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Property purchase - apartment but no management company

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  • 08-05-2014 9:44am
    #1
    lk01
    Registered Users Posts: 2 ✭


    Hello

    Can anyone please advise me as to the pitfalls of buying an apartment which has no management company?

    Property was sale agreed to someone but their lender wont agree to mortgage. So the auctioneer tells me cash buyer is needed.

    Location and price are excellent. The property is for rental purposes. I presume no issues with insurance and bins? I dont expect to sell it again for a very long time, so no short term resale issues.

    Any advise much appreciated.

    thanks


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    #2
    L1011
    Registered Users Posts: 68,890 ✭✭✭✭L1011


    Long-term maintenance issues are inevitable if there is no management firm; also depending how the title is the property may be unsaleable at all as they may not be able to transfer the lease to you.

    Run, don't walk, away from this. There's a damn good reason the banks are refusing.


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    #3
    the_syco
    Registered Users Posts: 37,301 ✭✭✭✭the_syco


    MYOB wrote: »
    Long-term maintenance issues are inevitable if there is no management firm; also depending how the title is the property may be unsaleable at all as they may not be able to transfer the lease to you.

    Run, don't walk, away from this. There's a damn good reason the banks are refusing.
    Agree with the above.

    Also, I'm sure you got the apartment checked out, but what about the rest of the building? Did you check out the apartment above you? Or how about the roof? Should the roof get damaged, there's no management company to fix it, and as we're talking about a possible bill of thousands... you may be left with a large wet hole in your roof.

    "Cash only" often means "we don't want the standard checks done". IE; they know they're selling you a lemon.


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    #4
    emeldc
    Registered Users Posts: 2,597 ✭✭✭emeldc


    The OP is the seller not the buyer, if I'm reading it right.


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    #5
    skelligs
    Closed Accounts Posts: 196 ✭✭skelligs


    Very strange that an apartment block does not have a management company - who insures the communal areas? who cleans the communal areas? on what basis is insurance for the building done?

    Maybe see if there are any owner occupiers in any of the other apartments and ask a few questions?


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    #6
    emeldc
    Registered Users Posts: 2,597 ✭✭✭emeldc


    skelligs wrote: »
    Very strange that an apartment block does not have a management company - who insures the communal areas? who cleans the communal areas? on what basis is insurance for the building done?

    Maybe see if there are any owner occupiers in any of the other apartments and ask a few questions?

    They go bust because the residents don't pay the management fees. Not particularly common, but it happens.


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    #7
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    The situation becomes a legal minefield. The management company owns the building, and lets the individual units on long leases to the holders of the individual units. If the management company ceases to exist, there is no ultimate owner - just people who occupy the units.

    I'm in the market for an apartment. I would have very strong reservations about buying where a management company was in poor shape. I wouldn't spend more than 5 seconds considering a proposition where the management company was defunct. If I were foolish enough to give it a thought, my solicitor would take a strong position, and I suspect that she would refuse to act for me.


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    #8
    dudara
    Registered Users Posts: 33,518 ✭✭✭✭dudara


    Moved to Accommodation & Property

    dudara


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    #9
    the_syco
    Registered Users Posts: 37,301 ✭✭✭✭the_syco


    emeldc wrote: »
    The OP is the seller not the buyer, if I'm reading it right.
    I'm not sure either way.

    From
    lk01 wrote: »
    I dont expect to sell it again for a very long time, so no short term resale issues.
    you'd think the OP is not planning to sell it after they buy it, but
    lk01 wrote: »
    Property was sale agreed to someone but their lender wont agree to mortgage. So the auctioneer tells me cash buyer is needed.
    sounds like they're the seller.
    emeldc wrote: »
    They go bust because the residents don't pay the management fees. Not particularly common, but it happens.
    For this reason alone, I'd suggest the OP runs away at high speed. If the residents don't pay management fees, there's a high chance no-one cares about the various facilities (lights, plumbing, etc), and once any existing contracts run out, the place may stop functioning correctly?


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    #10
    emeldc
    Registered Users Posts: 2,597 ✭✭✭emeldc


    the_syco wrote: »
    I'm not sure either way.

    Actually neither am I, now that I read it again :confused:


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    #11
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    NO management company ,no repairs,
    buildings will have leaks, bad lighting etc
    at some point apartments will be impossible to sell.or of very low value.


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