Farm Ireland

Wednesday 12 December 2018

Repossessions of farm machinery 'to get worse'

Darragh McCullough

Darragh McCullough

Machinery repossessions have increased tenfold over the past 12 months as the banks turn the screw on farm contractors struggling with repayments. And things are set to get worse this year, according to Tom Murphy of the Professional Agricultural Contractors' (PAC) association.

"We dealt with 40 serious cases in the second half of last year," said Mr Murphy. "But 10 cases have already crossed our desk during the first two weeks of 2012."

He is also concerned that the crews that carry out repossessions are flouting the law.

"Farmers and contractors still have rights, even if they are in arrears on repayments," he said.

"For example, no repossession company can break locks or fences to seize machines. The lenders must also issue a termination notice which the repossession crews are obliged to show when they arrive to lift a machine."

Mr Murphy has been appalled by the scenarios that have been outlined to him by those affected.

"A call just this morning outlined how a repossession crew arrived at a contractor's premises without any official paperwork and proceeded to cut the locks on the gates only to replace them with new locks when they were finished."

Felix O'Regan, of the Irish Banking Federation, said many of these situations could have been avoided if there had been more "open and constructive engagement" between the parties involved.

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Mr Murphy also reminded contractors that the gardai have no role in repossessions unless they are acting on a warrant issued by the courts.

"Without these, their only role is to prevent a breach of the peace," he said.

At a series of meetings organised by PAC over recent weeks, contractors outlined countless cases of their machines being sold on for what they claimed to be a fraction of the market value within days of being seized.

Contractors are particularly aggrieved by this practice since it leaves them liable if there is any shortfall remaining after these sale values have been set against the outstanding machinery loans.

Often, machines are seized with implements and electronic equipment attached that don't belong to the lenders.

Peter Farrelly, a Meath-based contractor and president of the PAC, is encouraging farmers and contractors who feel they have been mis-treated by their banks to fight their cases.

Meanwhile, the PAC is also warning contractors to be cautious about engaging legal advisers who claim that they are affiliated to the contractor body. A number of contractors have been asked for several thousand euro upfront by these individuals.

Reports are also beginning to emerge of threatening phone calls being made to banks by people claiming to be PAC members.

"PAC is not in the business of trying to get people out of repaying loans," Mr Farrelly said.

"Our first priority is, where possible, to find a way to keep the contractor in business and work out a fair and mutually agreeable payment schedule with financial institutions.

"We do not condone bully-boy tactics in any shape or form. All contractors approaching us for help are seen and assessed by us and legal advisers are engaged only if necessary."

Mr Murphy appealed to anybody affected by repossessions to contact the PAC in confidence to assist in building a comprehensive overview of the extent of the problem.

Indo Farming