# Inactive Management Company



## Marie28 (21 Nov 2018)

Hi All, Just looking for some advice. I am in the process of buying a house and have been informed there is a management company in the estate but they are inactive and the council has not taken over. The vendors solicitor has declined to provide any information regarding the management company and informed my solicitor that the residents in the estate pay €50 per house per year for grass cutting etc. I have no problem with this at all. My worry is that the management company will decide to become active and chase me for fees in the future for years I was not resident there. The estate was built in and around 2005/06. Any advice or assistance would be appreciated. TIA


----------



## Leo (21 Nov 2018)

What happens if larger expenses arise? The estate just falls into ruin? Without better information from the vendors, I'd be very wary.


----------



## Palerider (21 Nov 2018)

Are there apartments in the same development as your house.

If there are I think there needs to be a functioning owners management company, make some further enquiries, I would not be satisfied with the situation you outline, once you buy it you own all the issues, not just for now but for the future, have your solicitor get confirmation from the sellers end that all outstanding fees to the OMC are paid and get a receipt to confirm.


----------



## JohnJay (21 Nov 2018)

are there street lights? who pays to keep these on?
is is a gated estate? who maintains the gates?
who pays the public liability insurance for the common area?


----------



## rayn (21 Nov 2018)

And don’t forget the sewers, surface water drains, water mains and road maintenance.


----------



## JohnJay (21 Nov 2018)

I'm sure there are lots of small developments like this around the country that get on perfectly well, but I did rent a room once for a few months in a small development of 8 houses which had its electric gate stuck opened permanently and street lights that didn't work, both of which lead to security issues.


----------



## Marie28 (22 Nov 2018)

Hi all, thanks for the replies, it is just houses, no apartments. I will get onto the solicitor today as its making me very uneasy, I was wondering if the council can refuse to fix issues with sewers, or water mains if the estate has a management company?!


----------



## Leo (22 Nov 2018)

Marie28 said:


> I was wondering if the council can refuse to fix issues with sewers, or water mains if the estate has a management company?!



They generally won't touch it if the estate hasn't been taken in charge. If sewers become blocked, someone is going to have to organise to collect the share of costs from all houses affected. Don't know about you, but I wouldn't want to be dealing with that.


----------



## Marie28 (22 Nov 2018)

Thanks Leo, to be honest I was feeling like I was making a huge deal out of it, and the estate agent was telling me I was overreacting as there are loads of estates like this!! I have been onto them and said that unless I have information regarding management company, I will be out!!


----------



## Leo (22 Nov 2018)

The estate agent only gets paid their commission when the house sells, so many of them will say whatever it takes to close the sale. Good luck with it.


----------



## Early Riser (22 Nov 2018)

Marie28 said:


> the estate agent was telling me............ there are loads of estates like this!!



This is fairly true I would say. Here is a list of estates not taken in charge from 2016. Some will have active MCs, some not :

https://www.housing.gov.ie/sites/de...e_of_residential_estates_-_initial_list_0.pdf..

This is a link to a Law Society Practice Note on this issue:

https://www.lawsociety.ie/Solicitor...onal-housing-both-existing-and-new-start-ups/


----------



## R3alEstate (25 Nov 2018)

Hi, I'm as well searching for an apartment to buy and looking at the list shared by Early Riser it's possible I'll find something in one of those with active MCs which have not been taken in charge. Is that a big deal? What's the problem with that? Sorry for the noob questions


----------



## JohnJay (25 Nov 2018)

R3alEstate said:


> Hi, I'm as well searching for an apartment to buy and looking at the list shared by Early Riser it's possible I'll find something in one of those with active MCs which have not been taken in charge. Is that a big deal? What's the problem with that? Sorry for the noob questions



Not being taken in charge by the council is not a problem as long as the development has an active and efficient management company. The MC will collect fees, pay the bills and build up a sinking fund (rainy day fund) for maintenance in the future. If there are a lot of apartments in the development then there is very little chance that the council will ever take it over. They usually only take over housing estates that were built to their spec. If its a gated development then they will never take it over.


----------



## R3alEstate (25 Nov 2018)

Thanks JohnJay I thought the MC should take over, instead it's the Council! At least I learned something 

Searching online I've found that based on the MUD Act it's not possible to sell/buy a property for which the developer hasn't passed the ownership to the MC, is that true?

I'll search for an estate with an active MC then.

Thanks,

Katrina


----------



## Early Riser (25 Nov 2018)

R3alEstate said:


> I'll search for an estate with an active MC then.



It is not as clear cut as this. It really depends on what you are looking at.There are hundreds, if not thousands, of older estates around the country which are not in charge and which do not have an MC. These are older "traditional" estates (no apartments, no gated entrance, etc - just ordinary houses). They are gradually being taken in charge by the Councils but it is likely to take many years for this to be completed. Houses change hands regularly.


----------



## R3alEstate (25 Nov 2018)

OK, I'm mainly searching for an apartment in a block, what would be the best way to search for it based on your experience? What should I look at? 

Is it true that if the developer didn't pass it to the MC it's not possible to sell it?

Thanks,

Katrina


----------



## Early Riser (25 Nov 2018)

As JohnJay said, if it is in an apartment block you are looking at it will never be taken in charge. No experience of it myself but I'd be looking for a well run MC.


----------



## R3alEstate (25 Nov 2018)

ok thanks everyone, to be honest I was searching on the forum and I've found this https://www.askaboutmoney.com/threads/management-company-refuses-to-repair-roof-leak.188778/page-2 which has scared me to death.

Not even a leak on the roof can be repaired by an owner even if they wanted. Let's imagine what could happen to the property with a leak in the roof. Even if I don't understand: shouldn't the block policy insurance cover that?

Pure madness!


