Management Company never transfered title and is now dissolved

inchbyinch

Registered User
Messages
43
Hi All,

I own an apartment in an 2 block 16 unit development since 2006 (leasehold). The original management company was set up to cover the freehold title of lands and common areas, however the title of same was never transferred over to the owners of the individual apartments. The developer remained in ownership.

Subsequently, the company was dissolved in 2008. In order to insure the building the owners of the block of 8 that my apartment is in have formed a residents group. We maintain the building/landscape and obtain insurance on our own block. The owners of the other block all obtain individual insurance for each apartment.

We (my block of 8) are now at the initial stages of trying to obtain the title of the freehold as we don't want to re-instate the Man Company as it is not ours to re-instate.

Any thoughts?
is it possible to claim squatters rights?
does the company's claim on the land immediately dissolve once dissolved in the eyes of the CRO?

All help much obligied!

Rgds,
Ed
 
M

Mr Holmes

Guest
If you are certain that the management company owned the lands and not some other third party company and that this company was indeed dissolved, then you may rely on section 49 of the Registration of Title Act 1964. ( See the PRAI web site ) to achieve your goal.
 
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mf1

Registered User
Messages
4,395
"however the title of same was never transferred over to the owners of the individual apartments. "

This was never, ever going to happen. Title would only be transferred to the management company.

If I understand the original post, the developer company "remained in ownership." As in, the developer had an agreement with the Management Company ( as is usual) to transfer the common areas to the Management Company.

"Subsequently, the company was dissolved in 2008"

Which company? The developer? And/or the Management Company? Both?

"The owners of the other block all obtain individual insurance for each apartment."

I don't think that that is possible - they all only own the air space in side their own unit!

"We (my block of 8) are now at the initial stages of trying to obtain the title of the freehold as we don't want to re-instate the Man Company as it is not ours to re-instate."

I think it is yours - but you might consider setting up a new Management Company.

The following may be of assistance

http://www.mhc.ie/latest/insights/dissolved-management-companies-a-more-efficient-approach

https://www.lawsociety.ie/Solicitor...t-2011-on-existing-developments/#.VqdzOPmLSCg

I don't think any of the units are currently saleable save to a cash purchaser.

OP and fellow apartment owners need serious advice!

mf
 

inchbyinch

Registered User
Messages
43
"however the title of same was never transferred over to the owners of the individual apartments. "

This was never, ever going to happen. Title would only be transferred to the management company.

If I understand the original post, the developer company "remained in ownership." As in, the developer had an agreement with the Management Company ( as is usual) to transfer the common areas to the Management Company.

Not quite if my understanding was correct.

The management company was set up and the two directors were two people belonging to the original development company. It is still the registered title holder (according to the PRAI). The shareholding of this company was never distributed to the owners of the individual apartments and so remained in the ownership of another body - to this end I have no idea who those share holders

"Subsequently, the company was dissolved in 2008"

Which company? The developer? And/or the Management Company? Both?

"The owners of the other block all obtain individual insurance for each apartment."

I don't think that that is possible - they all only own the air space in side their own unit!

I agree. Wouldn't like to claim against this.


"We (my block of 8) are now at the initial stages of trying to obtain the title of the freehold as we don't want to re-instate the Man Company as it is not ours to n
re-instate."

I think it is yours - but you might consider setting up a new Management Company.

Again see above, not sure how to find out the ownership of a dissolved company. I have downloaded the constitution from the CRO website and this makes no reference to the apartment holders or any reference to its ownership.

Thank you for the links below. I'll read for any light they might shed.


The following may be of assistance

http://www.mhc.ie/latest/insights/dissolved-management-companies-a-more-efficient-approach

https://www.lawsociety.ie/Solicitor...t-2011-on-existing-developments/#.VqdzOPmLSCg

I don't think any of the units are currently saleable save to a cash purchaser.

OP and fellow apartment owners need serious advice!

mf

Where would one turn, is it a solicitor first or valuer auctioneer
 

lantus

Registered User
Messages
293
Biggest concern is that you don't have any insurance. I have heard of insurers who will take money from apartment owners but you'd need to see a successful claim being made on what is often a six and often seven figure payout on property that no one has any legal claim to.

Who or what has taken out the policy?
 

inchbyinch

Registered User
Messages
43
All eight of the apartment owners in our block are signatories on the one insurance policy. This has been the case for about 6 years. There hasn't been a claiming those years.

