitor or have contacts that might be able to help out possibly at a discount? One solicitor resident/member of our management company once gave some free advice to the company on a specific matter although she did not want to be engaged on an ongoing basis. Just mentioning it in case it's an option and not ruled out through possible conflicts of interest etc...



It would be great if that were the case but unfortunately no. We have the money there to cover the cost of obtaining advice luckily enough as well. However, we do want to make sure we are engaging someone who is very familiar with the whole property management company setup.


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## Madangan (3 Jul 2007)

billtopper said:


> Hi,
> 
> I was just wondering if anyone could recommend a good solicitor based on the Northside or in the city centre, who could advise the directors of a recently taken over property management company. Specifically issues such as non-payment of management company fees by some tenants, what would happen if the company was to be stricken off (resulting in potential titles issues) and so forth.
> 
> ...


 

If the company is struck it will have to be reinstated which will involve accountants fees,solicitors and barristers fees...so dont let it get struck off  Seriously if you do, all those non service charge paying owners will suddenly be very interested in the management companies affairs when they cant sell their apartments until the whole reinstatement process has gone through.


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## ClubMan (3 Jul 2007)

Does the management company engage and management agent to deal with day to day matters and who might be able to provide the legal advice indirectly? As far as I know our management agent deals with stuff like chasing those in arrears and enforcing the house rules etc.


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## billtopper (3 Jul 2007)

Madangan said:


> If the company is struck it will have to be reinstated which will involve accountants fees,solicitors and barristers fees...so dont let it get struck off  Seriously if you do, all those non service charge paying owners will suddenly be very interested in the management companies affairs when they cant sell their apartments until the whole reinstatement process has gone through.



Yeah, we're hoping it won't have to go that far. However, just in case it does we'd like to take legal advice on the ramifications.


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## billtopper (3 Jul 2007)

ClubMan said:


> Does the management company engage and management agent to deal with day to day matters and who might be able to provide the legal advice indirectly? As far as I know our management agent deals with stuff like chasing those in arrears and enforcing the house rules etc.



Unfortunately due to many members getting into arrears a stand-off developed with the management agent. Rather than allow the situation continue to deteriorate it was decided that the management agent would resign and the some concerned residents took over as directors of the management company. Now we're faced with the prospect of recovering money from those who haven't paid (or hugely increasing the fees for those who are paying). Obviously this mightn't work out, so we want to take legal advice should continued non-payment of arrears by some residents force the company into insolvency.


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## Madangan (3 Jul 2007)

It sounds like what you need initially from a solicitor is a letter of advice setting out the very serious financial consequences of the company being stuck off and then having to be reinstated and then advising on what can be done about errant owners ie debt collection proceedings,whether you are entitled to charge interest on arrears under the leases(almost all modern leases allow for this. Armed with your scary letter from solicitor an egm of the company must be called so that everyone has the opportunity to be told what is going to happen. Then you need to put your money where your mouth is and firstly get accounts audited and submitted to companyoffice to avoid a stike off(that is if one iis imminent) and secondly actually threaten legal proceedings and then actually issue them.

This is probably all very obvious advice but the reason I would set it out is firstly a lot of solicitors dont like this type of work because it can be very time consuming without much reward. That said most conveyancing solicitors have a good working knowledge of this area and if you were happy with the solicitor who acted for any of you when you bought they should be able to give the initail letter of advice.They may not want to get involved with the debt collection side of things subsequently however.

Secondly there are some people who will never pay a penny unless forced to and will laugh at your threats to sue them. The only way is to sue them and this includes the interest,you might do a few test caes first e.g three of the worst offenders, if you win you then write to all the owners telling them the good news .i.e that you successfully sued or(if settled) got the arrears,the message will soon get out that it pays to pay,otherwise these people will never pay up and will continue laughing at the " mugs " (In their opinion)who do especially the really conscienscious "mugs" who decided to take on additional responsibiltyand get involved like the OP

There is likely to be a cost ie you may get the arrears but not your legal costs particularly if you settle your cases but even that may be better than not getting a penny.


