management company delisted

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galway_blow_in

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was enquiring about an apartment which is going to auction quite soon , estate agent stated that there is currently no management company in place ( only four apartments in block as its above a small parade of commercial units ) and that the owners would need to get together and resurrect the company or form a new one between them

while obviously an extra chore , how difficult is this ?

what are the consequences of not reinstating the management company and simply cleaning windows , collecting rubbish yourself , insuring the property
 
Usually there are three parties to a lease. The developer, the management company and the purchaser.

If the management company is listed as a party then the property can't be sold if the management company has been struck off.

You can get it restored within 6 years. Your solicitor will advise.
 
Joe_90 said:
Usually there are three parties to a lease. The developer, the management company and the purchaser.

If the management company is listed as a party then the property can't be sold if the management company has been struck off.

You can get it restored within 6 years. Your solicitor will advise.
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you would think it would not be going to auction if the management company was listed as a party as you say ?

are you saying you can rent the place out provided the company is reinstated within six years from the time it was disolved ?
 
Actually, the MC being struck off is a significant impediment but if some purchaser is willing to go ahead, it can be done. But it is madness, in my opinion.

This is a cash buyer situation only - no bank would touch it.

And if no bank would touch it, you have to ask yourself why?

Technically, it can be bought and a purchaser could stumble along aimlessly for ever 'simply cleaning windows , collecting rubbish yourself , insuring the property'

And it can be rented out - when was the last time a tenant asked to see a Block Policy?

But you'll never sell to anyone other than a cash purchaser.

There is no compliance with the Multi Unit Development Act and there have to be concerns about insurance - the Management Company owns the bricks and mortar, the four apartment owners only own the air space - can they insure?

The advice to a client in this situation is walk away - it is a mess that nobody has yet fixed and it won't get fixed until someone takes on the thankless task of addressing it.

mf
 
mf1 said:
Actually, the MC being struck off is a significant impediment but if some purchaser is willing to go ahead, it can be done. But it is madness, in my opinion.

This is a cash buyer situation only - no bank would touch it.

And if no bank would touch it, you have to ask yourself why?

Technically, it can be bought and a purchaser could stumble along aimlessly for ever 'simply cleaning windows , collecting rubbish yourself , insuring the property'

And it can be rented out - when was the last time a tenant asked to see a Block Policy?

But you'll never sell to anyone other than a cash purchaser.

There is no compliance with the Multi Unit Development Act and there have to be concerns about insurance - the Management Company owns the bricks and mortar, the four apartment owners only own the air space - can they insure?

The advice to a client in this situation is walk away - it is a mess that nobody has yet fixed and it won't get fixed until someone takes on the thankless task of addressing it.

mf
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its a three bed apartment ( 70 sqr meters ) in a provincial town of 7000 people but with a hospital , AMV on the property is 18 k ( eighteen grand ) , now it may go for thirty but if you were able to collect even 300 quid per month rent on the place at a ten month per year occupancy , thats a pretty good yield , when i asked the estate agent about it today , he said " the good news is there is no management fee , the bad news is there isnt even a management company "

would an insurance company pay out of tenants got hurt inside the property , assuming there was no management in place for a while anyway ?
 
as someone who owned and lived in a development where the management co was almost non-existent, and at one point were "listed for strike off" (thankfully it didnt happen), my advice is to stay well, well away from it!
 
JohnJay said:
as someone who owned and lived in a development where the management co was almost non-existent, and at one point were "listed for strike off" (thankfully it didnt happen), my advice is to stay well, well away from it!
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what were the issues specifically ?
 
The MC is in place to pay a property management company to manage the development. If there is no MC in place, this wont happen unless you are lucky enough to get neighbours to group together to collect money and manage the development themselves. In most cases, the MC/Property management company will collect the management fees and pay for the developments essentials. These will include insurance for the common area, bin collections, upkeep for the common area, street lighting, road maintenance, ect, etc. If all these things start falling away, how happy will your tenants be?

What happens if the roof blows off the building next winter? Who will be responsible for getting this repaired? If your neigbour sets fire to the whole building and there is no insurance in place, what happens then?

This will be a leasehold purchase. The MC owns the building, you are basically leasing it from them. Are you happy leasing it from a company that doesn't exist?

In my case, we managed to claw back the MC before it got struck off. By then, they had stopped collecting the bins, the streetlights had gone off as they weren't paying the bills, the landscapers had stopped cutting the grass and they were threatening to stop paying the public liability insurance. We got the MC reasonably stable and then I sold my apartment. I'll never buy another one regardless how stable the MC is.

And if your solicitor is worth his/her fee, he/she wont let you buy this either.
 
JohnJay said:
The MC is in place to pay a property management company to manage the development. If there is no MC in place, this wont happen unless you are lucky enough to get neighbours to group together to collect money and manage the development themselves. In most cases, the MC/Property management company will collect the management fees and pay for the developments essentials. These will include insurance for the common area, bin collections, upkeep for the common area, street lighting, road maintenance, ect, etc. If all these things start falling away, how happy will your tenants be?

What happens if the roof blows off the building next winter? Who will be responsible for getting this repaired? If your neigbour sets fire to the whole building and there is no insurance in place, what happens then?

This will be a leasehold purchase. The MC owns the building, you are basically leasing it from them. Are you happy leasing it from a company that doesn't exist?

In my case, we managed to claw back the MC before it got struck off. By then, they had stopped collecting the bins, the streetlights had gone off as they weren't paying the bills, the landscapers had stopped cutting the grass and they were threatening to stop paying the public liability insurance. We got the MC reasonably stable and then I sold my apartment. I'll never buy another one regardless how stable the MC is.

And if your solicitor is worth his/her fee, he/she wont let you buy this either.
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i was unlikely to buy it anyway but when no one will touch something with a barge pole , the price is usually baked in to account for this , solicitor advise against buying places like this instinctively and its safer for them to do so so i would not really place a huge importance on that , its to be expected they air on the side of caution , im thinking of investing the money in russias largest mobile telecom provider , current dividend yield is currently just shy of 10% , large depreciation of the ruble this past five years has hit the stock price ( in dollars ) but it scores well on every measure , free cash flow , debt levels

again a risky investment ( relatively speaking ) and im sure most here would again say run a mile but emerging markets have been in a bear market for five years , eventually everything has a value ( even russian publically listed companies ) and the good usually gets thrown out with the bad during bear markets
 
"solicitor advise against buying places like this instinctively and its safer for them to do so so i would not really place a huge importance on that , its to be expected they air on the side of caution "

Solicitors advise - the clients make their own decision. And when they have cash to spend and no bank to satisfy on security, they are free to do anything they like

Interestingly, when someone buys this and it all goes pear shape, an awful lot of clients suffer significant memory loss!

I didn't realise, you didn't tell me, had I known I wouldn't have and , my personal favourite...........Why did you let me / not stop me?



mf
 
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