Agency has wealth of weapons in its legal arsenal
Published 08/09/2011 | 05:00
There is a perception that the family home is sacrosanct in Irish law. But while it attracts some degree of protection, that protection is not absolute.
Under the Family Home Protection Acts, a family home cannot be sold or mortgaged without the consent of both spouses.
The law was designed to support married couples and their families.
But it has also provided wealthy and canny spouses with a legal shield to control or access their wealth: without their husband's or wife's consent, the house cannot be sold, or so the theory goes.
The protection of the family home has caused difficulties for NAMA which is hamstrung because it has, by and large, no security over developer's homes.
It now wants to force sales to recover money for the taxpayer.
In the event of a sale, NAMA will not be allowed to touch the wife's equity in the property, but may be able to recoup the husband's share -- unless the wife consents to forgo what she is due.
Creditors trying to recover debts have several, if cumbersome and costly, legal options.
They can apply to the courts to have the debt converted into a judgment mortgage registered on the deeds of the property -- this bans any dealings with the property unless the debt is paid, but this process can take 30 years to play out.
Alternatively, secured creditors like banks can apply for a Well Charging Order, usually a precursor to a request for an Order for Sale.
This forced sale process is not without its own hazards.
Although the courts have the power to order a sale, there is no absolute right to one.
This leaves discretion for judges, who don't want to interfere with legal contracts, but who try to protect the family home as far as is possible.
Many judges dealing with the day-to-day misery of repossession might be reluctant to establish a precedent in a developers' wives saga -- as it may impact on many ordinary families facing eviction without a €500,000 parachute.
NAMA knows the path to developer's homes is not an easy one, but it has a wealth of weapons in its legal arsenal.
It talks of "consensual workout deals" with compliant developers.
But in reality, there is no consent.
If a developer does not co-operate, the alternative from NAMA -- dubbed the 'Murphia' by some of its residents because of it's strong-arm tactics -- is complete annihilation and liquidation.
This is why some wives, who don't want to see their husband's livliehoods taken away entirely, have already handed over the keys to their family homes. Others may not be so agreeable.