# Surrendered BTL property but has not yet been sold by bank



## Peony123 (23 Apr 2021)

Hi there 

We surrendered a buy to let property in negative equity to the bank circa 2010.

The property was never sold and we can see from a land registry search that we are still the legal owners.

We have not had correspondence from the bank in many years until the end of last year when we received a letter from an asset servicing firm to say they had taken over servicing the loan on behalf of the original lender. We have since received a few letters reminding us that the mortgage is in arrears and asking us to contact them to discuss a proposal. 

The asset servicing firm have not bought the loan and the letter clearly states it is still with the original lender. The charge registered on the land registry folio confirms this - ie this charge is still in favour of the original bank lender. The letter also suggests that no receiver is in place.

We are now in a position to engage with a view to clearing the arrears and closing the mortgage, ideally through a sale of the property. The property is nearly worth the value of the mortgage and if there is a shortfall we will engage with the bank to address this.

My question is do you think the bank would, after all this time, agree to us selling the property and managing the sale process ourselves? Alternatively what is the likelihood of getting them to move ahead with selling the property? Is it possible they do not have a power of sale because they have not sold the property yet?

Also we are fairly certain the property has been let the entire time since the surrender. Would the bank have been collecting the rent - is that something they do?


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## NoRegretsCoyote (23 Apr 2021)

Peony123 said:


> Also we are fairly certain the property has been let the entire time since the surrender. Would the bank have been collecting the rent - is that something they do?


Receivers can collect rent although you suggest no receiver was in place. You can also search the RTB register of tenancies.



Peony123 said:


> We are now in a position to engage with a view to clearing the arrears and closing the mortgage, ideally through a sale of the property. T*he property is nearly worth the value of the mortgage* and if there is a shortfall we will engage with the bank to address this.


Otherwise I'm a bit confused. The house might be at the value of the mortgage, but there is the arrears too. It depends a huge amount on the interest rate (tracker or not) but even €100k at 4.5% compounding is going to be €162k after 11 years.


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## Peony123 (23 Apr 2021)

NoRegretsCoyote said:


> Receivers can collect rent although you suggest no receiver was in place. You can also search the RTB register of tenancies.
> 
> 
> Otherwise I'm a bit confused. The house might be at the value of the mortgage, but there is the arrears too. It depends a huge amount on the interest rate (tracker or not) but even €100k at 4.5% compounding is going to be €162k after 11 years.


Thanks for the reply. 

The letter states the arrears are circa €150k. We spoke to the asset servicing firm to ask them the full amount outstanding on the mortgage and they confirmed it was €310k. Would the full amount outstanding include the arrears?
Identical properties on the road are selling in the region of €300k - €310k.

cannot see any tenancy registered on the RTB for this property.


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## Peony123 (23 Apr 2021)

I have just reread the letter again - the arrears are stated as being €150k and then separately it states that the interest rate on the arrears is .09%.

My main concern is around how we can get the property sold so any information on this element would be much appreciated.


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## cremeegg (24 Apr 2021)

Just go to a solicitor and tell them you want to sell your house. It is normal where there is any type of mortgage that the bank must agree to the sale, if you clear the debt there should be no issue.


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## Brendan Burgess (24 Apr 2021)

cremeegg said:


> Just go to a solicitor and tell them you want to sell your house.



Eh, the OP does not own the house?  She has surrendered it to the bank. She can't sell it.

1) You could offer to buy the house from the bank if you have the money. 

2)  You could ask them why they have not sold the house.  They might need your co-operation, but it's likely to be just poor administration.

Brendan


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## Peony123 (25 Apr 2021)

Thanks Brendan - we suspect it is poor administration and so intend to follow up and see what has happened.

Thanks all for the thoughts.


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## Peony123 (25 Apr 2021)

Actually Brendan (or anyone) - would the bank have been collecting the rent from any tenant that has been in the property for the past couple of years since the date of the surrender?