The apartment not selling has brought this to a head.
 

so-crates

Registered User
Messages
1,813
I don't think you quite understand why the management company should exist (based on your response to mf1). Title will never be transferred to individual owners because the property is shared between you. It can only be passed to an entity that owns the whole property - hence the reason why you all become members of the management company on purchasing an apartment. It requires a collaborative approach to manage the property. The company is made up of the leaseholders of the property. When it is initially developed the developers generally set up the company and act as the first directors, when the units are sold, you as an owner become part of the company and it is up to you collectively to manage the property, including insurance, repairs, etc. The developers eventually sell off their stock and no longer are involved in the management company.

In effect you have put in place an informal management "company" for your specific block since you collaborate in purchasing insurance. However you really need to get the management company proper in place. Title cannot pass to your ... collective? ...co-operative? The apartment owners as a whole (not per individual block) need to have a management company. You need good legal advice at this stage, none of the properties are saleable without a management company in place. An auctioneer would be of no use at all. You will also need a meeting of all (or as many as you can get) apartment owners in order to discuss this in common and start the process of getting a company established. I'd probably get the advice first and then arrange the meeting. This will not be resolved quickly.

Aside from insurance, the other big consideration is probably a sinking fund. Have you an informal arrangement in place for that too?
 

inchbyinch

Registered User
Messages
43
I don't think you quite understand why the management company should exist (based on your response to mf1). Title will never be transferred to individual owners because the property is shared between you. It can only be passed to an entity that owns the whole property - hence the reason why you all become members of the management company on purchasing an apartment. It requires a collaborative approach to manage the property. The company is made up of the leaseholders of the property. When it is initially developed the developers generally set up the company and act as the first directors, when the units are sold, you as an owner become part of the company and it is up to you collectively to manage the property, including insurance, repairs, etc. The developers eventually sell off their stock and no longer are involved in the management company.

In effect you have put in place an informal management "company" for your specific block since you collaborate in purchasing insurance. However you really need to get the management company proper in place. Title cannot pass to your ... collective? ...co-operative? The apartment owners as a whole (not per individual block) need to have a management company. You need good legal advice at this stage, none of the properties are saleable without a management company in place. An auctioneer would be of no use at all. You will also need a meeting of all (or as many as you can get) apartment owners in order to discuss this in common and start the process of getting a company established. I'd probably get the advice first and then arrange the meeting. This will not be resolved quickly.

Aside from insurance, the other big consideration is probably a sinking fund. Have you an informal arrangement in place for that too?

I think I'm more informed now. The steps I'm panning on now with my solicitor:
1) set up a new company with directors and register with the CRO. This company should comprise of 16 shares one for each apartment owner.
2) Prove that this Company satisfies the requirements of the MUDS act and apply to the chief states solicitor for title of the land to be transferred to the new company.

Does this sound right?

Thanks for all the replies.

Ed
 

peteb

Registered User
Messages
1,727
All eight of the apartment owners in our block are signatories on the one insurance policy. This has been the case for about 6 years. There hasn't been a claiming those years.

Signatories or policy holders? You would need all 8 people to be policy holders. so the cheque was made out to all parties and not just one, who can run with the money in the event of a claim!
 

lantus

Registered User
Messages
293
You need to reinstate the existing company as this will be as per your lease. I would budget 12-15k for this process. Its a high court job.

I would budget same for lands to be transferred. Could be less if all documents are easily available and everything goes well.
 

Biscuit

Registered User
Messages
1
Hi I know this is an old post but I wonder did you resolve this issue as I am in a very similar position. Also who was your insurer as I may need to explore this option also.
Many thanks
 

L_earner

Registered User
Messages
96
Hi All,

I own an apartment in an 2 block 16 unit development since 2006 (leasehold). The original management company was set up to cover the freehold title of lands and common areas, however the title of same was never transferred over to the owners of the individual apartments. The developer remained in ownership.

Subsequently, the company was dissolved in 2008. In order to insure the building the owners of the block of 8 that my apartment is in have formed a residents group. We maintain the building/landscape and obtain insurance on our own block. The owners of the other block all obtain individual insurance for each apartment.

We (my block of 8) are now at the initial stages of trying to obtain the title of the freehold as we don't want to re-instate the Man Company as it is not ours to re-instate.

Any thoughts?
is it possible to claim squatters rights?
does the company's claim on the land immediately dissolve once dissolved in the eyes of the CRO?

All help much obligied!

