Q My wife and I have been renting a house in Co Meath for almost five years. Last December the house was put on the market for sale (we were not informed). We applied for a mortgage and were successful. We made an offer which was accepted and paid our deposit. Three months later the property is still being advertised on a number of websites including that of the selling agent. Despite repeated efforts to finalise the deal we are no closer to signing. Further research by ourselves has revealed that the landlord, a property developer, has become insolvent and that the house is possibly owned by a leading bank. What could be the delay in the sale of this house?
A Your position is clearly frustrating and unsatisfactory. This question raises a number of points.
First of all the owner and or bank/receiver should have been informed that if the property was to be offered for sale the existing tenants (ie you) should have been informed. This is a matter of common courtesy and given the term of the tenancy in my opinion you had a legal right to know. Indeed, given you have occupied the property for five years continuously, you may have established rights to a long-term lease and in this respect I would suggest that you consult both the Private Residential Tenancies Board (PRTB) and/or your solicitor.
The second part of the question deals with your offer and subsequent efforts to purchase the property. You say that you made an offer which was accepted. Was this offer made directly to your landlord or to an estate agent?
If, as I suspect it was to the estate agent, once the offer was accepted and a deposit paid, they cannot and should not be soliciting further offers by keeping the property on the market. However, until such time as you exchange signed contracts, there is no contractual relationship between you and the vendor, be that the owner or now the bank and/or their receiver.
Unfortunately your circumstances are all too familiar in a market dominated by bankrupt builders, developers, investors and property owners. Once a property owner becomes insolvent normally a bank will do one of two things; it will appoint a receiver over the assets or it will take possession of the property itself. Banks are far more reluctant to do the latter as it may put a large degree of responsibility on them.
There are lots of potential legal or banking/security issues between the owner and their bank that have the potential to delay the progress of this sale. My advice is that you engage a solicitor to try to clarify the position and if you are not making any progress you may be well advised to look for an alternative property.
Gerard O’Toole is a chartered surveyor and estate agent
Q A few years ago I bought a second house to rent out as a supplement to my pension. Over the years the rent has become smaller and the taxes have increased. Now I would like to sell the property.
As I can’t afford to be without rent for any lengthy period, could I rent it to new tenants letting them know of my intentions and that there may be viewings. The current tenants’ lease expires shortly. I have a management company looking after the house but have not yet said anything to them.
A The good news is that the property market, in Dublin at least, appears to be improving slightly and the demand for family-type houses in good locations appears to be relatively strong. It is difficult, however, to sell a property with tenants in situ. Viewings can be difficult to organise and you are relying on tenants to keep the property presentable.
It is important to remember that the end of a lease is not necessarily the end of a tenancy as the 2004 Residential Tenancies Act gives tenants rights to extend their occupation (part 4 of the Act). These rights can be defeated under certain circumstances, one being an intention to sell the property.
If you wish to sell the property without the tenants in situ, you will need to issue a termination notice, the length of which is determined by the duration of the tenants’ occupation. Details on the length of the notice period required are available on the Private Residential Tenancies Board (PRTB) website prtb.ie. You should also ensure that the notice is correctly filled out. Expert advice from either a chartered surveyor or a solicitor is essential as any error in the notice will invalidate it.
The alternative is to keep the tenants in the property. This has the advantage of securing your income but will make marketing the property to prospective purchasers much more challenging.
In my opinion, it is probably better to get vacant possession and market the property for four to six weeks. If there is no interest, you can re-let it but there are provisions in the Act requiring you to offer it to the last tenants. Again, expert advice should be sought.
Simon Stokes is chairman of the residential professional group of the SCSI
Q My daughter purchased an apartment in a purpose-built block containing three other apartments. No management company was ever formed so the builder collected the money for the building insurance from each owner. He ceased doing this after two years when it fell to my daughter to do it. This has proved quite unsatisfactory as she has difficulty contacting two of the other owners, so rather than letting the insurance lapse for the whole building she has paid the missing amounts. This is solely to protect her interest. She has written to the two people involved at their last known addresses but with no response.
What is her best course of action as she is not willing to allow this matter continue?
A In my opinion, your daughter’s actions to date have been correct and prudent. It is imperative for the protection of her property and compliance with any mortgage agreement that building insurance is in place and adequate.
In Ireland apartment ownership is normally by way of grant of a long-term lease (typically 999 years) with the developer as the initial landlord and the apartment owner as tenant. From the outset the developer will contract to transfer the landlord’s interest (freehold) and responsibilities to an owners’ management company which has been specifically created for this purpose. The title lease will detail responsibilities towards procuring insurance and other services together with detailing what parts of the structure are individual to the apartment owner and those parts that are shared or management company responsibility. Each owner will agree to contribute to the full costs of the operation of the management company.
Your daughter’s first step should be to review her title and determine what mechanism is in place to procure common services and who contributes to the costs.
I take it that two of the apartments are rented given her difficulty in contacting two of the other owners. It is worth noting that not only does the Residential Tenancies Act 2004 oblige landlords to provide tenants with contact details (Section 12(1)), but it also obliges the landlord to insure the premises. This means that the tenants of the apartments should be able to provide your daughter with contact details of their landlord or his authorised agent. The insurance policy in place will also note the interest of the parties and their mortgage providers and it may be possible to try to make contact through writing to the relevant lending institution.
Another means of contacting the other owners could be through their solicitors whose details may be available from the developer’s solicitor. The developer’s solicitor would have also created the title for all four apartments and may be willing to advise on how the title is structured.
I would recommend that your daughter moves to resolve this matter quickly as it may take some time.
Paul Mooney is a member of the property and facilities management group of the SCSI, scsi.ie
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advice should always be sought.
