Irish Times Property Clinic 30th of May 2013
Publishing Date; Thursday the 30th day of May 2013.
Q. I am a member of the Owners' Management Company (OMC) for a small block of apartments built in 1994. We understand that the MUD act requires developers to transfer ownership of the common areas to the OMC. This was not done for our particular apartment block.
We have looked into having this done now but our issue is that the developer has long since ceased trading. The solicitors originally acting for the developer have also ceased trading.
How do we go about having this common area transferred to the OMC under these circumstances? Our sinking fund while adequate would not be sufficient to cover any expensive legal action. I understand any sales in the future may require this to have taken place ?
A. I would refer you to the title document of your property so that you may identify the developer and the solicitor acting on developers behalf. Your mortgage provider or solicitor would have this if you do not. You may then revert to the Law Society and enquire who has taken over the files of the solicitor who acted for the developer. It will then be possible to locate the developers' title documents pertaining to your residential development. I would also recommend investigating the status of the development company, noted in your title document, on the CRO website. It will be necessary to seek solicitors' quotes to establish the outlay for this process so that the OMC members are adequately prepared for the cost.
All common areas of existing developments, where a unit has been sold, must be in the ownership of the OMC by the 1st day of October 2011 as per the Multi-Unit Developments Act 2011. The Act was written in such a way as to assume that this would have been done without exception. The vendor of an apartment in a development without the common areas transferred might find themselves in the crack between two paves, the MUDs Act 2011 transfer guillotine date and today's date. A willing vendor, purchaser and solicitor would argue that they are not in a bind. The Act is an instrument of Civil Law and as I have found has not provided for the active participation of developers to date as there is no repercussions for failing to do this. The only option to compel a developer to transfer the common areas is to seek a court order in the Circuit Court by way of a MUDs Act 2011 Section 24 application. Consequently, many residential developments do not yet have the common areas in their ownership as such an action is costly.
Where an apartment in your development is sold, say today, that new property owner is entitled to the rights, powers and entitlements as well as obligations of the existing members as per part 8 of the MUDs' Act 2011.
Paul Huberman is a member of the Property & Facilities Management Professional Group of the Society of Chartered Surveyors Ireland
Author: Paul Huberman of H&H Property Management Consultants Ltd
Publish Date: 30/05/2013