# Is guarantor entitled to refund& compensation in event of forced sale of properties due to overcharging



## zxcvbnm (30 Oct 2019)

Ok - so briefly.

- I had a half share in 2 buy to lets as well as one other property myself.
- The bank demanded sale of all properties a number of years ago when payments when to capital and interest (rather than just interest - was unable to meet the capital also).
- This resulted in high residual debt post sale of properties resulting in my Mother paying out €100k as she acted as a guarantor to that amount at   the time of getting mortgages.

The bank has since admitted causal of sale for the 2 buy to lets and as part of the mortgage redress has paid out compensation. (The other property owned only by me comes under the AIB prevailing rate cohort).

Obviously my mother was only acting as guarantor to fill €100k of the hole in the event of sale with big residual debt. But surely she should also be entitled to refund and compensation given AIB have admitted the overcharging was causal to the sale of the properties?

I'm assuming my next step should be simply to approach the bank and request the refund as well as compensation on her behalf?  Any thoughts / advice by anyone on this issue would be greatly appreciated.

Its a long story but we assumed the guarantee she signed was attached only to the property under the prevailing rate cohort and therefore not applicable to refund / compensation.
But I have had it confirmed just today by a solicitor that it was attached any residual debt due related to me personally. In my mind, surely that changes everything and this is a slam dunk as such?
I also think the bank should have included guarantors when determining impacted customers. Looks like they have not. But maybe that was naivety by me.


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## SaySomething (30 Oct 2019)

I would go with your qualified legal advice rather than what you can find on a public internet forum. Informed and all as we may be!


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## zxcvbnm (30 Oct 2019)

Well... the legal advice only relates to the fact the guarantor covers all debts from any property. It wasn't related to as to whether my mother would or would not be entitled to refund/compensation or how to progress such an argumemnt.

But my question here is, based on the clarification of what the guarantor covered,  how to progress from here in terms of raising this?
My own view is just simply approach the bank myself in the first instance and see what they say and if unhappy then take it from there with a solicitor if necessary. (The bank may well just volunteer up the refund as well as suitable compensation. ) Probably no need to approach with a legal representative at this stage? Or should I go straight to BDO perhaps?

I'm just being a bit paranoid and don't want to do the wrong thing, hence just sounding it out here. And also just curious if anyone else here had something similar happen , and is it the slam dunk i think it is.


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## Brendan Burgess (2 Nov 2019)

Hi ZX

Do I understand you correctly?

You were in deep arrears.
The bank told you to sell the three properties.
You , ZX, had a shortfall of €100k
Your mother paid this to the bank on your behalf.
The bank has admitted wrongdoing and has paid you, say,  €300k.

If I understand it correctly, it's not complicated:
You owe your mother €100k.

Look at it like this.  Let's say there was no guarantee in place.
You had a shortfall of €100k which you could not pay.
The bank would not have paid you €300k. They would have paid you €200k.

Brendan


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## Brendan Burgess (20 Oct 2020)

Hi ZX

How did this progress? 

Did anyone else in the Prevailing Rate cohort lose a property where the shortfall was made good by the Guarantor? 

What was the outcome? 

Should AIB pay €300k to the borrower and tell the borrower to sort out the guarantor? 

Or should they pay €200k to the borrower and €100k to the guarantor? 

Brendan


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