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## bond-007 (3 Jul 2007)

Even getting a judgment is not a sure way of getting the money. They can continue to ignore you. You can continue in the courts to get the money by way of installment orders etc but you have to foot the costs of these proceedings. 

If a strike off is close by the fees owed to the CRO will be in the thousands. Are you sure that the funds can be raised within the 30 days.


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## Stifster (3 Jul 2007)

I have acted for management companies before and it is an extremely time consuming area and can have few rewards as madangan said. It's interesting though (depending on what the management company wants to do). If you have written to the tenants who are in arrears then the solicitor can simply issue debt collection letters. 

I would suggest one of the large debt collection firms might do it as they employ legal execs to do the work.


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## bond-007 (3 Jul 2007)

You could employ all the debt collectors in the world and people could simply ignore them and not pay. At the end of the day you have to pay them for their efforts and could end up costing you more than you might hope to recover. Debt collection is a time consuming job and often yields very little for the time and efforts put in. 

You should contact the errant debtors and explain in stark detail the consequences of a company strike off for their property.


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## Madangan (3 Jul 2007)

Stifster said:


> I would suggest one of the large debt collection firms might do it as they employ legal execs to do the work.


 
The specialist firms charge literally every time they pick up your file even if only to write to you to tell you that nothing has happened. Thats not a criticism of them ,its simply the only way you can make money out of debt collection particularly at district court level(which is where most service charge cases would be). ( and this is why most solicitors dont want to do that work.. its not that they dont make a big profit from it rather they dont make any profit from this type of work when you look at amount of time involved) The problem is you will almost certainly not recover other than a small percentage of the legal costs because generally speaking the costs that are awarded in debt type cases in the district cout are governed by a fees order(scale costs) that is seriously out of date and bears no reality to the celtic pussycat.

This is what the non payers bank on. The only way to improve the position generally is to take a few cases all the way and when you get judgement register that as a judgement mortgage against the property. They last about 6 years?? so at least you knpw that if they try to sell or remortgage in those 6 years they have to pay. Also court interest runs from the day you get judgement so you should get them in the end.

Other defaulters may decide its easier to pay up if they see you being tough and equally important is that the honest punctual payers dont get so fed up that they stop paying also.

Also some companies now publish lists of the defaulters a name and shame thing but you better get your facts spot on if you do this as libel cases are much more profitable apparently(ps im from mayo)


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## ClubMan (3 Jul 2007)

Madangan said:


> Also some companies now publish lists of the defaulters a name and shame thing but you better get your facts spot on if you do this as libel cases are much more profitable apparently(ps im from mayo)


There was a recent thread about this issue of management companies listing/"publishing" names of those in arrears although it was not that conclusive on some of the issues...


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## bond-007 (4 Jul 2007)

Madangan said:


> The specialist firms charge literally every time they pick up your file even if only to write to you to tell you that nothing has happened. Thats not a criticism of them ,its simply the only way you can make money out of debt collection particularly at district court level(which is where most service charge cases would be). ( and this is why most solicitors dont want to do that work.. its not that they dont make a big profit from it rather they dont make any profit from this type of work when you look at amount of time involved) The problem is you will almost certainly not recover other than a small percentage of the legal costs because generally speaking the costs that are awarded in debt type cases in the district cout are governed by a fees order(scale costs) that is seriously out of date and bears no reality to the celtic pussycat.
> 
> This is what the non payers bank on. The only way to improve the position generally is to take a few cases all the way and when you get judgement register that as a judgement mortgage against the property. They last about 6 years?? so at least you knpw that if they try to sell or remortgage in those 6 years they have to pay. Also court interest runs from the day you get judgement so you should get them in the end.
> 
> ...



I think you have summed it up nicely there.


