Purchasing apartment in block with insolvent management company

K

kilclon

Registered User
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Hi,
I was looking at an apartment in a small block (4 units) where there is no management company in place. A bank is selling the apartment and the previous management company is insolvent. It is a duplex with own door access from street with one apartment above.
How much hassle could this cause? How much of a discount on retail would justify the risk or should I just stay away?
Thanks
 
No solicitor would recommend this purchase until management issues are resolved. Also no Bank will finance the purchase in such circumstances. I ahve similar apartments on uor (bank) books and we are unable to sell them.
 
In other countries with a greater history of paying management fees, people check out the reserves of the management company before buying.

If this management company is insolvent, is the rubbish going to be collected? Is the grass going to be cut, any repairs fixed? Why is it insolvent. Is it because tenants are paying the management fees? If so, why aren't they paying the fees?


Steven
www.bluewaterfp.ie
 
the real fundamental question is how is buildings insurance obtained? Who is paying for this and how? If there is no cert then lenders do not entertain the idea of lending. After all if the property was damaged or burnt to the ground both you and the bank would have nothing. Except a very large debt of course.

Even if your a cash buyer you 'could' be buying a property with no insurance. Even the most incumbent of solicitors and landlords would know to walk away.

What do you mean when you say insolvent. Look the company up on the CRO. Is its status normal or has it been struck off?

The big second questions all revolve around maintenance.
 
Cheers all.
The block is two old townhouses which have been converted at some point into 4 units. The two bottom units have own door access and occupy the ground floor and front room on the middle floor. The top two apartments are accessed via communal stairway and occupy back room on first floor and second floor. The bottom two apartments have access to what seem like private decked garden spaces to the rear. Therefore, I think, there is no maintenance requirement for the management company of outside space. There is no outside space to the front.

I realised a cash purchase would be necessary but for the other reasons you all have pointed out I think its a bit too messy. I can't link to the property because I'm new here but its located at Fitzwilliam Place North, Grangegorman Lower D7 if any of you fancy a challenge. Last offer I heard of was €86,500. Good location from an investment point of view but just reinforces my dislike for apartments as buy and hold investments.

The property also requires complete gutting after it was destroyed by a previous owner/tenant/builder. For example they went to the trouble of drilling the window frames, filling all of the pipework with expanding foam and taking to the floors with a planer. The amount of effort put in to destroy the place is in some ways admirable.
 
I think the maintenance requirement to worry about would be the need for repairs to the roof, gutters, etc than landscaping-type expenditure.
 
You need to get to grips with the fundamentals of management companies.
Typically the company owns the actual building. That means the roof, external walls, gutters, common entrances, patios and balconies, the building structure and in more complex buildings car parks, fire alarms etc.

The unit owner owns the internal layer of plasterboard and the front door and sometimes windows including the frames. So, the most critical issue is always buildings insurance. Who pays for and administers this? Even if the building is in good knick what will be the maintenance in 1, 5, 10 years time? The inside bit is not what you need to be concerned about at this stage when deciding whether to buy or not.
 
the previous management company is insolvent
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More likely the current management company is insolvent. The money to make it solvent will have to come from somewhere, quite likely the unit owners.
 
lantus said:
You need to get to grips with the fundamentals of management companies.
Typically the company owns the actual building. That means the roof, external walls, gutters, common entrances, patios and balconies, the building structure and in more complex buildings car parks, fire alarms etc.

The unit owner owns the internal layer of plasterboard and the front door and sometimes windows including the frames. So, the most critical issue is always buildings insurance. Who pays for and administers this? Even if the building is in good knick what will be the maintenance in 1, 5, 10 years time? The inside bit is not what you need to be concerned about at this stage when deciding whether to buy or not.
Click to expand...

I understand all of this, thanks.
 
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