Management Company struck off - what now?

connundrum

Hi All,

Looking into this for a friend so any advice welcome.

Mgt Co formed in 2004, and filed annual returns as normal until 29/09/2006.

Nothing filed since, only a B1 annual return in Sept 2007.

According to vision-net and solo check, the mgt co is struck off due to no accounts being presented.

So what happens now? As far as I know - her and I presume the majority of her neighbours didn't have a clue that the company was struck off.

To my knowledge this will mean a couple of things in that, no one will be able to sell an apartment with the mgt co being struck off and it will cost members huge money to get the company reinstated.

What else is involved? Whats the best way to move from here?

The_Conductor

You will need to apply to the Companies Office to have the company re-instated. This may entail having to secure a High Court judgement. You need to contact a solicitor specialising in Companies Law at once. Unfortunately it may very well turn into an expensive task re-instating the Management Company. In theory you should not be able to buy-and-sell property in a complex with a dissolved Management Company- practice may prove differently.

bobbysands81

connundrum wrote: »

Hi All,

Looking into this for a friend so any advice welcome.

Mgt Co formed in 2004, and filed annual returns as normal until 29/09/2006.

Nothing filed since, only a B1 annual return in Sept 2007.

According to vision-net and solo check, the mgt co is struck off due to no accounts being presented.

So what happens now? As far as I know - her and I presume the majority of her neighbours didn't have a clue that the company was struck off.

To my knowledge this will mean a couple of things in that, no one will be able to sell an apartment with the mgt co being struck off and it will cost members huge money to get the company reinstated.

What else is involved? Whats the best way to move from here?

I'm afraid smccarrick is correct.

I would seek legal advice immediately.

As far as I recall your property is now "owned" by the Minister for Finance. I have heard of a Management Co going to the wall before, it had to be reinstated by a visit to the High Court. I remember the name of it but don't want to type it here.

connundrum

I was googling and trying to find something about it in brochure type form i.e. explaining what it means to be struck off and what should be done to rectify the problem.

I'll put together a pack with relevant info and give it to her to give to all owners. I can't believe that her neighbours appear to be so indifferent and unconcerned about it, but thats a separate issue I guess.

bobbysands81

connundrum wrote: »

I was googling and trying to find something about it in brochure type form i.e. explaining what it means to be struck off and what should be done to rectify the problem.

I'll put together a pack with relevant info and give it to her to give to all owners. I can't believe that her neighbours appear to be so indifferent and unconcerned about it, but thats a separate issue I guess.

They should be concerned cos at the moment they don't actually own their apartments anymore! If they want to sell them, they can't!

What happens if one of the apartments is being rented out and the tenant refuses to pay rent? The "landlord" has no comeback as he no longer owns the apartment.

If one of the units goes on fire, will the "owner" be able to claim off the insurance company?

Who will collect their bins etc... as there is no company to pay the bills.

Get them to seek independant legal advice immediately, I cannot stress this enough.

The Companies Registration Office would inform you whether or not the company has been struck off as the other companies get their info from there.

The Office of the Director of Corporate Enforcement might also be in a position to give you info... but they cannot advise, only your legal rep can do this.

The_Conductor

bobbysands81 wrote: »

They should be concerned cos at the moment they don't actually own their apartments anymore! If they want to sell them, they can't!

Correct.
They own a long-term lease from a company which no longer exists.......

markpb

Hi Connundrum,

I'm part of a group of apartment owners called the Apartment Owners Forum. I'm in the middle of writing an article for our website for people in your position with the help of people who've been through your problem. The article is here. It might help you get started although you'll definitely need to talk to a solicitor before you start.

Ste.phen

So what (ordinarily, i presume there's complications as it's property with leases) happens to the assets of a company that's struck off?

[edit] the link markpb posted seems to say that it becomes property of the state [/edit]

markpb

Igy wrote: »

So what (ordinarily, i presume there's complications as it's property with leases) happens to the assets of a company that's struck off?

They're transferred to the Minister for Finance but I've no idea what happens then. I presume they can be sold off at some stage.

Jo King

It is a matter of applying to the Court to re-instate the company. If it has been less than 12 months since the strike off the application is to the Circuit Court otherwise it is to the High Court. The written consent of the Companies Office, The Minister for Finance and the Revenues Commissioners must be sought. This will usually be contingent on filing outstanding returns and paying any taxes. Any member of the company can make the application. It is usual to involve solicitor and counsel. Legal fees will probably run to a few thousand euro.

connundrum

markpb wrote: »

Hi Connundrum,

I'm part of a group of apartment owners called the Apartment Owners Forum. I'm in the middle of writing an article for our website for people in your position with the help of people who've been through your problem. The article is here. It might help you get started although you'll definitely need to talk to a solicitor before you start.