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## billtopper (4 Jul 2007)

Thanks for the advice people greatly appreciated. Just to clarify somewhat, the company is in no immediate danger of being stricken off. Accounts for the previous financial year have been filed. Our concern is that the debt owed to the company is mounting, many residents owe fees dating back several years and many thousands of Euro. Many of the fees paid have only been as a result of people who were forced to do so by their solicitor as they wished to sell their home. However, due to the stand-off with the management agent, the number of people paying last year's fees has plummeted.

As it stands the company has just about enough money left to meet this year's obligations for lighting, insurance, refuse collection and so forth but would not be in a financial position to deal with any maintenance problems or the like. Fighting a protracted legal battle to force people to settle up would be out of the question.

The management agent did employ a debt collection agency - at great cost to the company - but it was of little benefit in persuading people to pay up. My concern is that many of those in debt simply will not have the money to pay what they owe. Given that a group of us are now running the company ourselves we are keen not to get involved in banging on people's doors looking for money.

Our plan is as follows

- Talk to a solicitor who can outline the direct legal implications should the company be declared insolvent (perhaps a letter from the solicitor detailing the same of which we can send copies to the residents).

- Send out letters to residents asking them to settle their bills. Outline exactly what will happen if the company is stricken off. An indication that we will begin to charge interest on unpaid debts might encourage some to pay up.

- Call this year's AGM and outline in the starkest possible terms the state of the accounts. As you can guess however, those who don't pay the fees do not attend the meetings.

- Send out letters using a "name and shame" policy in the hope this will encourage even more to pay up.

As I said, my fear is that many people simply will not have to money to pay what they owe even if they do have a change of heart. Since the company cannot afford to provide much in the way of maintenance, I'm afraid that we will once again be in the same stand-off position as the management agent.


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## ClubMan (4 Jul 2007)

billtopper said:


> but would not be in a financial position to deal with any maintenance problems or the like. Fighting a protracted legal battle to force people to settle up would be out of the question.


Whatever about those in arrears (what percentage of annual turnover are the arrears?) this may point to the need to increase management charges to beef up the sinking funds set aside for such contingencies. Of course this won't go down well with those who are paying on time while there are others not bothering... 


> My concern is that many of those in debt simply will not have the money to pay what they owe.


 Has it ever happened that somebody in arrears has sold up and then had to clear their arrears as they should? We had one case where this did not happen in spite of it supposedly not being possible! 


> - Talk to a solicitor who can outline the direct legal implications should the company be declared insolvent (perhaps a letter from the solicitor detailing the same of which we can send copies to the residents).


 I wonder if you can get this information elsewhere - e.g. from one of the sites that discusses management companies, their legal standing and possible legislative changes in this regard? For example ConsumerConnect has some information that could be useful.


> - Send out letters to residents asking them to settle their bills. Outline exactly what will happen if the company is stricken off. An indication that we will begin to charge interest on unpaid debts might encourage some to pay up.


 Is the company not already adding interest and collection/legal fees to the arrears? Ours does.


> - Send out letters using a "name and shame" policy in the hope this will encourage even more to pay up.


 As I mentioned before there is an existing thread discussing this but there were divergent views on the issue.

Management Co. posting defaulters list, how legal?

 Our management company certainly lists the addresses and amounts of arrears in every annual report.


> I'm afraid that we will once again be in the same stand-off position as the management agent.


 Can you explain this please? I thought that the management agent was gone?


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## billtopper (4 Jul 2007)

ClubMan said:


> Can you explain this please? I thought that the management agent was gone?



The management agent is definitely gone. However, many residents claim they are refusing to pay the service fees because they perceive the service delivered to be poor or non-existent. The management agent claimed that while fees remain unpaid they could only concentrate on paying essentials such as lighting and insurance and provided no maintenance of the common areas. Given the precarious state of current finances it is unlikely we will be able to do anything to improve the service delivered without significantly bolstering the account through increasing the fees for the residents who are paying or collecting the somehow collecting unpaid debts.

