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Estate Management Company - What Happens If It Fails?

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    #32
    Lantus
    Registered Users Posts: 3,027 ✭✭✭Lantus


    mathepac wrote: »
    AN ACT TO MAKE PROVISION FOR THE VESTING AND MANAGEMENT OF, AND TO CONTROL THE ALIENATION OF, CERTAIN LAND AND OTHER PROPERTY BELONGING TO THE STATE AND TO MAKE PROVISION FOR OTHER MATTERS RELATING TO STATE PROPERTY AND STATE AUTHORITIES.

    I wonder if you have all suddenly taken leave of your collective senses. An outbreak of Anticipatory Heatwave Madness aka AHEM?

    Multi-unit developments on private land and State land or property - what's the connection? Surely the MUD Act 2011 and the Campanies Act 1963 are the relevant bits of legislation for this discussion? IANAL

    OP, did you take any active part in the OMC prior to its entry into corporate limbo?

    Agreed, all the legal chatter is not constructive as it doesn't offer any real advice.

    The OP needs to grasp the nettle and get his company which he is a member of up and running again and directors put in place that will run it for the long term for the benefit of all. Get together with the other residents and talk and arrange a meeting and get a plan together.

    If the members of the company dont feel they want or need such a device then some educating will be required and expalining. Possibly a leaflet or letter to all explaining that no property can be bought or sold and the cost of restoring a company via the high court which can be in the 6 to 10k region. Not to mention how the residents intend to run the estate and look after it long term.

    An estate made up of houses can be relatilvley cheap subject to economies of scale. They could purchase their own equipment for green areas for example.


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    #33
    Bluegrass1
    Banned (with Prison Access) Posts: 97 ✭✭Bluegrass1


    mathepac wrote: »
    Multi-unit developments on private land and State land or property - what's the connection? Surely the MUD Act 2011 and the Campanies Act 1963 are the relevant bits of legislation for this discussion? IANAL

    The key issue is private land. All land has to have an owner. Either a natural person i.e. a human or an artificial person i.e a company. When a person dies (a natural one) or is dissolved (an artificial one) the property must pass to someone. In the case of a company which cannot make a will or have heirs the assets pass to the state. It happens to management companies in Ireland quite frequently. It is an expensive hassle for owners of apartments to rectify.


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    #34
    Lantus
    Registered Users Posts: 3,027 ✭✭✭Lantus


    Bluegrass1 wrote: »
    The key issue is private land. All land has to have an owner. Either a natural person i.e. a human or an artificial person i.e a company. When a person dies (a natural one) or is dissolved (an artificial one) the property must pass to someone. In the case of a company which cannot make a will or have heirs the assets pass to the state. It happens to management companies in Ireland quite frequently. It is an expensive hassle for owners of apartments to rectify.

    Expensive but a lot easier thanks to the MUD act. Any OMC that has been struck off can be re-instated 6 yeas after this happening through the high court. But yes, its an expensive problem.

    There are huge number of developments in Ireland that use management companies and the failure to manage these and run them properly is going to be the next gigantic problem coming down the line for home and apartment owners. As in the OP's case its already starting to hit home.

    OMC's require a good deal of education on the part of each member to fully understand what it is and why its there. Something they probably had zero idea even existed when we all went out in a rush to buy buy buy.

    The consumer show raised the issue a little while ago but there really needs to be a national push/awareness so everyone in these estates is given some support and can be given the tools and knowledge they need.


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    #35
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    In brief-

    If the management company is dissolved- its assets become vested in the Minister for Finance. You may petition the Minister to have the company re-instated, and its previous assets ascribed to it- it is a timely process and damn expensive. Under the MUD act- you can wait 6 years, and petition the high court instead- easier and cheaper- but no less time consuming.

    With respect of the two Directors stepping down- the company is in breach of company law, and regardless of what you do- liable to be sanctioned for this breach, come what may (what would normally happen if the company continued trading prior to the directors stepping down, while insolvent, is the directors would be proscribed from becoming directors for a number of years (or permanently) and they in turn would most probably take action against those who put them in that position (as has happened twice in the past year).

    OP- If you could clarify whether you have freehold or leasehold of the house in the estate, it would clarify matters greatly. If the management company is struck-off and you have leasehold rather than freehold rights- you cannot sell the property- as the beneficial owner would then be the Minister for Finance. If, on the other hand- only the common areas are ascribed to the Management Company- its a different story- you'll have problems, yes, but not nearly to the extent that you'd have if its a leasehold on the house itself.


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    #36
    Mrs OBumble
    Registered Users Posts: 25,966 ✭✭✭✭Mrs OBumble


    Lantus wrote: »
    ... Possibly a leaflet or letter to all explaining that no property can be bought or sold

    Is the problem that no property can be bought or sold, or just that no prospective buyer can get a mortgage from a bank?

    If the price is low enough, it's usually possible to find a buyer who doesn't need to borrow from an official source ...


    The_Conductor wrote: »
    OP- If you could clarify whether you have freehold or leasehold of the house in the estate, it would clarify matters greatly.

    This. There is no way that the same legal structure applies to every estate / complex in the country. I don't see how much advice can have been given on this thread without having a lot more information about the specific legal / ownership status of the property.


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    #37
    Bluegrass1
    Banned (with Prison Access) Posts: 97 ✭✭Bluegrass1


    Mrs OBumble wrote: »
    Is the problem that no property can be bought or sold, or just that no prospective buyer can get a mortgage from a bank?

