Buying apt. mgt co has been struck off & reinstated. I may be liable for extra fees!

I am in the process of buying an apartment.

Unfortunately the original builder, who was on the management committee, never handed over the common areas 10 years ago, swindled the residents' management fees and didn't file the accounts into the Companies Registration Office.

The management company had to be struck off and reinstated.

All this had been going on over the past 6 or 7 months which delayed the sale of the apartment.

Now things are back on track and I am due to close soon.

However my solicitor mentioned that the management company may expect me to contribute towards the cost of reinstating the management company, legal fees etc, even though it's nothing got to do with me, I am not even living there yet! My solicitor says they have a few thousand in the bank so they probably wont ask me, but I am very worried.

If they have money in the bank it is probably the sinking fund and they are talking about getting some major refurbishments done.

Surely I can just refuse to pay anything more than my agreed management fee ?!!

Re: Buying apt. mgt co has been struck off & reinstated. I may be liable for extra fe

Marcia said:

If they have money in the bank it is probably the sinking fund and they are talking about getting some major refurbishments done.

Surely I can just refuse to pay anything more than my agreed management fee ?!!

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When you buy the apartment you will be a member of the management company and liable for your share of the costs incurred by the management company. I am not sure what you mean by 'agreed management fee', a budget is approved at the start of the year and they try to stick to that. In the case of your development that may include a bill from an accountant or solicitor relating to the previous problems. That bill may not arise for a few months. In an ideal world that should have all been budgeted for and the funds collected.

You are buying in to a development that you know has had problems, if it was me I would be asking lots of questions regarding the state of the finances of the management company, especially any deferred or outstanding debts. It is also important to know whether any work on the development was deferred pending the resolution of the company status. It might be that next year there is a lot of work to be done and will require a high management fee to be paid by each of the owners.

Re: Buying apt. mgt co has been struck off & reinstated. I may be liable for extra fe

Know of a similar issue where the mgt co had been struck off, it took over a year nearly 2 to get it back on track and there was interest needed to be paid as it had been struck off and no accounts sent in to thhe CRO for several years. When the oweners were selling they had an amount held back approximately 2k to help cover the re-enstatement costs if they fell back on the owners. Fortunetely the bills were paid (CRO interest and all). Make sure as owners you have a solicitor to represent you.
You still need to contribute to day to day running costs - bins, garden, light block insurance. this won't happen without finance.