Sweet, the article is exactly what I was looking for. Would you mind if I printed this off and distributed it to the owners in the estate? (I'll credit the website as the author as usual)

I think we'll have to present all owners with as much info as possible asap, as they will have to understand that they each will have to stump up funds towards the legal cost of reinstating the company.

markpb

connundrum wrote: »

Sweet, the article is exactly what I was looking for. Would you mind if I printed this off and distributed it to the owners in the estate? (I'll credit the website as the author as usual)

I think we'll have to present all owners with as much info as possible asap, as they will have to understand that they each will have to stump up funds towards the legal cost of reinstating the company.

Of course. If you can update the article when you make it to safe side of the High Court, that'd be cool.

RoryW

see articles on http://www.odce.ie/en/media_consultation_notices_article.aspx?article=9cda07b9-ef8a-4860-a040-78e82847feb6

hey in theory could the management company VAT number be used to buy the residents everything they are buying? claim the vat back in a devious and possibly illegal way to recoup costs?

Is there a loophole here - people using the VAT no when making normal purchases?

Victor

connundrum wrote: »

According to vision-net and solo check, the mgt co is struck off due to no accounts being presented.

Get it from the horse's mouth www.cro.ie/search

Deleted User wrote: »

hey in theory could the management company VAT number be used to buy the residents everything they are buying? claim the vat back in a devious and possibly illegal way to recoup costs? Is there a loophole here - people using the VAT no when making normal purchases?

Sure, you can also go into banks and take their money and not have to pay it back. :rollleyes:

The revenue look at the returns made by traders and build up profiles for different operations - yours would stick out rather badly.

connundrum

Just got an update this morning to say that the Mgt Co is dissolved... what does this mean on an average day?

I presume being 'struck off' is an interim measure, and being dissolved is the final act?

bobbysands81

connundrum wrote: »

Just got an update this morning to say that the Mgt Co is dissolved... what does this mean on an average day?

I presume being 'struck off' is an interim measure, and being dissolved is the final act?

Seek legal advice immediately but it sounds like none of the people in the estate own their apartment anymore.

They all need to get together and sort this out mate, fair play to you for trying to kick start it but get onto a solicitor immediately.

sickpuppy32

Do the same issues apply when the it is the management company for a "normal" non apartment housing estate?

Paulw

sickpuppy32 wrote: »

Do the same issues apply when the it is the management company for a "normal" non apartment housing estate?

Yes, in general, but a lot will depend on the deeds and company articles of association.

sickpuppy32

deeds just make reference to a management scheme. we already have one int he sense the residents association organizes getting the grass cut. The management company still charges us for grass cutting even thought they never did it

Paulw

Management scheme, or a legally formed management company? A management company would have been a requirement by the planning authority.

The management company would have elected directors, an AGM held each year, accounts and budget voted on each year at the AGM, etc. The directors are also accountable to the unit owners who are members of the management company.

Grolschevik

Paulw wrote: »

Management scheme, or a legally formed management company? A management company would have been a requirement by the planning authority.

The management company would have elected directors, an AGM held each year, accounts and budget voted on each year at the AGM, etc. The directors are also accountable to the unit owners who are members of the management company.

sickpuppy32 wrote: »

The management company still charges us for grass cutting even thought they never did it

Or management agent?

Lantus

connundrum wrote: »

Hi All,

Looking into this for a friend so any advice welcome.

Mgt Co formed in 2004, and filed annual returns as normal until 29/09/2006.

Nothing filed since, only a B1 annual return in Sept 2007.

According to vision-net and solo check, the mgt co is struck off due to no accounts being presented.

So what happens now? As far as I know - her and I presume the majority of her neighbours didn't have a clue that the company was struck off.

To my knowledge this will mean a couple of things in that, no one will be able to sell an apartment with the mgt co being struck off and it will cost members huge money to get the company reinstated.

What else is involved? Whats the best way to move from here?

read section 30 of the MUD act, within 6 years of being listed as struck off it can be restored by an application to the high court and continue as if it had never been struck off.

If accounts were filed 2007 it should still be possible. You may not need a full legal team to do this. Just some gutsy attitude and a lot of ringing around and asking questions. It is meant to be relatively easy to re-instate, that is the point of the legislation.

The future.....

read up and get involved in your omc. You need it to sell your house and ensure the best values are achieved in terms of upkeep of the common areas. People need to be made aware of this. If they wait to find out the company is dissolved when they come to sell it may take 2 years or more to resolve all of the issues and at severe cost to everyone including you.

There are some great resources out there to get you started.

sickpuppy32

Lantus wrote: »

read section 30 of the MUD act, within 6 years of being listed as struck off it can be restored by an application to the high court and continue as if it had never been struck off.

If accounts were filed 2007 it should still be possible. You may not need a full legal team to do this. Just some gutsy attitude and a lot of ringing around and asking questions. It is meant to be relatively easy to re-instate, that is the point of the legislation.

The future.....

read up and get involved in your omc. You need it to sell your house and ensure the best values are achieved in terms of upkeep of the common areas. People need to be made aware of this. If they wait to find out the company is dissolved when they come to sell it may take 2 years or more to resolve all of the issues and at severe cost to everyone including you.

