Vendor's company changing name

anonymus1268

Hi, I would need some advice. I have a sale agreed on a house, which is still owned by the constructor. We were very close to sign everything, but now my solicitor says that it is going to take a while because the vendor has changed the name of the company!
Is this normal?
In what ways can this affect me and the amounts I have already paid as deposit?
Would you say that it is only an administrative issue or can it have more hidden consequences for me?
I will appreciate any comment on this.

D3PO

hmm sounds like the builder is doing something dodgy to avoid debts. Regarding how will it impact you your solicitor should be answering this.

To be honest though it would raise alarm bells to me. Id probably be looking to pull out of the sale quick smart

The_Conductor

Revenue call these 'Phoenix Companies'- aka burning one company for another to arise from the ashes of the initial/original company often claiming to own the assets of the original company.

Proceed with extreme caution.

Revenue are wise to these shenanigans, and do not look kindly on them. Its entirely plausible that the directors/owners could end up in court either at the instigation of Revenue- or even more likely the CRO.

Shenanigans like this used be considered part of every day life in the heady days of the Celtic Tiger- not anymore- and if you get involved in them- consider yourself in for the long haul.

anonymus1268

Thanks for your answers.
So talking about the consequences for me, how can this affect my purchase? Is it only that it is going to take longer than a regurlar purchase?
I am thinking about the deposit I have already paid, a 10% of the purchase value, is this amount in danger of being lost?

D3PO

like ive already said speak to your solicitor. If I were you I would be instructing him that you want to pull out of the sale.

As for your 10% deposit he/she will tell you the situation. Depends what you have signed so far. There really is no point in asking on here you need to chat to your solicitor urgently.

the_syco

adagaladriel wrote: »

I am thinking about the deposit I have already paid, a 10% of the purchase value, is this amount in danger of being lost?

Ask your solicitor to look into a way of getting it back. From reading The_Conductors post, it would seem that even if you do buy the house, you may end up not owning the house, and the money may disappear along with the company if it changes its name again?

anonymus1268

Well, my solicitor has advised that if they find anything strange, they will recommend to pull out of the sale, but they seem quite relaxed with all this.
They think it will take around a month to be back to normal.
I have been advised to put some pressure on the vendor, as asking for a specific deadline, and if that is not acomplished to reduce the selling price per weeks, or something like that.
What do you think of this? Is it normal practice for negotiate?

the_syco

adagaladriel wrote: »

Well, my solicitor has advised that if they find anything strange, they will recommend to pull out of the sale, but they seem quite relaxed with all this.

Maybe get another legal opinion, one which doesn't stand to gain from the purchase of the house.

ABEasy

Nothing wrong at all in changing the name of a company. The advice the op received in the first few posts is way off the mark. There would be no way this is a Phoenix type situation as the asset being sold would have registered title, the bank/receiver/liquidator of the old company would not consent to transfer of title if a Phoenix type situation was occurring. Your solicitors are correct in proceeding with caution, a company name change is a regular and simple thing to do, search the cro website, all that is required to change the name of a company is a special resolution at a general meeting!

mathepac

First off OP, the term "Sale Agreed" is a meaningless one, as in the absence of contracts, nothing is agreed. It's an EA invention to show how busy / diligent / effective / efficient they are

Secondly, please don't say you have given a 10% deposit to a builder. I have nothing against builders, but at the stage you're at (pre-contract) the normal thing to do is to give a few grand, 5 or 10, to an estate agent and get a "contract / no contract" receipt for your 100% refundable deposit.

Thirdly the "10% of purchase price less EA deposit" is paid to your solicitor and held there pending signing and exchange of contracts.

Normally the balance is payable, again via your solicitor, on completion.

I'm not sure who is advising you, but the change of company scenario is a cause for concern to me and the steps above are designed to protect a purchaser in the circumstances you describe.

ABEasy

mathepac wrote: »

I'm not sure who is advising you, but the change of company scenario is a cause for concern to me and the steps above are designed to protect a purchaser in the circumstances you describe.

Just to point out, the op has made no mention of a change of company, he has stated that the company is changing its name, which is a totally different senario. The legal entity remains the same, it's just got a different name, akin to a woman marrying & taking her husbands surname, she's the same legal entity, just has a different name!

P. Breathnach

ABEasy wrote: »

Just to point out, the op has made no mention of a change of company, he has stated that the company is changing its name, which is a totally different senario. The legal entity remains the same, it's just got a different name, akin to a woman marrying & taking her husbands surname, she's the same legal entity, just has a different name!

If is is simply a change of name, then I would agree that there is no great problem.

But I think OP needs to get clarification. The first post said that the house "is still owned by the constructor" before going on to the change of name question. It is possible that there are three parties on the vendor's side: an individual builder and two companies owned by that builder. That sort of complexity does not necessarily mean that there is anything dodgy going on, but the possibility exists.

OP should not be satisfied with bland reassurances from his/her solicitor, but should ask direct questions, most particularly whether it is a change of name or a change of vendor. If I was making a six-figure deal with Joe, and suddenly I was told I was actually dealing with Tom, I'd be asking challenging questions.

anonymus1268

Thanks for all your answers, seeing different points of view and opinios is useful for me.
And I must say, as non-Irish, all the legal process in buying a house is not familiar to me, so sometimes I can express myself in wrong terms. But the solicitor is following all legal steps.
Now I need to wait until Monday to get some responses from solicitor.
Thanks again.

Victor

Get your solicitor to look at an enhanced guarantee on the construction - a guarantee that is backed by the like of an insurance company, not one only backed by the vendor's non-existent assets.