Checklist: Requisitions on Title - questions for your solicitor to ask
Requisitions on Title are a checklist of questions relating to the sale of a property which your solicitor can ask the seller's solicitors to provide information on.
The following are sample Requisitions on Title relating to management companies.
Your solicitor may request that the seller provide:- The lease of the common areas to the management company
- Contract for the sale of the reversionary interest to the management company
- Block insurance policy
- Memorandum and Articles of Association of management company
- One management company will be responsible for the maintenance of the estate
- The service charge will be divided equally among the units
- The only members of the management company will be the owners
- Each of the owners will have the same shareholder rights.
- The seller is aware of any proposal by the management company to carry out work/incur expenditure which would substantially affect the service charge payable at present
- The developer or the management company or agents manage the estate
- The services (including roads, footpaths sewers and drains) abutting or servicing the estate have been taken over by the local authority
Other important issues
Some other key issues your solicitor can examine may include the following:- Ensuring that the person selling a property is the sole owner or has the right to sell
- Evaluating the contractual documents to ensure they safeguard your interests
- Ensuring that a ‘good’ title is obtained and verifying ownership
- Checking buildings insurance and in due course arranging for your name to be included on the block insurance policy
- Checking whether land has been registered and the existence of any restrictive covenants
- Carrying out searches
- Ensuring that there are no judgments against the property, or ensuring that they are cleared before completion
- Arranging registration of the title in the new owner’s name after the sale of the property
- Examining the contract for the sale of the reversionary interest of the common areas to the management company
- Examining the Memorandum and Articles of Association of the management company
- Explaining how much the service charges will be and how they have been divided between individual owners
- Requesting the most recent set of financial statements from the management company
- Requesting a copy of the management company’s budget
- Enquiring if a sinking fund is in place or planned. What is the present level of the fund? In whose name is it held?
- The management company and/or managing agent (if there is one in place) should be asked for their view
- Checking if the seller is aware of any proposal by the management company to carry out work/incur expenditure which would substantially affect the service charge payable at present
- Will one management company will be responsible for the maintenance of the estate?
- Enquiring if it is the developer or the management company or a firm of managing agents managing the estate
- Procuring details of the managing agent
- Ensuring that the development has compliance certification with regard to planning permission, Building Regulations, including a fire safety certificate under Part B, Fire Safety, of the regulations
- Enquiring if the property complies with Energy Performance Regulations and what the Building Energy Rating will be
Memorandum and Articles of Association
In addition to explaining the particulars of the above legal documents to you, your solicitor should also request sight of the Memorandum and Articles of Association of the management company.
These are the company law documents used to define the aim of the company and the way it will be structured and run.
The Memorandum and Articles of Association are very important as they set out how the management company will be governed and what rights owners will have in terms of having a say in how it is run.
Of particular importance is the fact that the Articles set out who the directors of the company are (i.e. who is responsible for running the company) and what voting rights you, as a member will have.