# Buying an apartment where common areas not transferred to management co??



## dano'b

Hi
I have had an offer accepted on an apartment however it has come to light  that the common areas have not been transferred to management co as required by MUD. 
The complex is about 10 years old and all occupied. 
HAve tried to find answer online, I am totally lost, can this apartment be sold in the first place, am I mad to consider buying it, or is this a common problem?

My solicitor has informed me of this fact in writing but has not commented as to whether I can or should proceed?
Any information appreciated
Thanks


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## Palerider

It seems that you have the right to reside in the unit but not to use common areas to get to your unit such as parking areas or corridors,I came across this myself a couple of months ago and walked away, suggest you ask if your solicitor can guarantee clear and unencumbered title to the unit and go from there.


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## Luternau

That's a bit OTT. In all apts there is an easement in the lease for the common areas. They could not function without this. 
You need to establish why they have not transferred. That they have not, is not necessarily something to concern you. Perhaps the complex is badly managed? No one to take on this task-which has a cost for the company. It may not have it. 
Perhaps the hand over files (as built drawings etc) are flawed?
Maybe the developer is in receivership and the transfer is tied up in legal wrangling?
Perhaps there are outstanding issues that the mangement Co want addressed first?

But to repeat the point, it's OTT to say you could be denied access to the site or the stairs or lift! Your lease grants easements which cannot be taken away without rewriting the lease. Furthermore, the responsibility for managing (cleaning, maintenance, servicing) these rests with the management company whether transferred or not.


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## Dermot

The will be more than likely a cost factor involved in getting the common areas handed over or in getting them ready for being handed over. A lot of this will depend on why they have not been handed/taken over.  You should make sure to get an up to date copy of the accounts to see what is in the sinking fund etc.


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## dano'b

Thank you for the answers. I need to get onto management Co & probably the directors if I can and get further info as to why this has not happened, I can make a decision then. I just wasnt sure whether it was legal to sell the apartment without this in place
D.


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## Bronte

It sounds like one of those places that you need to walk away from.  Anything with common areas built in the last 10 years seem to be a whole heap of trouble.


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## dano'b

Hi
I have found out that developer is no longer around and last accounts filed for his firm are 2006. Anyone know what the process is given this fact? would I be right in thinking the management co need to set about seeking a court order to transfer the common areas to the management company?
Anyone know if this is a complicated process, likely timescale or cost?
I havent managed to speak to anyone from the management company just yet
Thanks


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## Dermot

From a sad experience of my own I would strongly advise you to walk away unless you are getting a phenomenal bargain. As a matter of interest are you proposing to live in the apartment yourself. Is it a large estate and are all the dwellings and roadways finished


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## dano'b

Hi
Its actually fully finished really nice complex less than 70 apartments in total,lovely area etc etc, have really fallen for it and cant even see anything else I would consider viewing that is in my price range....it would be so much easier if I didn't have those two factors. My heart says yes my head aint so sure!

I am buying it as investment that eventually when I retire I will downsize to and have a family member ready to commit to 12 month lease, since I viewed the property 1 other property went up for rent and was rented at first night of viewing with very large interest in it.

Financially it all stacks up net rent would cover mortgage & service charge but this really is a point that I dont know how to deal with. With the capital gains exemption I had planned on holding onto it for at least the 7 years so am expecting this issue would be resolved by then (or would it!!!!) Surely with the amount of developers gone this must be a huge problem?
Any advice or thoughts more than welcome.


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## Dermot

Do you know who is currently running the management co. at the moment.
Has the vendor paid all the management fees up to date.
Is the company still in existence or has it been struck off.
Do you know the breakdown of resident owners versus renters.
You are going to find it difficult to organise the management co if you are not living convenient to it and it is very difficult to motivate people about management co's unless they have a personal problem with them.
I would like to know that the management was making proper returns before I would pay into it.
There are probably quite an amount of arrears of management fees.
There could be outstanding liabilities that have not been dealt with.
If the bank by chance became aware of the position with the management co they could have issues about lending on it.
Have you discussed this with your solicitor and what advice are you getting generally.


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## dano'b

Hi
Yes solicitor has told me he is obliged to notify the mortgage lender of this fact and obviously if they now decide they wont lend that will put play to everything and be the deciding factor.

The Management Company is in operation, I have copies of the 2012 & 2013 accounts, directors reports and unaudited financial statements.   The service charges seem to be fairly upto date, the unit I was buying was to have the arrears discharged on sale by the vendor.
There is a sinking fund though not near enough in an ideal world.

Ultimately it may be the mortgage company who decides whether I can buy or not but as I see it the common areas are held by the developer (who has gone since 2006) these areas are being really well maintained and paid for by the unit areas and there is a law there that says these areas should be held by the management company.
Basically if the law is there how can it be forced through if the developer is gone, I understand the lease aspect but who now is the "2nd party" to this action given the developer isnt around, how complicated adn how costly is such an action.
What I need to know from the management Company is what has happened since 2011, has legal advice been obtained, has anything been done to instigate what ever is necessary to get this sorted.

It seems bizzare that a law that says something had to be done in September 2011 has not been enforced and this law designed to protect owner in MUD may prevent me from purchasing and an owner who wishes to sell from selling..........


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## Dermot

You need to discuss the matter with one or more of the directors and get their views on what progress if any on handing over the common areas.  Has there been management co meetings held every year.  You are entitled to receive a list of all the owners and contact details of the properties in the development and discuss their views on the current situation. You can download a copy of a very useful handbook which you should read and it is quite helpful. I have posted a link to same.
 [broken link removed]


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## dano'b

Thank you for that info. I have left a message for one of the directors yesterday, there have been annual meetings, I have minutes of last two, this wasn't even discussed. Any owners I talked to didn't even know it was a requirement. As they see it common areas being maintained well so not for now causing any problems for them and probably won't until they try to sell.

Really hope this is one I get to make a judgement on based on my research and findings and not one the bank decide on for me!!!
Tks again


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## rafals

MIght I ask what was the end of the story ??

How this flow on mortgage lander ??

What is blackest scenario when common areas were not transferred to Management Company ?


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## dano'b

I have no update on this, its with the banks legal team weeks at this stage to consider, cant get any update from them other than once considered they will let me know, am going to post in the mortgage section see if anyone else any similar experience 
Tks


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## ShaunB

Hi Dan,

Im searching on the internet and came across your post. I'm going through the exact same problem as you here.  I have my mortgage, I got sale agreed on the apartment but have run into a snag with this Management company agreement of the common areas! 

Can I ask you did yours ever get resolved??? and if so how did you resolve it. Ive already lost 1 apartment last year due to the previous owner not having full title and I'm absolutely terrified the same thing is going to happen me on this one.  So any advice would be much appreciated??

Thanks

Shaun


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## lantus

who holds title for these lands? the builder?

I know of one estate near Dublin where the builder went bust and the receiver is now threatening to just liquidate the entire company including common area title now they have sold all the assets.

its a good job we have a system where receivers operate above the law and are answerable to no one otherwise they could be in trouble...
shame for all the unit owners if this does happen though, what can they realistically do if the receiver does attempt to do this?


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## mtp

I have just made application to c court under s 24 for the reason u state Seem to me no choice.

1 S Charge being used to maintain land the responsibility of the developer under our lease until common area transferred and 2 No Sign of Receiver recognising the interest of the man co in the land as yet .

Any member can make application - If board not in fund or of inclination. Not just member who can apply - see S25 of MUD Act. But really have to take legal advise. very complicated.


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