Taking your builder to court

9

90210

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We are a small development of apts in South Dublin, we have 22 apts I our block and the builder owns 3 of them. We are almost one year into our property and a good deal of work has not been completed in the common areas, we the residents snagged the property through a reputable company who told us that the common area needs circa 150k of work to finish to be within building, fire and planning regulations.



The plans for the site do not agree with the building and the management company has the builder on their directorship. The management company are not helping and keep stalling our decision to go to court.



We are now instructing a solicitor to take action but we are concerned, as we have been advised that if the builder sells the last three units he is off the management company's board of directors.

He is also a limited Company so would we really have any chance? Can anyone advise us of other organisations who would be interested in our problems?.
 
Can you not vote him off the board and get him replaced by others? If you have more votes than he has, I'd have thought you should be able to get him out.
 
How can the residents vote him off the board ? just persuade the other directors to do so ?
 
Are you sure that the managment company has been 'handed over' to the residents by the builder at this stage? If it hasn't, I would say that the builder still has control of the management company-confirm this with the managing agent.

Get out the contracts and lease agreement you signed on closing-this should provide you with some useful information.
 
90210 said:
How can the residents vote him off the board ? just persuade the other directors to do so ?
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As far as I know (though I'm not professional expert in these matters), the directors of any company are appointed by the shareholders. In this case, the shareholders would be the property owners.

So you could call an EGM and appoint other directors as shareholders.
 
Usually the voting is weighted ( in the builders favour) until the management company is handed over to the occupiers. But you don't have to go through the management company to get the common areas finished. In any normal developement the builder will have signed a guarantee to finish the common areas before handing over to the management company- this guarantee is made to the individual purchasers and they can sue on foot of it. Also it is likely that the builder had a condition in his planning to take out an insurance bond for a substantial sum for the satisfactory completion of the common areas- so even if it is a ltd company this bond should cover it. You say you have a solicitor dealing with it, so I imagine your solicitor will give you the same advice.
 
Thanks Vanilla

We have called a meeting and will try to get a consensus from all the residents to sue if the proposed timeframe for completion is not met.

Just one thing Vanilla , we are currently paying a MGT fee which includes bins , landscaping , ESB charges all for Common Areas. should we be paying this if the builder has not handed over the common areas. Certainly the bins is not an issue with us, but other work has been completed using the residents funds for minor repairs and cleaning away builders waste , car park gate repairs etc..
 
Although it really depends on the wording of the indemnity given by the builder to you and the transfer documentation, in general I would expect that the management fee would be used for upkeep/ wear and tear. I wouldnt expect that it would be used to pay for builders rubble to be removed- this is a matter for the builder, nor for the completion of the common areas/ landscaping etc. However I would think that repairs to a gate ( as long as they were not due to a faulty installation in the first place) and the normal upkeep you mention, would be payable from the fee. Fees are generally payable from the outset and put into a sinking fund from which to fund any future contingencies.
 
"but other work has been completed using the residents funds for minor repairs and cleaning away builders waste "


Many of the contract documents and the standard 999 year leases used in apartment blocks fail to make an explicit distinction between the "capital project" type of work for which the builder is responsible, and the maintenance work, for which the Management Copmany is responsible. As Vanilla says, a lot can hinge on the precise wording of the indemnity given by the builder. I always look for for it to be made clear that the builder must finish things to a proper standard before handing over to the management company. It is not always forthcoming, because this means altering the standard documents on all transactions in a development. But when I do succeed in getting the standard document altered to address this concern, it means that all of the people using a "cut price" solicitor get the benefit of me going that extra mile for my client. I have no doubt that other people have likewise benefitted from work done by Vanilla and other legal posters to this forum.

Sorry for bragging, but it's true.
 
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