----------



## JohnJay (25 Nov 2018)

Sorry if this is the wrong thread to voice this, but here goes:

I would be reluctant to buy an apartment or any property that was covered by a management company again after previous a previous experience, but if I had to I would do my homework on the MC before buying. My advice: 

- Have a look around at the general maintenance of the common areas/street lights/lifts/grounds/etc.
- Make sure you know the management charges for the apartment you are buying.
- See if you can find other owners in the development and ask them their opinion of the MC. Ideally find someone who has been at the MC's AGMs and find if there are any issues. 
- Find out how successful the MC is at collecting the managements charges and if there are many properties not paying anything. 
- Find out who the directors of the MC are. If it shares directors with the original developers of the development, then be careful. Ideally you should have some owner/occupiers who are directors.  
- Find out if the MC has a sinking fund. 
- Make sure the MC are holding AGM's and lodging their annual returns with the companies office. 
- Get your hands on a copy of their last return and see if its healthy. Get someone to have a look at this for you if you don't know what to look at yourself. 

There are a lot of very well ran MC's out there. 
But there are some damn awful ones too!


----------



## R3alEstate (26 Nov 2018)

Thanks John for your help.

I'll follow your advice.



JohnJay said:


> Sorry if this is the wrong thread to voice this, but here goes:
> 
> - Find out who the directors of the MC are. If it shares directors with the original developers of the development, then be careful. Ideally you should have some owner/occupiers who are directors.



why?

To be honest I'm not even sure that even if an MC is collecting fees today would be the same for the next 10 years, it's impossible to foresee and if at somepoint things get worse...

I'm imagining a situation where there is a leak in the roof, the insurance doesn't cover it, the management refuses to repair it because there is no money and I can't do it myself because the MC doesn't let me to, all this while paying the mortgage: this is a nightmare and unless I misunderstood you there is NOTHING I could do about it!

How they do even think of a system like this!

Thanks again,

Katrina


----------



## elcato (26 Nov 2018)

R3alEstate said:


> I'm imagining a situation where there is a leak in the roof, the insurance doesn't cover it, the management refuses to repair it because there is no money and I can't do it myself because the MC doesn't let me to, all this while paying the mortgage: this is a nightmare and unless I misunderstood you there is NOTHING I could do about it!
> 
> How they do even think of a system like this!


Katrina. I think you are really looking way too much into this. Back in the crash times people had bought silly places and didn't even consider management fees. This basically caused a lot of MC to be indebted and not get fees paid. Also dodgy builders were skipping regulation which didn't help. Things have changed now with a lot of actual sales gone through which forces any arrears to be paid up so in general they are in a healthy state. One bad case doesn't make all cases bad. As JohnJay's has posted above it should be enough for you to make a call on this. Btw I would add a check to see how many owner occupiers also - the more the better as they will like to actively keep the place looking good. As I stated in another thread, you will get a copy of the last financial year's statement and check out the debtors figure and a sinking fund. If the first is high and the second is low (without a valid reason) the avoid. But don't be put off. I have a place that needed 100k to fix the roof two or three years ago. This basically wiped out any sinking fund and got arrears because they suddenly need 5k a head to do the work. We still have a few on arrears but we do have a spanking new roof which shouldn't cause grief for a long while.


----------



## R3alEstate (26 Nov 2018)

thanks elcato your post helped a lot, I feel more confident. In this market is very difficult to keep paying rent but I can't afford an house either so I'm forced into buying an apartment.

Sorry to bother you so much but when the roof needed 100k to fix how did you ask for it? How could you convince the MC to collect the fees? Unless I misunderstood what happened

Thanks,

Katrina


----------



## elcato (26 Nov 2018)

R3alEstate said:


> Sorry to bother you so much but when the roof needed 100k to fix how did you ask for it? How could you convince the MC to collect the fees? Unless I misunderstood what happened


I didn't instruct them. The directors met up and decided this needed doing. They just instructed the management agent to co-ordinate payment from all the owners. The ratio of owner occupiers is quite high probably around 50% in the actual block so while we had a few moans people in general knew what had to be done. The directors called an EGM afaik. I accepeted it had to be done and ponied up. They put a payment plan in place for people who could not afford the lump sum.


----------



## R3alEstate (26 Nov 2018)

Thanks this really helped


----------



## Early Riser (3 Dec 2018)

Marie28 said:


> Thanks Leo, to be honest I was feeling like I was making a huge deal out of it, and the estate agent was telling me I was overreacting as there are loads of estates like this!! I have been onto them and said that unless I have information regarding management company, I will be out!!



Any updates, Marie ? What did you decide to do ?


----------



## R3alEstate (8 Dec 2018)

Hi Early Riser, sorry for the late reply, I was sick these days.

Still not sure, I'm trying to understand more and I'm stalling but super afraid to lose the apartment. Everyone I speak with say that I shouldn't worry to much about things like a leak in the roof because the OMC has to deal with it, but it's easy to say when you have your own house and don't leave in an apartment block.

My main fear to be honest is that if there is a leak in the roof (for example but any issue around common area), I can't touch it, they won't and I'd endup with a mortgage to pay and nowhere to leave, which will be my end!

Because no agent will answer my questions before to buy this or another apartment then I have no other choice than risk and hang myself if I'm unlucky.

Dramatic? Don't know, probably the laws should be changed around OMCs rather than asking purchasers to deal with problems bigger than them

Thanks again for your help,

Katrina


----------



## Leo (10 Dec 2018)

R3alEstate said:


> Everyone I speak with say that I shouldn't worry to much about things like a leak in the roof because the OMC has to deal with it



Just note in some cases it can take a battle to make that happen.


----------



## R3alEstate (10 Dec 2018)

That's really bad! In the meanwhile what happens? The house floods? Really don't have any more words


----------

