Home Economics: Answering your property questions
Our daughter is moving in with her boyfriend to their first house and although we like him, his employment wouldn't be very steady; she is a civil servant and contributing, by choice, €35,000 of savings towards the deposit while he is contributing nothing.
They will share the mortgage payments equally. We are worried that this value be reflected in the ownership, especially if anything should happen down the line. How best can she do this?
Sinead replies: This is a sticky issue, especially if your daughter doesn't share your concerns, in which case, while you can advise, you can't compel her to do anything.
The legalities are explained by Susan Cosgrove of Cosgrove Gaynard Solicitors: "Firstly it is important to understand the difference between buying as a 'joint tenant' or as 'tenant in common'. In the former, should one party die, their interest automatically passes to the survivor. If they purchase as tenants in common, they each own that share individually.
To safeguard the deposit, they could purchase the property in unequal shares as 'tenants in common' to reflect its value, e.g. 60/40. Alternatively, a co-ownership agreement can be prepared as is recommended for cohabitants. Should the relationship end, it will provide an option for one to buy the other's share, or for the sale of the property, but most importantly for the repayment of the deposit contributed by your daughter. By the way, The Civil Partnership Act 2010 establishes a redress scheme to give protection to a financially dependent person at the end of a long-term relationship similar to orders available to married couples when they separate or divorce, including the provision of maintenance and property adjustment orders.
I have been given the opportunity to work abroad for a year (or two). However, as I am getting relocation expenses I don't need (or want) to let out my house. I am anxious, however, that the insurance is maintained although I have family members checking post and keeping it aired etc. Do I need to inform them we won't be there and might it be a problem?
Well, you certainly need to tell them. Insurers generally assume a "material" risk when a house is unoccupied and many insurance policies are automatically void if it is vacant for more than a specified period, say two months.
Brian Nelis of the Irish Brokers' Association says: "Material risks must be notified to insurers and failure to do so may lead to a possible claim being declined. If the house is unoccupied for a long period, you may be charged an additional premium or have certain restrictions placed on the cover provided, such as only fire-related events covered, with the insurer insisting all services are turned off and all combustible items removed. Insurers will require that the property is regularly inspected."
Could a family member stay in the house in your absence? At least, notify neighbours and the alarm company if you have one. In addition, turn off water and utilities at the mains, ensure postal deliveries are re-directed and consider installing security lighting.
The Ryan Review
We're sure it's coincidence (ahem!) but the Central Bank's press release on the latest mortgage arrears figures landed the same day as the much anticipated, headline-grabbing, sexier ECB interest rate cut.
Still, we trudge so you don't have to, so let's sum up the not-terribly-good news, spun as quite-good-news.
Banks are beginning to see the light when it comes to making deals on debt. Even hoary old Bank of Ireland who said they never would are joining the rest in arrears hell and actually engaging on solutions. 9,000 mortgages were restructured during the first quarter (although 'restructure' for many is still a term synonymous with voluntary repossession and interest only loans, neither a 'solution'), with split mortgages increasingly being offered. While overall arrears fell (hurrah!) to 132,217, or 17.3pc of all domestic mortgages, it's still an awfully large number. The 90-720 day arrears declined by 5,090, but where did they go?
Well it seems many simply dropped into another, even lower status box, of 720+ day arrears (henceforth known as the hopeless cases). These saw an increase of 1,729 (+5.1pc). This new-ish category accounts for 35,314 mortgages, or in banking terms, €7.4bn, so it's certainly nothing to smile about.
That doesn't even account for the still woeful buy-to-let (BTL) market. Their 720+ day arrears were up too, accounting for €4.2bn of the total.
If you're still at the start of the process, be cheered by the fact that 58pc of restructured accounts were not even in arrears, showing that if you engage early on, your bank will (probably) listen.