THE National Asset Management Agency has four legal ways to overturn property transfers -- including transfers by developers to spouses, children and other third parties -- that it believes were aimed at defrauding current or future creditors.
Similar 'clawback' or asset- reversal provisions are found in various family, divorce, company and bankruptcy laws.
If a developer is bankrupt, transfers in the two years leading up to the bankruptcy can be set aside.
Transfers in the previous five years can also be set aside in a bankruptcy unless a developer can prove that he was solvent at the time he transferred or gifted the asset.
If property was transferred before 2009, NAMA can use the 1634 Conveyancing Act Ireland which allows property conveyances and other transactions to be declared void if they are made for the purpose of delaying, hindering or defrauding creditors.
If property was transferred after December 1, 2009, the 2009 Land and Conveyancing Reform Act allows for transfers to be set aside if there was an intention to defraud a creditor.
Finally, the NAMA Act itself contains a miscellaneous provision that gives the toxic loans agency powers to void transfers effected by debtors and those who provided loan guarantees, including personal guarantees.
Unlike the other set-aside laws, which require NAMA to prove that a developer was insolvent and that there was an intent to defraud, the NAMA Act allows the courts, following an application by NAMA or a NAMA entity, to set aside transfers where it is in a court's opinion that it is "just and equitable" to do so.
On a practical level, the issue of asset transfers is an integral part of the approval of developer's business plans by NAMA.
All business plans submitted to NAMA must include details of all property transfers and it is an offence to mislead NAMA.