# Unpaid Service Levy Charge for my House



## One (11 Feb 2009)

I purchased my house (in a housing estate) from plans. The builder went bankrupt long before the house was finished. As the purchase was by stage payments, I used the money from the remaining stage payment (not paid to the builder) to finish the house. I did not profit. I broke even. Almost every evening for three months I used to go to that house after work at 5pm, and stay there working on it until midnight. I used to spend all my weekends there, and the whole of one Christmas. It was very hard going, but it wasn’t the end of the world either.

I got bad news today. The planning permission states that the builder had to pay €4,000 to the Council as a service charge levy. I learned today that the builder never paid this money to the Council for my house. It wasn’t paid for the vast majority of other houses either.

I don’t know whose responsibility it was to pay this money and when should it have been paid. As a first time buyer at the time I knew nothing about this type of matter. I presumed that the builder had paid this to the Council when he had started building the house. I presumed that the onus was on the Council to get this money from the builder. 

Now the Council won’t take the estate in charge unless the service levy charge has been paid. I just can’t see all the house owners paying it. Many people might. But not everybody. Therefore our estate may never be taken in charge.

Am I now liable to pay this service levy charge for my house after already paying for the house in the first place and using the remaining money to complete it?

(I have of course made an appointment to see my solicitor about this next week. But I would like to try and understand the situation better in the meantime. That's why I am asking about it here). Thanks in advance for any advice.


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## mf1 (11 Feb 2009)

You need a Residents Association. 

It seems to me that none of these houses can ever be sold until the planning issue is resolved. The Council can refuse to take the estate in charge until all the levies are paid. The Builder is gone so that ends that avenue. 

When you bought, this issue should have been flagged.

I suspect the best you can hope for is that you form a Residents Association and lobby your local TD to intercede on the Estates behalf to see if either the levy can be waived or a reduced sum paid. These things do not happen as if by magic - they take effort and co-operation from the whole or the majority of the estate. Very often, it is left to a very small selection of people who take on the job while others sit back happily declining any responsibility. That makes my blood boil but I long ago gave up  wondering how people can behave like that.

mf


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## Vanilla (11 Feb 2009)

Totally agree with mf1. As soon as one of these houses is due to be sold the vendor will have a problem.


Law society recommends that where an estate is taken in charge the vendor no longer needs to produce evidence of discharge of financial contribution, so if this is done ( as per mf1 you will need to lobby) you should be okay.

Until then this issue will keep cropping up. 

In the original contract you had to purchase or ancillary closing documentation it should state whose responsibility it was to pay the charge. It would normally be the developer ( though not always). If he has gone into liquidation, political pull is the only answer to this.


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## MOB (11 Feb 2009)

There are a number of questions to be answered, the main ones being:

1.  Can the Council pursue you for the money? ( probably yes - but I would need to research this - and just because they can does not mean they will)
2.  If you want to sell the house, will you have to pay the money to prove that the house is compliant with planning?  ( answer is 'yes' btw)
3.  If not everybody pays up, will it be possible to get the estate taken in charge ( I think maybe yes, but would have to research it)

I suggest that - rather than schedule a meeting with your solicitor - you write to him\her and ask that he\she research the matter thoroughly and issue a comprehensive advice letter.   As this affects a lot of residents, it might be better to adopt a collective approach and perhaps get counsel's opinion.

EDIT - started this post before the comprehensive replies of MF1 and Vanilla


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## ramble (16 Feb 2009)

If you purchased by stage payments the legal title for the property should have passed to you on the first stage payment. .   If you have a mortgage the solicitor acting for you is supposed to ensure that there are no prior charges on the title before parting with the loan funds, a county council levy is a prior charge.   Go back to your solicitor and find out what is going on.  At a minimum they should have got an undertaking from the builders solicitor to pay the levy's from the first stage payment and the builders solicitor should have retained this amount from the money and paid it to the council.


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## One (17 Feb 2009)

First thing I want to say is thank you all for taking the time to give advice. When I opened this thread last week, I was really worried, and the advice you all gave was most helpful.

At present, I am taking that advice and working through the problem. I have approached our local Councillor and discussed this with him. He said (a) he does not believe the residents should have to pay this - the council should write this off as a bad debt and (b) to approach my solicitor and get clarity on the legal aspects of this matter. Then go back to the Councillor.

My solicitor said that he gave this money to the builder’s solicitor years ago, and received an undertaking that it would be paid over to the Council. It was not paid over. I don’t know why.

The planning permission states “Before development commences the sum of €4,000 shall be paid to the Council by the developer as a service charge levy”. My solicitor said that therefore the Council should have ensured that this money was paid over to them before the building started at all. The onus of collecting the money was on them I don’t know why they did not seek the money at the time. 

Thanks again for your replies. I’ll let you know things work out.


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## One (17 Feb 2009)

I entered the above thread twice. I will delete this second one.


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## mf1 (17 Feb 2009)

Ok - just a  few things - you're sort of sliding over some of the most important bits!

First of all, your Councillor is seeking re-election later this year  so, yup, if he says the Council should write off the debt..........Mind you when they say, no way, at least he'll have done his best.    

Is there a "solicitor's undertaking" that the levy would be paid over? That is far more valuable than a defunct builders undertaking. 

"My solicitor said that therefore the Council should have ensured that this money was paid over to them before the building started at all. The onus of collecting the money was on them I don’t know why they did not seek the money at the time. "

This is slithering and sliding on a grand scale!!!! It is not for the Council to check - its for the developer to pay with all the consequences that follow if he does not. One of which is the houses being unsaleable in the future.  So why did everyone complete without checking this very simple basic point? 

mf


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## One (18 Feb 2009)

Was there a solicitors's undertaking? Yes, there was a solicitor's undertaking that the levy would be paid over. The levy has not yet been paid over to the Council.

Why did everyone complete without checking this very simple basic point? I trust my solicitor completely, so I would be fairly sure he did check. I'm waiting on a letter from him, before I know what may happen next.


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## csirl (18 Feb 2009)

Agree with mf1 on this one. 

A Councillor doesnt have the power to wipe a council debt - if he says he does, he's taking a load of bull.

By starting the build, the development cost was incurred. Under prompt payments legislation, the onus is on the developer to pay this charge within 30 days of it being incurred. The council does not have to chase this and it is well within their rights to impose an interest penalty for late payment.


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## One (22 Sep 2009)

Hi all. Just want to say thanks for your answers and help. This matter has been fully resolved now.


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