Thursday 17 October 2019

'Do we legally have to pay for works in our block to be carried out?'

Our property finance expert answers your questions

The Ryan Review

Email your questions to siryan@independent.ie

Q We live in an apartment below a duplex which we bought new in 2006, one of 20 apartments and 20 duplexes. Last year we were told there was inadequate fire protection in the attics and we would have to pay for the repair at a cost of €1,750 each. We don't have access to this attic as they are in the duplexes. Our question is do we legally have to pay for these works to be carried out? I understood that common areas are accessible and usable to all. We also have to pay for six of the duplexes that are now with the banks. What are our rights?

A This is certainly a tricky one. Pay up, and you're subsidising others; refuse to pay and you could lose services or rights.

I asked Stephen Faughnan of the Irish Property Owners Association for his view.

"Many apartment owners, unfortunately, find themselves in a similar situation. As an owner of an apartment you are part of the management company and have rights and responsibilities. These are detailed in your lease/title agreement and will include your obligation to share the cost of repairs to the structure. Fire safety in this case is a structural issue and of concern to everyone in the building. While in some cases insurance or "sinking funds" would normally be used to defray the costs, it does appear that this is not the case and the short answer is that you will have to fund this work to bring the building up to safety standards. With regard to the bank ownership of the six units, they too are owners and must participate in the requirements to repair. Not to do so would seriously diminish the value of their asset so you should ask the management company to bring clarity to their contribution. Therefore, it would appear that you and your fellow owners are in a bind and have to make the required contribution."

QI purchased a property in 2008 prior to meeting my husband. I took out a life insurance policy to cover the mortgage in the event of my death. Last year when doing a financial review I was advised to change the life insurance policy to include my husband on it so the mortgage would be covered in the event of either of our deaths. I cancelled my individual policy and we took out a joint policy which is decreasing but would cover the outstanding mortgage. After we married in 2011 I never contacted the bank to have him added to the mortgage/deeds - would this pose a problem from an insurance perspective and any payout in the event of his death? I don't know if this is relevant but we subsequently jointly bought another property in 2013 with joint mortgage protection with the same insurer.

A For a mortgage on your principal private residence, its compulsory to have life cover in place but differing banks have differing requirements; some only require evidence of cover at outset depending on loan size, most insist on having an assignment on the policy.

Mike Knightson, certified financial practitioner with KM Financial, says that regardless of the bank's requirements, covering both your husband and yourself is a wise move, and there is no insurance problem as a result of taking out this cover, only a moral dilemma.

"Where it could get complicated is that if the new policy is not assigned to the loan, in the event of you dying the mortgage would have to be redeemed but as beneficiary of the life cover, your husband could choose not to pay back that mortgage, keep the pay-out and move to your second property which would be debt free. This is a hypothetical situation but possible.

Another complication is that, if your husband dies, the mortgage theoretically would continue, as he is not associated with the loan, unless you chose to redeem it. Depending on your wishes I would suggest having a chat with your solicitor to ensure everything is in order."

 

AIB has written to thousands of mortgage customers with a 'new' offer to avail of a lower mortgage interest rate if their loan-to-value ratio has improved. It would result in savings on interest repayments as the bank is at less risk with lower LTVs.

Not only is it not a new offer; it's not even new to them.

The truth is that most banks are willing, most of the time, to renegotiate interest rates when the value of the asset backing the loan improves. All boats are currently rising in the tide, so the mailshot is no more than a little good natured PR.

In fact, Permanent TSB, KBC and even Bank of Ireland have the same 'offer' in place, in some cases they'll even send out the valuer for free, but the take up from customers has been abysmal.

Why? It's anybody's guess, but if this column is any indicator, it has received a number of enquiries wondering if it's a scam, or what the catch is. It's not, and there isn't one.

Banks only have themselves to blame for such suspicion, and it's not out of charitable instinct it's being offered (shoring up customers is key). Better in your pocket than theirs, I say.

 

AIB has written to thousands of mortgage customers with a 'new' offer to avail of a lower mortgage interest rate if their loan-to-value ratio has improved. It would result in savings on interest repayments as the bank is at less risk with lower LTVs.

Not only is it not a new offer; it's not even new to them.

The truth is that most banks are willing, most of the time, to renegotiate interest rates when the value of the asset backing the loan improves. All boats are currently rising in the tide, so the mailshot is no more than a little good natured PR.

In fact, Permanent TSB, KBC and even Bank of Ireland have the same 'offer' in place, in some cases they'll even send out the valuer for free, but the take up from customers has been abysmal.

Why? It's anybody's guess, but if this column is any indicator, it has received a number of enquiries wondering if it's a scam, or what the catch is. It's not, and there isn't one.

Banks only have themselves to blame for such suspicion, and it's not out of charitable instinct it's being offered (shoring up customers is key). Better in your pocket than theirs, I say.

Indo Property

Editors Choice

Also in Life