Arrears currently amount to approximately 50% of turnover. The sinking fund contains roughly the same amount, which must now be used to pay upcoming bills for insurance and refuse collection. That will pretty much wipe out the sinking fund hence my concern that we be fully briefed on the implications of insolvency for the company.

I'll have to examine the accounts in greater detail but the management agent did mention that it looks like one or two people bought and notified them of a change of ownership despite the unpaid bills. Their understanding was that the cut price conveyancing solicitors sometimes ignore these issues. However, this bill would fall due on the new owner.


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## Madangan (4 Jul 2007)

billtopper said:


> However, many residents claim they are refusing to pay the service fees because they perceive the service delivered to be poor or non-existent. The management agent claimed that while fees remain unpaid they could only concentrate on paying essentials such as lighting and insurance and provided no maintenance of the common areas. Given the precarious state of current finances it is unlikely we will be able to do anything to improve the service delivered without significantly bolstering the account through increasing the fees for the residents who are paying or collecting the somehow collecting unpaid debts.
> 
> Arrears currently amount to approximately 50% of turnover. The sinking fund contains roughly the same amount, which must now be used to pay upcoming bills for insurance and refuse collection. That will pretty much wipe out the sinking fund hence my concern that we be fully briefed on the implications of insolvency for the company.
> 
> I'll have to examine the accounts in greater detail but the management agent did mention that it looks like one or two people bought and notified them of a change of ownership despite the unpaid bills. Their understanding was that the cut price conveyancing solicitors sometimes ignore these issues. However, this bill would fall due on the new owner.


 
Sorry if this sounds harsh but the individual owners need a serious reality check..if you dont pay you cannot expect a decent level of service. I sympathise to the extent that some (not all) managing agents are very very poor and seem only to be interested in collecting their fees but at your meeting you have to emphasise that those of you brave enough to take this on(and sadly with the level of time and energy you will have to devote to this coupled with the abuse you will invariably take from some owners you will probably wish you had not) are new and not responsible for the sins of the managing agents but that you do have to deal with the mess left behind.
You are going to have to scare the bejaysus out if everybody if you are going to make progress. Not by scaremongering but by telling it how it is:

A. If people dont start paying the level of service will go from poor to non existent. 
B. Things cannot get better until the money comes in not vice versa
C. Promise regular updates and agree to hold more meetings so people can see what progress is being made
D Tell them that as the service suffers so will the entire value of the estate and therefore their home/ investment.This is far more serious now in what is becoming a buyers market.
E If there is no money to pay for audited accounts the company will be struck off and serious money necessary to pay to have it reinstated
F If it is not reinstated only idiots or people with idiots as their solicitors will buy their apartment: reality almost unsellable apartment!
G So if people want to live in or own a fast becoming derelict apartment complex which they cant sell until an ever mounting lump sum has to be paid then keep not paying the service charge but if you want to stop the rot then start paying now.
H Again some will never pay and you must be seen to chase these and therfore it might be worth setting up a legal fund(contributed to by those who pay) so that you can get the non payers in the end. If people who pay finally see action being taken against those who dont they may be surprisingly happy to pay more towards a legal contingency fund. The test cases would be perfect here. There may be cases of genuine hardship but do those people drive nice cars,have plasma tvs?? People need to get their priorities right also you can usually tell the genuine from the fraudster and in true cases you can work out payment plans ..you cant afford to be an easy touch
I If there are new people who have inadvertently inherited old owners debt due to their solicitors negligence or however then they have to go after the old owner and their own solicitor,sorry no sympathy the management company have enough problems of its own.
J Seriously if after telling your fellow owners the harsh realities they still dont want to pay or authorise you to take serious steps to remedy the situation then I can only advise you to step down from the management company effective immediately and put your apartment on the market asap and get the hell out as things will only get worse. It will become increasingly apparent over the coming years that badly run management company developments will lose value or not keep up in value and will be hard if not impossible to sell. So get out now(while your sanity is still intact)>


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## ClubMan (4 Jul 2007)

Madangan said:


> So get out now(while your sanity is still intact)>


You mean sell up?  Surely a bit rash?!?