Rgds,
Ed
Hi Ed,
We were in a similar situation and would also like to learn how this was resolved, if at all.
When we started out on our attempts to fix our situation, we got extraordinary help from others on here. It gave us the right questions to ask our solicitor.
What we learned is that when we bought our apartments, we were not buying the bricks and mortar, but rather the right to occupy the cube of space, plus an equal share of the whole development. So, we all own the roof, the car park, the stairs, the gardens etc. While we could each insure the contents of our apartments, we had to cover the entire development in a single insurance policy. This policy was taken out by the owners management company / OMC.
When our OMC lapsed, our plan was to set up a new company, but this was not allowed. We got excellent legal advice and auditor assistance to raise the old company from the dead as it were, which was not cheap, but we had to do it.
Hopefully you were successful in doing this, and that you are all up and running again.
 

charliehorse

Registered User
Messages
14
Hi L earner
I have a deposit paid on an apartment with the same issues
and have to decide weather to pull the trigger.
Roughly what did the whole procedure cost and how long did it take?
I am worried about holding without insurance.
Charlie
 

Zenith63

Registered User
Messages
901
Hi L earner
I have a deposit paid on an apartment with the same issues
and have to decide weather to pull the trigger.
Roughly what did the whole procedure cost and how long did it take?
I am worried about holding without insurance.
Charlie
Do you know the exact state of the Common Areas and OMC? There's a big difference between the OMC still being run by the developers vs. run by the owners but no transfer of Common Areas vs. the OMC is liquidated.

I went through the process of taking the OMC from the original developers and then acquiring the Common Areas. It took a long time due to the lack of familiarity with the MUD Act at the time, I think it would be a more well trodden path for the right solicitor these days though. Legal fees were in the ballpark of €10-15k.
 

charliehorse

Registered User
Messages
14
Thanks for that Zenith
AFAIK, the CA's were transferred but the OMC (group of four) let the thing slide and did not pay any fees since 2005.
OMC was struck off. I am finding it hard to gather any info on probable cost or risk if I go ahead.
 

Zenith63

Registered User
Messages
901
Thanks for that Zenith
AFAIK, the CA's were transferred but the OMC (group of four) let the thing slide and did not pay any fees since 2005.
OMC was struck off. I am finding it hard to gather any info on probable cost or risk if I go ahead.
If you Google for something like "Solicitors ireland mud act" and just pick up the phone to a couple and ask if any have done it and what they estimate the effort might be, some will tell you to get lost but often one will come through. Or you could ask your solicitor to ask around either, you're already paying him/her.

FWIW I have seen banks refuse drawdown recently around less serious OMC/CA issues, do you need a mortgage and are you sure you'll be able to get it before you spend too much time on this?
 

L_earner

Registered User
Messages
96
Hi L earner
I have a deposit paid on an apartment with the same issues
and have to decide weather to pull the trigger.
Roughly what did the whole procedure cost and how long did it take?
I am worried about holding without insurance.
Charlie
Hi Charlie,
First off, you should be paying a much lower price for the apartment than other similar ones in the area, to reflect the title issues. If not, I would consider not going ahead with the purchase unless you have a compelling reason for buying.
Second, if you intend to sell it within say, five years, forget it. You may never legally own the property that you are buying. I knew this when I bought mine, and that I may never be able to sell it again, but I wanted it as a very long investment, to pay my pension, so re-selling is not an issue for me.
Third, you need to gather as much information as you can, from any source you can, such as existing owners, your accountant, your solicitor, and the vendor. Your solicitor can raise any requisitions on title they want, and can demand more satisfactory answers if the replies are boilerplate.
Resolving our situation cost €15k and took six years. I think the solicitor and barrister took pity on us because the developer engaged in very dirty practices. Prior to starting the legal process through the courts, we studied the form of the developer, using Dr. Google, and found that any time he lost a case in the Circuit Court, he would appeal to the High Court, and even in one case to the Supreme Court, simply to out-spend the apartment owners who were too afraid of the cost of losing and having legal fees awarded to them. We fed this information to our solicitor who arranged for the Circuit Court to put a stay on any appeal on the grounds that he was abusing the process of the legal system.
If the solicitor and barrister did not feel so sorry for us I fear their fees would have been a lot higher.
 
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charliehorse

Registered User
Messages
14
Thanks Learner for the reply.
In my case it is that the OMC was struck off a long time ago.
The MUD has four units and all the other owners are agreeable with reinstating the OMC and funding this.
There is no developer in the mix. I am in contact with all the owners.
I did some research and believe it is fairly straightforward if a specialist company is hired to do the job.
The legal fees and CRO penaltys are set so submitting the B1's for the missing years is the biggest cost.
The company I contacted said it would take between three and six months to complete.
Hopefully this is accurate.
 
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