Monday 23 September 2019

Home economics: Sinead Ryan answers your property questions


A fallen tree on Northbrook Road, Ranelagh, which was blown over during Storm Ophelia.
A fallen tree on Northbrook Road, Ranelagh, which was blown over during Storm Ophelia.
Sinead Ryan

Sinead Ryan

My neighbour's tree crashed into my garden during Hurricane Ophelia, damaging a wall and part of my garage. I approached him about getting his insurance details for a claim but he told me he doesn't have any, it was an 'Act of God' and he's not responsible. I thought house insurance was mandatory. I've had to contact my own insurer now and my premium will probably go up. Can I do anything?

A. Damage caused by Ophelia is expected to run into hundreds of millions of euro for insurers, so in any event, it's likely that everyone's premiums will be going up. House insurance, unlike motor cover, is not mandatory; the reason you may believe it is, is because banks insist you have it when you take out a mortgage, but there is no legal requirement to do so if you have no mortgage.

Going without is obviously risky, but some people think it will save them money.

You were right to call your own insurer. Your wall and shed will be repaired, and it will be up to the insurance company to decide whether action can be taken against your neighbour. If they believe he acted negligently, or the tree should have been cut back, or was in some way causal of the damage with or without the storm, then they will pursue him legally for this.

Good neighbours are more important than an insurance claim. His dismissal of your plight is unfortunate, but if he is responsible (and it's unlikely), then let the insurer go after him.

Q. I ran into financial problems in the recession but I'm almost back on my feet, albeit with a sustained period of mortgage arrears (at €14,000 in April). My plan was to get a tenant to help defray it, and I incurred expensive renovations. I told the bank this and my payments resumed at €690 pm. My house is worth €520,000, with 10 years left on the mortgage. I owe €90,000 including the arrears so am very much in equity. The bank keeps demanding the arrears in full and pushed ahead with repossession. Three days before the court date, they said they'd defer if I increased my monthly payments to €850 for the remaining term. I asked to extend the term - at 49 there's no age issue - but they refused as they claim I can afford it. I disagree. I am really against the wall and have pared back every other expense. I would borrow to repay, but nobody will lend to me. We are back in court shortly. Is the court empowered to order the bank to accept my existing payments/extend the term? The banks says the arrears are now an unexplained €17,000.

A. You've been through the mill. This is a question of income dispute, I think. The bank is challenging your disposable income levels and believes you can afford higher repayments, presumably based on the various Standard Financial Statements (SFS) they would have made you complete.

Tom Murray, a personal insolvency practitioner with Friel Stafford, says: "Our experience is that there is no consistency between the various courts as to how repossession cases are treated. Some courts are simply more sympathetic to borrowers than others.

"Technically, there is a risk that the court could grant a re-possession order as there are significant arrears on the mortgage. If you cannot reach agreement with the bank, then you have the option of doing a Personal Insolvency Arrangement (PIA). Banks generally allow more Reasonable Living Expenses in an informal restructuring than under a PIA, as Reasonable Living Expenses are rigidly defined in a PIA, and they are very frugal, and thus you could end up paying more for the mortgage.

"In this case it appears that the bank has assessed your surplus income over your Reasonable Living Expenses to be more than what you believe it to be. My advice is to engage with the bank and try and reach agreement on your Reasonable Living Expenses."

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