:format(auto))
Introduction
One of the many potential factors that can delay a conveyancing transaction in a multi-unit development is providing the purchaser with full details of the owners’ management company (“OMC”) responsible for managing the common areas of such developments.
To help minimise such delays, the Law Society of Ireland has recently issued updated precedent pre-contract enquiries for the sale of units within multi-unit developments.
Multi-Unit Developments Act
The Multi-Unit Developments Act (the “MUDs Act”) governs the ownership and management of common areas within multi-unit developments. Given the considerable length of time that has passed since the introduction of the MUDS Act in 2011, the Law Society have excluded many enquiries which had sought confirmation that the OMC was complying with the MUDs Act.
New Precedent Pre-Contract Enquiries
As a result, the Law Society now requires the vendor to provide the following information in the new precedent MUDs pre-contract enquiries:
Copies of the OMC’s most recent AGM minutes
Minutes of any EGM held by the OMC within the previous three years
The most recent set of filed accounts
The annual report under section 17 of the MUDs Act or a summary of the required information
A copy of the house rules, if any
Proof of payment of the service charge
Provided there are no concerns around fire safety and that significant works are not required within the multi-unit development that could lead to an increased service charge or a once-off levy, the information required under the new precedent pre-contract enquiries should already be in the possession of a diligent vendor.
Such an owner would typically attend the AGMs of the OMC and hold the most recent report which the OMC is obliged to issue under section 17 of the MUDs Act.
OMC Directors’ Report Requirements
Section 17 of the MUDs Act mandates that a report of the directors of the OMC be provided to each member prior to the AGM and sets out in detail certain information which the report must include. The report should comprehensively address several matters such as:
The income and expenditure of the OMC
Details of the sinking fund for the development
Details of planned expenditure of a non-recurring nature
Details of the insurance the OMC has in place in respect of the development
Should any of the required information be absent from the Directors’ Report, this information should be provided to the vendor by the OMC without cost.
As noted above, all this information should be available to a vendor within a multi-unit development. It can also be obtained from the managing agent but a fee of several hundred euro can frequently be charged for this information.
In addition, if matters relating to fire safety and other issues which could involve a substantial levy or an increase in the service charge are not satisfactorily clarified, the vendor should consider raising the relevant pre-contract enquiries with the OMC or its managing agent.
Conclusion
Even in the most organised of households, collating the required information takes time and can delay the preparation and the issuing of contracts for sale.
By the Law Society clearly setting out the required pre-contract information that a vendor of a property in a managed development is obliged to provide, the hope is that this should lead to more efficient and effective transactions and provide greater certainty for all parties.
It is strongly recommended that any prospective vendor should speak to their Solicitor at the same time they talk to their estate agent when considering selling a property so that all information needed to support any sale can be collated and title deeds released prior to any sale being agreed. This will ensure that, once a sale is agreed, contracts can issue promptly and without delay.
Further Information
For further details about Conveyancing or any related Property matter, please contact Partners Greg Flanagan or Paul McCutcheon in our Property Team.
:format(auto))
:format(auto))
:format(auto))
:format(auto))