Apartment has Management Committee rather than Management Company

[weallpartied]

Hi,
I am looking to purchase a place to live and have found a decent apartment in a small complex which was built in the 70s, the location is good, price within my budget, gounds well maintained. So I placed an offer the contract has been sent to my solicitor.

However the solicitors has flagged a major concern which is unlike apartment blocks of today this apartment only has a management committee rather than a management company. The leasehold on the apartment makes me liable for the walls and foundations. The management committee cannot force any resident to pay into the committee for the upkeep of the grounds. All owners bar one are paying into the fund, he has 10 years of arrears! An RTB search shows that only one apartment is rented out and that owner is paying into the fund as well.

The building is insured by the committee and there is a sinking fund that the residents pay into as well. I have had a proper survey carried out with no major issues highlighted or found

My solicitors concerns, which I share myself, is that more residents in time could 'opt out' of paying leaving a smaller subset with a higher bill while they all get the benefit.

Has anyone got any experience of a situation like this?

 

[elcato]

My solicitors concerns, which I share myself, is that more residents in time could 'opt out' of paying leaving a smaller subset with a higher bill while they all get the benefit.

In fairness, you could say that about all managed developments. It sounds like the grounds upkeep is all you get for the annual fee or is there bins, hall, stairs and landing light, cleaning involved ?

 

[Bilbo1]

In fairness, you could say that about all managed developments. It sounds like the grounds upkeep is all you get for the annual fee or is there bins, hall, stairs and landing light, cleaning involved ?

There is always a percentage of people that won't pay. In a good development it would be a small percentage. Our solicitor was of the view that everyone pays in the end (they either die or sell the place).

My concern would be about you being individually liable for the envelope and foundations of the building. Does that mean apartments in the last floor are responsible for the roof?
Is there an agent managing the moneys going in and out?
Maybe somebody here knows whether there is a legal requirement to set up an OMC?
(Citizens information -> search for 'Management companies for apartment blocks')

 

[odyssey06]

There is always a percentage of people that won't pay. In a good development it would be a small percentage. Our solicitor was of the view that everyone pays in the end (they either die or sell the place).

Is it the case in this situation e.g. "The management committee cannot force any resident to pay into the committee for the upkeep of the grounds"
Not clear if they would be able to establish a claim for the arrears on sale of that property?

OP, also what is the block insurance situation?

 

[elcato]

I think we are agreed that we need more info here.

 

[weallpartied]

In fairness, you could say that about all managed developments. It sounds like the grounds upkeep is all you get for the annual fee or is there bins, hall, stairs and landing light, cleaning involved ?

Each unit has its own door so there is no common area for upkeep bar the grounds and the surface car park.
From the management committee accounts what has been charged out is
Gardening
External Maintainence
Electricity
Insurance
Bank fees
And the account operates in a surplus, there is also a separate sinking fund

There is always a percentage of people that won't pay. In a good development it would be a small percentage. Our solicitor was of the view that everyone pays in the end (they either die or sell the place).

My concern would be about you being individually liable for the envelope and foundations of the building. Does that mean apartments in the last floor are responsible for the roof?
Is there an agent managing the moneys going in and out?
Maybe somebody here knows whether there is a legal requirement to set up an OMC?
(Citizens information -> search for 'Management companies for apartment blocks')

The committee are managing the money and organising the works and insurance themselves
The committee and block predate the MUD Act 2011 so I dont think there is a requirement for OMCs for developments before that date
On the basis of the free hold document I am responsibile for the walls and foundations and the apartment above me is responsible for their walls and roof, though it seems the management committee uses a portion of the service charge to maintain the external building
There are 8 units in the development, only one not paying and that unit is empty at the moment

Is it the case in this situation e.g. "The management committee cannot force any resident to pay into the committee for the upkeep of the grounds"
Not clear if they would be able to establish a claim for the arrears on sale of that property?

OP, also what is the block insurance situation?

The committee cannot establish a claim on the arrears, so the hold out could sell up and the committee cannot prevent this.

The committee has an insurance policy on the block and looking at the policy all contingenices are in force so it seems fully covered in terms of the amount covered for the building and the public liability

I really appreciate the comments and if you have any more they would be appricated as well

 

[odyssey06]

I think the setup would be a red flag to myself and I imagine many other purchasers.
8 is a very small number of units to be carrying 'bad apples' in such an informal manner.
Already carrying one bad apple, imagine you picked up another one even worse e.g. a disinterested landlord with anti-social tenants.
In such scenarios a strong management company is beneficial.