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New Precedent MUDs Pre-Contract Enquiries were issued by the Conveyancing Committee today. In the light of the considerable experience since the MUDs Act was enacted the Committee has decided to omit many enquires seeking confirmation that the Owners’ Management Company was complying with the MUDs Act. This is a Statutory Obligation.

Where there are no issues with Fire Safety and no substantial works are required in an apartment development which are likely to involve a levy/increase in the service charge in the short term, the Conveyancing Committee suggests that a vendor’s solicitor should firstly discuss the new MUDs Pre-Contract Enquiries with the vendor and see if it is necessary to get the replies from the managing agent of the OMC. The vendor’s solicitor should review the documents of title which in most cases will contain many of the documents sought by the new Precedent MUDs Pre-Contract Enquiries issued today. 

The Committee is of the opinion that the new MUDs Pre-Contract Enquiries are not beyond the scope of a careful apartment owner who attends the AGMs of the OMC and has available the most recent Report under Section 17 of the MUDs Act to rely on in replying to the MUDs Pre-Contract Enquiries. The Vendor of any apartment in a MUD which is being run in accordance with the MUDs Act should have access to most of the details required to furnish proper replies without much effort. The accounts are important but every owner gets a copy of these before an AGM and an OMC is obliged by Section 17 of the MUDs Act to provide each member with a Report of the Directors in advance of an AGM. Such a report includes statements of :

(a) the income and expenditure relating to the period covered by the report;

(b) the assets and liabilities of the OMC;

(c) the:

(i) funds standing to the credit of the sinking fund, and

(ii) details of the amount of the annual contribution to the sinking fund and the basis on which such contribution is calculated;

(d) the amount of the annual service charge and basis of such charge;

(e) the projected or agreed annual service charge relating to the current period;

(f) any planned expenditure on the refurbishment, improvement or maintenance of a non recurring nature which is intended to carry out in the current period;

(g) the insured value of the development, the amount of the premium, the name of the insurance company and a summary of the principal risks covered;

(h) in general terms, the fire safety equipment installed in the development and the arrangements in place for its maintenance, and

(i) full disclosure of any contracts between the OMC and a director or shadow director.

If the Directors’ Report does not contain all the information that it is obliged to provide under the MUDs Act the vendor should not have to pay any fee to obtain any missing details.

Purchaser’s solicitors should continue to ensure that service charge is paid or apportioned to the date of completion of the sale.

The Committee understands the need for an OMC and its Managing Agents to get the name and contact details of a purchaser of a unit in a Managed Development. Owners of a unit in a development to which the MUDs Act applies are obliged under Section 8 (3) of the Act to provide the OMC with, inter alia, details of their name and address, particulars of the names of any tenants or habitual occupiers, and other contact particulars the OMC may reasonably request. To avoid ongoing enquiries to their vendor clients vendor’s solicitors should ask purchasers to complete a reasonable Owner’s Contact Detail form and to provide this directly to the OMC or its Managing Agent on or immediately after completion of the sale.

If matters relating to fire safety and other issues which might involve a substantial levy/increase in the service charge are not clarified to the satisfaction of the purchaser a solicitor for the vendor should consider raising all or some of the Pre-Contract Enquiries with the OMC or its Managing Agent.

Furthermore where a vendor and the vendor’s solicitor elect to seek replies to the MUDs Pre-Contract Enquiries from the OMC or its Managing Agent they should ensure that the replies will be signed on behalf of the OMC and that the fee sought for the replies is reasonable in all the particular circumstances.

The Law Society Requisitions on title (2019 Revised Edition) are under review by the Committee at present. The new edition of the Objections & Requisitions on Title will include the new precedent MUDs Pre-Contract Enquiries for apartments and duplexes issued today. Pending the issue of the new edition of the Objections & Requisitions on Title, solicitors should use the new MUDs Pre-Contract Enquiries for apartments and duplexes issued today.