    If the price is low enough, it's usually possible to find a buyer who doesn't need to borrow from an official source ...

    An apartment is sold by way of the assignment of the lease. The buyer takes over from the holder of the lease and assumes all rights and liabilities under the lease. In a case where the OMC has been dissolved the Minister for Finance is the landlord. The minister will refuse to do anything with the property. Leases invariably contain a clause that an assignment is subject to the consent of the landlord.
    A purchaser will want to see the written consent of the landlord to the assignment and confirmation that there has been no breach of covenant by the vendor. Nobody wants to buy and get a bill for unpaid service charges and be forced to undo other breaches of the lease such as re-instate walls, remove a satellite dish etc.
    The discount needed to take an assignment in circumstances where a management company had been dissolved would be substantial.


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    #38
    Bluegrass1
    Banned (with Prison Access) Posts: 97 ✭✭Bluegrass1


    The_Conductor wrote: »
    In brief-

    If the management company is dissolved- its assets become vested in the Minister for Finance. You may petition the Minister to have the company re-instated, and its previous assets ascribed to it- it is a timely process and damn expensive. Under the MUD act- you can wait 6 years, and petition the high court instead- easier and cheaper- but no less time consuming.

    The normal procedure to restore a company is to request the Registrar of Companies to do it within one year of strike off. The MUDS ACT extends this from 1 year to six years.
    Outside of those times but before 20 years application must be made to the High Court showing the consent of the Minister for Finance, the Revenue Commissioners and the Minister for Enterprise and Employment. This is much more expensive that applying to the Registrar. All outstanding returns must be filed which in itself can be expensive as penalties for late filing have to be paid.


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    #39
    Domo40plus
    Registered Users Posts: 16 ✭Domo40plus


    Constitution 43.1.2
    The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.


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    #40
    Domo40plus
    Registered Users Posts: 16 ✭Domo40plus


    40.6.1.iii
    The right of the citizens to form associations and unions.
    Laws, however, may be enacted for the regulation and control in the public interest of the exercise of the foregoing right

    Here the right also applies if you don’t want to be a part of a union or association. So my thoughts are here above all other articles, that I should have the right to purchase my home and not be forced to join an association or company. This right has been tested and won before in the following cases.
    Educational Company v Fitzpatrick [1961] IR 345 and
    Meskell v CIE [1973] I.R. 121


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    #41
    Domo40plus
    Registered Users Posts: 16 ✭Domo40plus


    40.6.1.iii
    The right of the citizens to form associations and unions.
    Laws, however, may be enacted for the regulation and control in the public interest of the exercise of the foregoing right

    Here the right also applies if you don’t want to be a part of a union or association. So my thoughts are here above all other articles, that I should have the right to purchase my home and not be forced to join an association or company. This right has been tested and won before in the following cases.
    Educational Company v Fitzpatrick [1961] IR 345 and
    Meskell v CIE [1973] I.R. 121

    If you live in a stand alone house that is freehold and you are in a managed estate your constitutional rights have been overlooked when you were forced to sign a covenant or agreement.


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    #42
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    Domo40plus wrote: »
    Here the right also applies if you don’t want to be a part of a union or association. So my thoughts are here above all other articles, that I should have the right to purchase my home and not be forced to join an association or company. .

    You are not joining an association nor a union. You are becoming a member/shareholder of a Ltd company.

    You are not forced. It is totally your choice if you buy the property or not.

    There are large legal differences between a union/association and being a member/shareholder of a Ltd company.


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    #43
    Domo40plus
    Registered Users Posts: 16 ✭Domo40plus


    Hi Paulw, I my case I was forced and in a lot of other places you are forced as you can't sign for the house unless you agree to join the company. I had moved out of my house and no where was it stated that this was a managed estate or that I had to pay fees. I was moving from Dublin to Meath. So it was only at the time of signing that I found out this problem. Yes, I could have pulled out but what happens to my family and what happens to the money invested already in the property??
    In relation to the company - are you saying that once you join you can never leave??? Does that not diminish your rights??


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    #44
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    Domo40plus wrote: »
    So it was only at the time of signing that I found out this problem. Yes, I could have pulled out but what happens to my family and what happens to the money invested already in the property??
    In relation to the company - are you saying that once you join you can never leave??? Does that not diminish your rights??

    If you only found out at the time of signing then you should have some stern words with your solicitor. You also didn't do much research on where you were buying.

    Deminish what rights? Of course you can't leave the management company, unless you sell up your property.

    You buy a property in a managed development, then you become a member of the management company, and the contracts you sign give all the legal requirements on both you and the management company.


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    #45
    Lantus
    Registered Users Posts: 3,027 ✭✭✭Lantus


    Bluegrass1 wrote: »
    The normal procedure to restore a company is to request the Registrar of Companies to do it within one year of strike off. The MUDS ACT extends this from 1 year to six years.
    Outside of those times but before 20 years application must be made to the High Court showing the consent of the Minister for Finance, the Revenue Commissioners and the Minister for Enterprise and Employment. This is much more expensive that applying to the Registrar. All outstanding returns must be filed which in itself can be expensive as penalties for late filing have to be paid.

    Bear in mind that the 'quick' restoration procedure via CRO only applies IF the transfer of common areas has fully completed. For a lot of estates where the builder never did this its a high court process still (circa 10-15k.)


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