Monday 5 December 2016

Home economics: Answering your property questions

Published 11/09/2015 | 02:30

Partner has not being paying their half of the mortgage
Partner has not being paying their half of the mortgage

Our property expert advises on a tenants right's when a landlord ups the rent and what to do when an ex-partner has let a joint mortgage slip into arrears.

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Question: I'm returning to college this month and even though I continued paying rent throughout the summer, my landlord has just informed me that he's upping it to an amount I simply can't afford. While there's not much I can do about this, he has only given me 10 days' notice to vacate which isn't enough time to find somewhere else. I've asked him for more time but he wants to show the flat. Is there anything I can do?

Sinead replies: Yes. First of all, he can't do that. If you've been paying rent throughout the summer, you have gained what are called Part 4 rights giving you right of tenure to remain in the property for a further 3.5 years. However, despite this, it may still mean you cannot afford the rent increase (which must, by law, be no more than 'market levels'). Either way you are entitled to 28 days' notice after any increase is notified to you under the Residential Tenancies Act 2004.

So, you have two forms of redress: one may be against the actual increase in the amount of the rent - if you believe it is not in line with similar properties in the area (check prtb.ie or daft.ie for comparisons), you can complain to the Private Residential Tenancies Board.

If you do, you MUST continue to pay rent at the current rate until it's sorted and it costs €15 online to complain and you can stay put while it's being decided.

Secondly, if it is a reasonable increase and you still can't afford it, you're entitled to at least 28 days before having to leave. Your landlord should know this, so threaten him with the PRTB and see if he will back off.

Question: I separated from my partner in January. I agreed to continue paying my share of the mortgage on the house we jointly own as we decide what to do with the property. She lives there with our daughter.

I've just discovered, by an accidental re-routing of post, that the mortgage has gone into arrears - this means she hasn't been paying her part of the mortgage as we jointly contribute to this via our separate current accounts into the mortgage account.

The bank says we owe €5,750 and is threatening legal action. My ex won't take my calls and I am anxious this debt will count against me in the future. What should I do?

Sinead replies: This is a most unpleasant situation to find yourself in. While you are paying your 'portion' of the mortgage your ex-partner doesn't appear to be paying hers, and the loan has tipped into arrears in the months it has taken you to discover this. While I can see the moral argument you have, the bank won't classify it in this way.

Susan Cosgrove of Cosgrove Gaynard Solicitors, says: "It is extremely likely that your mortgage is 'joint and several' which essentially means that either party can be held liable or responsible for the entire amount. The impact of this clause is that essentially you have both agreed to pay your mortgage together but have also both separately agreed to discharge the mortgage in total individually.

Therefore, in your circumstances, the bank can choose to pursue both or either of you for the amount due. My strong advice would be to contact your bank immediately and explain to them that you are separating.

"They may agree to a moratorium on the mortgage whilst separation proceedings are pending to prevent further arrears accruing".

You might also want to take the opportunity to contact a solicitor and discuss the matter with him/her. Any debt unpaid has repercussions on future borrowing as it can affect your credit rating.

While the latest Central Bank (CBI) quarterly report on mortgage arrears was billed as a good news story (fewer people in arrears, banks playing ball on restructurings, blah blah), they couldn't hide the fact that in the two-year plus category there are over 38,000 cases sitting, impaired, probably terminally, and not being dealt with.

In fact there are 1,000 more of these than last year. Many are well over two years in debt also. The best the spin doctors at the CBI could come up with is that the growth rate of this category is slowing down. Great, then. Cuppa, anyone?

The truth is they've been going up and many are still not being repossessed, as should now be standard - especially the buy-to-let landlords whose alternative pension fund has gone pear shaped. It's harsh, but the truth is that sitting on these basket cases hoping plan B will pan out (which can only be by winning the lotto), is pointless. One fifth of all buy to lets are in arrears - a staggering 31,500. Little is being done in terms of restructuring these and many are on lifetime trackers, so it's hard to see what else can be done for them. Some are being let out which is fine, but others have owners sitting in them, mortgage and rent free.

The two year moratorium is well up and it's time the banks were kicked into action. They've no problem sending out tough lawyers' letters to people who tip into three-month arrears, but how about crystallising those with unsustainable and unimprovable debts?

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