Would like to buy, but ... managing agent now insolvent

Rautavaara

I've done a couple of viewings for a flat ... really like the place. It has everything going for it. The big problem is that the managing agent has gone insolvent and essentially there is nobody managing the freehold, and therefore the property.

I think this has put buyers off, and the price has come down in the past week.

Does anyone have any experience with such situations? If you buy the property, are you buying the lease, even though it may now be defunct, or has nobody managing it?

I need advice. How much would a solicitor charge to look into this kind of thing and advise of the risks?

Thanks

_s79

I`m in the same situation. I have been chasing the agent for answers but they are not very interested (they seem to be looking for a cash buyer).

The first thing to try and find out from the EA is whether the property is insured, as I believe this is one thing that could cause problems getting a mortgage.


How many flats are in the building/block? If you do manage to buy the property then you will need to try and speak to the owners and arrange a new management company or setup your own. This can be difficult when most are rented out and the owners could be out of the country.


p.s that's one hell of a FTB deposit.

Richard_Webster

Please remember that there can be:

1.A Landlord who owns the freehold or superior lease

2,.A Managing Agent who acts on the landlord's behalf to do the day to day management.

3. A management Company which can be a separate company with responsibilities under the lease separate from those of the Landlord or the term is also used for a company owned by the residents which in turn owns the freehold or superior lease.

Both a Freeholder and a Management Company can employ a Managing Agent. Do not confuse Managing Agent and Management Company!

So in this case I would be trying to contact the landlord to find out what he is going to do about appointing a new managing agent. Generally the managing agent is just that - an agent - and acts on behalf of the Landlord and the legal repsonsibislites will be that of the Landlord - so if there is no managaing agent you go direct to the Landlord.

Rautavaara

Hi, and thanks.

My mistake. I should point out that it is the managing company that dissolved. I have been informed that currently nobody owns the freehold.

Not sure what the other owners take on this is, or how they have managed things among themeselves under these circumstances. There are 4 flats in total in this particular property.

_s79

Rautavaara wrote: »

Not sure what the other owners take on this is, or how they have managed things among themeselves under these circumstances. There are 4 flats in total in this particular property.

Go and knock on their doors and ask them

Richard_Webster

The other flat owners will have to set up their own flat management company and then approach the Treasury Solicitor's Bona Vacantia department to see if they can buy the freehold from them. (Assets of dissolved companies pass to the Crown.)

Really better to let them sort that out themselves - they won't bother until they find they can't sell their flats. If you buy then they still won't bother.

If you don't buy they might do something and then you will have done a favour for someone else int he future who wants to buy once they have sorted it out. It could take a few months to acquire the freehold and a few thousand pounds.

Rautavaara

Well, choosing not to buy goes in the favour on the current owners ... to be honest, I'm more interested in what goes in my favour right now

The property is at a bargain price, and between 4 owners, I'm sure, or would hope, that it would be possible to buy the freehold and come to a management arrangement. Still, that may be overly-optimistic.

I guess the risks are to buy a property without a freeholder, and risk not having any maintenance or emergency repairs carried out because nobody would agree to who should pay what :think:

Why are people so funny when it comes to money, and potentially putting their own property at risk instead of doing the right thing? Hmmm...