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## bond-007 (4 Jul 2007)

Not if the company goes insolvent and ends up on the strike off list. His apartment will be worthless.


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## billtopper (4 Jul 2007)

Madangan said:


> So get out now(while your sanity is still intact)>



I appreciate the advice Madangan. Some good points in your post. With regard to selling it is certainly something I have thought about but in many respects it is not really my style. I am happy where I am living. Why should I be run out of my home because a bunch of idiots refuse to pay what they owe? I'll do my best to rectify the current situation by working with the other residents but I don't think I should be forced to sell.

That said I do have the luxury of living in a house in the estate rather than the apartment complex. Funnily enough, all the directors are house owners rather than apartment owners. The houses are freehold rather than leasehold but the car parking spaces attached to the houses are leasehold. All the long term debtors are apartment owners. The apartments pay significantly higher fees because of the higher costs associated with the maintenance, insurance and so forth of the apartment blocks.

Again this is the problem when it comes to meetings. Only the house owners and a couple of the apartment owners (all fully paid up) show up. I will certainly be sending out letters stressing the importance of everybody paying but am preparing myself for the worst given the length of time this has been going on. Basically, I'll follow pretty much all your points outlined but will stop short of selling my home! However, as a director I have an obligation to alert the CRO if the company becomes insolvent. Obviously I don't wish it to get that far but want to be prepared for the possibility.


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## Madangan (4 Jul 2007)

Hi Billtopper,

I promise this is my last post.

I fully agree with you that if you are in a house you are in a better position than in an apartment in these circumstances. While the problems are the same they are magnified if you have an apartment rather than a house or duplex.

If I had heard my own advice (about selling ) a year ago Id have said it was crazy talk. So why do I say it now?

If you are in the market for a nice apartment and now in a more balanced market even maybe a buyers one you find 2 or 3 that fit your needs. Lovely well (internally) maintained apartments ..which do you buy?which do you push the boat out for and pay a wee bit more?

Apt A : common areas looking a bit rough round the edges,unloved, no sinking fund to speak of and a very high number of owners in arrears

Apt B : Same scenario but your solicitor tells you that the company is struck off and when viewing you bump into residents,start chatting to get the inside info on and they say management co useless never do anything etc..

Apt C :common areas lovely and clean, very tidy,great first impression, half decent sinking fund and relatively low level debtors,

Its a no brainer really! Also this whole area is now becoming a real hot potato so buyers in the future will be far more tuned in to this,they will be asking about these things from the off.

Lastly its takes a few years before a badly run management company begins to manifest itself physically ie grotty run down common areas but 5 to 10 years on it will be as clear as crystal.

Dont despair it can be turned around when people realise whats in it for them ( and with people like you willing to take on the responsibility),

good luck with it


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## ClubMan (4 Jul 2007)

bond-007 said:


> Not if the company goes insolvent and ends up on the strike off list. His apartment will be worthless.


Will it actually be *worthless *even in this situation?


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## bond-007 (4 Jul 2007)

If you can't sell it, then it is worthless.


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## ClubMan (4 Jul 2007)

Can you definitely not sell it if the management company is struck off?


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## Madangan (4 Jul 2007)

I know i said it was my last post but this will be !

Most solicitors would be very reluctant to advise a client to proceed without getting at least a   significant reduction in price to cover what the purchaser may have to pay towards reinstatement of company, many solicitors would insist on telling the bank who might then refuse to continue with the loan, some believe that as the company is gone( for the time being) the property cant be properly insured, no arrears can be successfully sued for until reinstatement so it becomes a big mess

 Most problems can be solved if enough money is thrown at it but best case scenarioserious price drop worst case cant sell till problem solved.


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## ClubMan (4 Jul 2007)

Thanks _M_.


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## billtopper (5 Jul 2007)

Feel free to post as often as you wish Madangan - all help and advice is appreciated. Although I won't be selling my home, no matter how precarious the company's finances. Furthermore, it would involve being somewhat duplicitous to the person I'm selling to which is not something I'd be happy about either.

