Inactive Management Company

Marie28

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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

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

Palerider

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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

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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

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

JohnJay

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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

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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

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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

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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

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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

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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/default/files/publications/files/initiative_to_accelerate_taking_in_charge_of_residential_estates_-_initial_list_0.pdf..

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

https://www.lawsociety.ie/Solicitors/Practising/Practice-Notes/Application-of-Multi-Unit-Developments-Act-2011-to-conventional-housing-both-existing-and-new-start-ups/
 
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R3alEstate

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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

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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

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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

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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

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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

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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

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Last edited:

JohnJay

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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

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Thanks John for your help.

I'll follow your advice.

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
 
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