There are some great resources out there to get you started.

Our residents association is well able to cut the grass for a lot less money - 40 euro compared to the 250 been charged by the management company - i should also add the management company and its management agent are been investigated by the gardai for fraud. Our original plan was to take over the management company, appoint our own directors and then fold up the company. We're hoping now, the job has been done for us.

The_Conductor

sickpuppy32 wrote: »

Our residents association is well able to cut the grass for a lot less money - 40 euro compared to the 250 been charged by the management company - i should also add the management company and its management agent are been investigated by the gardai for fraud. Our original plan was to take over the management company, appoint our own directors and then fold up the company. We're hoping now, the job has been done for us.

If its a legally constituted Management Company- and the property is vested in the company (as is normally the case), if the Management Company is struck off- the property reverts to being the property of the Minister for Finance- not the shareholders of the company. You need to be very very careful about how you approach it. Allowing the company to fold- may not be in your best interests........

sickpuppy32

i dont understand what you mean by if the property is "vested" in the company, surely i (and the bank) own my house.

Paulw

sickpuppy32 wrote: »

i dont understand what you mean by if the property is "vested" in the company, surely i (and the bank) own my house.

Do you not know for sure? Did you not read all the contracts and documents at time of purchase? Is your property freehold or leasehold?

In most managed developments, the property is vested in the management company, and you have a leasehold on your property. So, you effectively have a 999 year (or whatever) lease.

You need to talk to a solicitor about the real impact of the management company. You also need to read your contracts and also the articles of the management company.

Lantus

sickpuppy32 wrote: »

Our residents association is well able to cut the grass for a lot less money - 40 euro compared to the 250 been charged by the management company - i should also add the management company and its management agent are been investigated by the gardai for fraud. Our original plan was to take over the management company, appoint our own directors and then fold up the company. We're hoping now, the job has been done for us.

This is a great idea as everyone loves sticking it to the man but in practice may be (and almost certainly will be) a disaster.

Can you give any details of your development? houses, apartment and shops? or just one of these or a mix of 2? approx number of units and unique things like scure gated entrance or the like.

The Owners management company (OMC) is tied into the lease contract documents for every house. Technically if there are issues with the company most solicitors would advise buyers against the purchase.

IF you are an apartment then you dont own your property. You own the internal layer of plasterboard. The OMC owns the walls, roof and floor of the block and your apartment. You get a 999 year lease for right of access.

The inherent problem with a residents association is that it is voluntary in terms of finacial contribution. So when people get wise that they can opt out and the grass still gets cuts others may try to get cute as well and it leads to pressure and stress.

A service fee is a legally required payment and you cannot opt out. EVERYONE makes a small conribution because everyone signed a lease document saying they would.

Agents are expensive because you are paying their wages and the wages of contractors. We have reduced our costs by almost 2/3 by becoming directors and organising the work ourselves. We get 3 competative tenders for any specialist work and dont just appoint our friends.

There is often more than just grass cuttng that you may not be aware of. Block Buildings insurance??

sickpuppy32

Paulw wrote: »

Do you not know for sure? Did you not read all the contracts and documents at time of purchase? Is your property freehold or leasehold?

In most managed developments, the property is vested in the management company, and you have a leasehold on your property. So, you effectively have a 999 year (or whatever) lease.

You need to talk to a solicitor about the real impact of the management company. You also need to read your contracts and also the articles of the management company.

Its a freehold not a leasehold

sickpuppy32

Lantus wrote: »

This is a great idea as everyone loves sticking it to the man but in practice may be (and almost certainly will be) a disaster.

we've been doing it successfully for two years now with increased participation by residents, we have clean up days , family days, its given the residents a real sense of community

Lantus wrote: »

Can you give any details of your development? houses, apartment and shops? or just one of these or a mix of 2? approx number of units and unique things like scure gated entrance or the like.

Its just houses, 250 of them

Lantus wrote: »

A service fee is a legally required payment and you cannot opt out. EVERYONE makes a small conribution because everyone signed a lease document saying they would.

We queried the service fee and found they were overcharging - the directors of the management company (who are also the developers) and its management agent are currently been investigated by the gardai for fraud. Until this matter is sorted out and we get accurate bill, we all refused to pay. I somehow doubt i'm legally obliged to be defrauded.

Lantus wrote: »

There is often more than just grass cuttng that you may not be aware of. Block Buildings insurance??

don't need block insurance cause we're houses not apartments. The developer still owns the common area and him and his receiver are responsible for road maintenance, lights,insurance, sewers etc - i have this in writing from them. Technically they are also responsible for cutting the grass but practicallity means we do it

Paulw

sickpuppy32 wrote: »

We queried the service fee and found they were overcharging - the directors of the management company (who are also the developers) and its management agent are currently been investigated by the gardai for fraud. Until this matter is sorted out and we get accurate bill, we all refused to pay.

But, at your management company AGM each year, do you not elect directors? Do you not vote on your budget? Do you not go through the management company independently audited accounts?