Old Management Company Compliance

Justwanttosell4321

We accepted an offer on our house in February and so far it has been a long complicated process as the old managment company has a restriction on our deeds. The estate (13 houses, 3 affordable) has a new management company of which we are not members of. We cannot use a RX2, RX3 or RX4 for the old management company as we are unable to contact the only director as the builders went bust. The solicitors are now requesting a Compliance Certificate and a Deed of Covenant from the new management company. Is this the only option? We are buying a house where the seller is quite money scarce and bank may reposses.

eddddy

Presumably you're selling a freehold house where you have to pay an estate management charge for maintaining the grounds etc.

If so, all the parties should have expected that there would need to be a Deed of Covenant and Compliance Certificate right at the outset. (And it would have been stated in your deeds.)


I imagine the buyers solicitor / buyer left these things til last, to save costs if purchase fell through. For example, they waited until the mortgage application was successful and the searches were checked, before spending money on drafting the Deed and Compliance Certificate.

The sale almost certainly can't complete without them.

Justwanttosell4321

We are not a member of the new management company (not all the residents are) and do not pay any charges, only contributions on certain things. We don't have the deeds either (new build). We expect that we would incur the charges for the Deed and Compliance Certificate, but as the old management company is still in existence albeit with Companies House "Compulsory strike-off action has been suspended" for two years, can the new management company complete a Deed of Covenant as well as the Compliance Certificate to prove they have complied with everything?

loubel

On what basis is the new management company managing the estate? 

Justwanttosell4321

Only managing one small piece of land (not near our property) and small entrance area (grass), nothing else.

eddddy

I think the question might be: under what authority are they managing that area?

What legal right (if any) do they have to manage that area? What legal right (if any) do they have to collect money from homeowners towards the costs of managing that area?

Justwanttosell4321 said:

[We] do not pay any charges, only contributions on certain things. 

I'm not sure what differentiation you're making. If you are being asked to pay a contribution, you are being asked to pay a charge.

(Your estate management charge would be your contribution to the upkeep of the estate.)

Justwanttosell4321

No.1 Management company is in insolvency, uncontactable. No fees ever paid. Does nothing, never has. No.2 owns a small parcel of land they manage. We (as a whole estate) were asked to contibute to manage a grassy area by the estate entrance (not owned by No.2, presumably by No.1), some agreed, we did not. Upshot now, is No.1 and No. 2 cannot provide the required Certificate of Compliance or a Deed of Covenant, so cannot sell. Land Registry has not come up with a solution either. This applies to all 9 houses on the estate. Only able to sell to a cash buyer or private mortgage.

eddddy

Justwanttosell4321 said:

No.1 Management company is in insolvency, uncontactable.

I'm no expert on this, but if the management company is insolvent, I think you (or a group of you, or somebody else) need to contact the administrator/liquidator and attempt to acquire the rights and responsibilities of the management company. 

In simple terms, you (or somebody else) "buy" the management company from the administrator/liquidator, and take over their estate management function.

If the company has already been dissolved, you might be able to restore it.

You probably need to discuss this with a suitable solicitor. Your conveyancing solicitor might not know about this stuff, but if they're part of a larger firm, they might have colleagues you could advise on this.