Monday 24 September 2018

Home economics: Sinead Ryan answers your property questions

 

Sinead Ryan

Sinead Ryan

My former partner and I bought an apartment together in 2005 on a 35-year tracker with EBS. We have since split up and I am now married and living in the same apartment with my wife. I want to buy my ex out, and put the apartment jointly in mine and my wife's names. My ex is fine with this, but can I hold on to the tracker?

Sinead replies: All banks, including EBS which is a sister company of AIB, have been tasked with reducing their tracker books. Trackers are loss making and the need to dump them is overwhelming, so it's incumbent on lenders to employ whatever means they can to shift customers away from them and on to profit-making fixed and variable rate mortgages.

Some went overboard with this in the past, and we know from the still-emerging tracker scandal that those customers whose contracts clearly specified they could return to a tracker after transferring to a fixed rate for a period, were not allowed do so. This caused an expensive mess for the banks.

Legally, there's nothing wrong with what you are proposing. Properties change hands all the time, and an amicable buy-out of your ex's share isn't the issue as long as you can agree on the portion, price etc, and your finances are in order. I note you are not seeking to increase the mortgage to do this, so that certainly helps.

However, the very act is technically a breach of contract, since a new borrower (your wife) is joining the loan, and the original borrower (your ex) is coming off it.

I checked this with EBS where I was told it is not its policy, generally speaking, to move people off trackers in such an event, so this is great news. It's a fairly common incidence after say, divorce or the death of one of the parties to a mortgage; so they have structures already in place.

What they will need to do however, is ensure that the overall ability to repay is maintained; ie, that your wife's income levels are sufficient to maintain payments on the loan, compared to that which pertained when it was effected with your ex. So all things being equal, you should be able to hold on to the tracker. The process itself is a legal one, so liaise with the bank on how best to proceed.

Q. I availed of the Home Renovation Initiative to insulate and put in double glazing into my old house before deciding to sell it in 2016. It cost around €10,000. I'm now in another house and I am hoping to extend the kitchen. My question is, can I avail of the scheme again, or is it a once-off incentive?

Sinead replies: The good news is that you can. However, this is subject to the limits of the tax rebate, the maximum of which is €4,050 based on works costing €30,000. Revenue tells me: "The maximum tax credit of €4,050 could apply to the second property as long as all conditions/criteria are met and the second property is the principal private residence of the individual/couple."

I'm assuming it is indeed your home to live in, but in any event, the HRI scheme allows rental properties to also qualify, within certain criteria. It is envisaged the scheme will end on December 31 this year, so it's worth getting the work completed sooner rather than later. Since you've been through it once, you'll know to only use registered contractors and the forms to complete are on revenue.ie.

Most people don't realise the works that are included in the scheme, but new windows to garden landscaping all qualify. The disallowed costs are professionals who charge VAT at 23pc (eg architects, designers etc), and any white goods or decorative extras you buy yourself. The VAT rebate is payable over 24 months from completion of the work.

The Ryan Review

Whenever I feature questions on this page or comment here about rogue landlords - the ones who give everyone else a bad name - I get angry emails from the ones who are compliant, or who have had awful tenants to deal with themselves and terrible stories to tell. So, clearly there are bad apples on both sides.

That said, the news that Minister Eoghan Murphy is to introduce legislation which makes it a statutory offence to rip-off tenants with rent increases outside of the Rent Pressure Zone limits, is welcome.

Not because the majority of landlords are rogue at all, but because it should have been done at the time rent controls were brought in. Expecting a body to self-regulate in a profit-hungry market is naïve at best. It didn't work with banks, it doesn't work in many businesses, and sadly, laws that carry hefty fines or even prison sentences can often be the only deterrent to bad practice.

The Rent Tenancies Board is supposed to police all this stuff but it is (a) dreadfully slow, under-resourced and cumbersome and (b) relies on tenants already desperate for accommodation and willing to put up with sub-standard and illegal contracts, to complain. Crucially, the new law will allow the RTB to investigate property owners where a direct complaint has not been made by a tenant, who may be frightened to so do. Opposition naturally, will come from landlord organisations, but I wonder what resistance Mr Murphy might get from his political colleagues - many of whom are, of course, themselves landlords. But they're the good kind, right?

Indo Property

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