Saturday 21 September 2019

Home Economics: Our property finance expert answers your questions


(Stock image)
(Stock image)
Sinead Ryan

Sinead Ryan

Question:My wife passed away and we have no children. My home is worth perhaps €400,000, and I have around €25,000 in the post office. I live more or less on my pension, which is €16,200 including the old age pension. My wife's death has brought my own mortality into focus. I am 79 and while I have five nieces and nephews I would certainly leave something to, I would prefer my house to be left to a charity where it could be used to house people in need. How would one go about this?

A The first thing is that you can leave your estate to anybody you wish, and in any proportion you wish. To do so, it is absolutely essential that you make a will, if you have not already done so. Many couples make a will simply leaving everything to their spouse, but with your wife's passing, it is time to re-do it. You also need to nominate an executor so that your wishes are carried out. This may be one of your relatives, but cannot be the same person who witnesses the will.

In terms of the charitable bequest, I'd advise you to do a little research. You seem to have a very specific desire about the use of your home, and it is perfectly alright to include this in your will, however it may be beneficial not to be too circumscribed about it as it may be the case that the money your home realises can be put to better use than the property itself, which could get caught up in legal wrangling. Your solicitor will help with this, but you could leave, say, a percentage of your overall estate to the charity, or specify that the proceeds from the sale of your home could be bequeathed instead.

A conversation with the Community Foundation of Ireland (, call 01-8747354) can direct you to specific local projects where your bequest would be of use. I also recommend you ensure the charity is authorised and compliant. The Charities Regulator can be reached on (01) 633 1500.

Q My friend and I are buying a house together. We are advised to have a declaration of trust drawn up to take account of the fact that I am contributing the whole of the deposit, which is €43,000, and we have agreed to split all the legal and stamp-duty fees. It is our intention to live there, but also rent out the third bedroom and I am to keep the rent on this in return for my investment. When we are both in a position to move on, we plan to sell the house and split any profit 50/50. Is there any legal impediment to doing this or is there a better way?

A There's nothing to stop you, although the plan is a little complicated. Solicitor Susan Cosgrove says: "A co-ownership agreement will cover off the contribution of the deposit by you should the property be sold down the line. It will also set out the repayment of this deposit from the rent as you have suggested. It is always advisable to draft such an agreement when buying with friends to prepare for future events such as a sale, buy out, etc."

I would add that it's vital to keep financial records of all transactions - don't deal in cash from your tenant, use a rent book - as much for your own protection as theirs - and remember that, as a landlord, you now have responsibilities. If you are letting out the room on a long-term basis (not via Airbnb or similar short-term holiday sites), you could avail of Revenue's Rent-a-Room relief, which allows you earn up to €14,000 a year tax-free and you do not need to register with the Residential Tenancies Board.

How this will affect your contract with your friend should be decided - do you get the entire amount, in which case it will 'pay off' your contribution sooner, or are you to put some of it toward the cost of keeping a tenant - paint, furniture, etc?

Whatever you decide, make sure it's all laid out in writing. The best of friends can fall out at a later stage and you certainly don't want to end up in a "he said/she said" misremembering of the facts.

* Email: to send your questions to Sinead

The Ryan Review

‘Retail credit’ and ‘credit servicing’ firms are much nicer names than ‘vulture fund’. A ULO, or ‘unregulated ‘oan owner’, not so much, perhaps.

The recent Central Bank’s report which looked into the activities of all three found everything going swimmingly. So that’s good.

It found that owners of distressed mortgages were engaging with their new-found clients, honouring existing arrangements and protecting borrowers in arrears. They’re even doing better deals than banks, in many cases, because they don’t have to worry about things that cause bankers sleepless nights, like the ‘moral hazard’ of giving one borrower a break but not his neighbour.

Some 116,000 mortgages are currently in restructured arrangements and 87pc are meeting their new terms, we are told.

However, there are some key phrases that bear examination. For instance, the good news is predicated on, and only on, borrowers “whose circumstances are unchanged”.

That sounds benign enough, but in reality even the slightest change in ‘circumstances’ can, in fact, cause a profound reassessment of the loan and become a trigger for more robust, ahem, engagement, and even repossession. The report concludes that mortgage-to-rent is still an option. Which will come as a surprise to most of us.

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