I don't agree that an apartment you cannot sell is _worthless_. Even with the management company stricken off I'm sure someone, somewhere would buy it for some amount. I can continue to live in it as well. It might be fairer to say that without a functioning management company the prices of all the houses/apartments are likely to experience serious depreciation but "worthless" is a bit harsh.

Examining the accounts in further detail I notice that there are a number of apartments which are rented but not shown as such on the accounts. Many of these landlords are in arrears. I am going to suggest we tackle these debts first as there is less likelihood of ill feeling being generated as a result. Is there any means of obtaining the landlord's addresses without contacting the tenants? None of them appear to be registered with the PRTB according to their website.

The more I think about it, the more I think we need to obtain advice from a solicitor with expertise in conveyancing. That's the main concern of the residents who are paying fees. What happens to the freehold if the company is stricken off and can we make moves now to lessen the impact - e.g. transfer freeholds to the leaseholders for a nominal sum wherever practical? Something I'm curious about as well is what happens to the debts people owe if the company is stricken off? Presumably they don't disappear, right?


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## ClubMan (5 Jul 2007)

billtopper said:


> I don't agree that an apartment you cannot sell is _worthless_. Even with the management company stricken off I'm sure someone, somewhere would buy it for some amount.


Or somebody will rent it.


> but "worthless" is a bit harsh.


I agree.


> Examining the accounts in further detail I notice that there are a number of apartments which are rented but not shown as such on the accounts.


Why would that be shown on the accounts? Our accounts make no mention of which properties are rented and which are owner occupied.


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## bond-007 (5 Jul 2007)

> Is there any means of obtaining the landlord's addresses without contacting the tenants? None of them appear to be registered with the PRTB according to their website.


A search of the land registry is needed here. Do that via a solicitior.

I retract my "worthless" comment, in hindsight it was a bit harsh. Sorry.


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## Madangan (6 Jul 2007)

billtopper said:


> Feel free to post as often as you wish Madangan - all help and advice is appreciated. Although I won't be selling my home, no matter how precarious the company's finances. Furthermore, it would involve being somewhat duplicitous to the person I'm selling to which is not something I'd be happy about either.
> 
> I don't agree that an apartment you cannot sell is _worthless_. Even with the management company stricken off I'm sure someone, somewhere would buy it for some amount. I can continue to live in it as well. It might be fairer to say that without a functioning management company the prices of all the houses/apartments are likely to experience serious depreciation but "worthless" is a bit harsh.
> 
> ...


 
The house owners probably already own the freehold in their houses, apartment owners probably hold under long leases and the common areas both internal(in the apartment blocks including the roofs) and external eg roads footpaths etc.. are probably owned by the management company probably with a freehold title.

Transferring freehold to the apartment owners is not a good idea (for technical conveyancing reasons which you dont want or need to know) but more importantly it doesnt solve the problem because it is the common areas which are the problem. 

Sadly there is no easy solution to the problem hence the need for a management company to exist and be properly run. Management companies are actually the solution  to the problem but when badly run they become the problem. 

The people who control the management company are not the few who take on the responsibility of running it but actually every single owner in the estate. If a management company is badly run it is the fault of all the owners but of course we live in an era where everyone wants to blame others for their woes without ever looking in the mirror! And if you were to repeat that last comment at an egm of the company youd probably be lynched!

You should go after the absentee lanldords as they also tend to be the last to pay up as they have no personal sense of responsibility and they dont have to put up with the problems day to day( a gross generalisation I know). Be aware though that any service charge more than 6 years old becomes statute barred so you should issue proceedings if anyone is more than 5 years in arrears. Also in such a case if someone pays part of their arrears you must only accept it if it is agreed that it is set off against the oldest arrears e.g 2003 not 2006.

As for yet another post on this thread I think I may have a posting probelm. an AAM addict so Im off now to find some counselling and addiction therapy, 
Adios


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