The property is definitely occupied and was at the time of the surrender - would the bank have stepped in as landlords following the surrender even without the formal appointment of a rent receiver?

something else that has crossed my mind is this - if this property somehow fell through the cracks with the bank for a number of years (which seems possible as they are only chasing again on it now), then the bank may not have been collecting any rent. If a tenant stopped paying rent at some point and realised they were not being chased by anyone for it, then is it possible that tenant could have a claim for adverse possession? Or is my mind running away with me here! 

Lastly - if the bank were in fact collecting rent,  is it fair to assume that some of this should have been offset against the monthly mortgage payments (less bank costs etc etc)? 

Grateful for any thoughts.

And by way of very brief background - this situation came to be at a time when we were facing a myriad of life problems (both financial and non-financial). The size and severity of the other problems meant this was the least important issue at the time. We have very fortunately managed to come through many of these issues and now we are at a place where we can address this particular issue and hopefully come to a solution. I feel we appear careless in how we managed this situation but we did what we could at the time.


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## Brendan Burgess (25 Apr 2021)

It is very difficult to get adverse possession.  So don't worry about it. 

They might be making it very difficult for the bank to sell the property.

But don't run away with yourself.

Write to the bank or the asset servicers and ask for an up to date account since the surrender. Ask why they have not sold the property. And ask them to account for the rent received.

When you say you surrendered the house to the bank, what did you do?  Did you sign a form or did you just walk away? 

The bank might still consider you the owners. 

Brendan


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## Peony123 (25 Apr 2021)

We just walked away. Careless in hindsight but we are where we are.

That seems like a reasonable approach to pose those questions to the asset services. I will update if we make any progress!

Many thanks again - this is a super helpful resource.


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## Clamball (25 Apr 2021)

It looks like the bank, in the form of the agency, want to engage with you, so it is possible they “forgot” you handed in the keys. 

What are the advantages to you selling it yourself?  Do you think you will obtain more for it than the agency?   I suppose the first thing to do is determine the full amount outstanding, mortgage, arrears, less rental income and see where you are at.  Is it €310K or is there anything else you owe.  Had the rent been accounted for.  Will the agency give you statements going back to 2010?

 Or do you want to suggest sale immediately to prevent the bank from determining your ability to pay or not?


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## Peony123 (25 Apr 2021)

Total amount outstanding on mortgage is circa €310k - this was confirmed by the asset servicing firm when I spoke with them on the phone. Arrears are circa €150k, which have been building since shortly before the surrender up until now. Interest of .09% is being charged on the arrears. Would the €310k confirmed by the asset servicing firm include the interest on the arrears or would this amount be extra? One to ask them to confirm I suppose. 

There are no other charges etc that we are aware of. Based on the above information, are there any other charges that spring to mind?


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## SPC100 (25 Apr 2021)

From the facts stated, it sounds like ye are still the legal owners, and still owe the debt, and potentially ye should be collecting the rent!

Are the tenants the same as the ones you had in there in 2010? At this stage your former tenant may have moved out, and they may be charging and collecting rent from the current tenants!

Searching the RTB registration of tennancies sounds like a good idea, to see what information you can glean about the rental tennancy.

Is it possible to search court records using the house address? I think if the bank wanted to collect the rent they had to get approval in a court to collect the rent.


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## Peony123 (25 Apr 2021)

We want to control the sale process to ensure we get the best value for the property. We also want to get this done ASAP - if left to the bank we have no idea how long it would take for them to start the process etc. Ideally we would have this wrapped up in the next year to 18 months to start the clock running on the 5 years to clear our credit ratings.


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## Peony123 (25 Apr 2021)

SPC100 said:


> From the facts stated, it sounds like ye are still the legal owners, and still owe the debt, and potentially ye should be collecting the rent!
> 
> Are the tenants the same as the ones you had in there in 2010? At this stage your former tenant may have moved out, and they may be charging and collecting rent from the current tenants!
> 
> ...


I have had the thought about us collecting the rent - we haven’t been so that leaves the question of where is it going? Or has it been going anywhere?! Hence my concerns re adverse possession!!

We don’t know who the tenants are now unfortunately - the only way we could find out would be to call to the house and see!!

There is no tenancy registered at the RTB for this property. Do you what court the court order to collect the rent would need to be obtained from? District, circuit etc?


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## Brendan Burgess (25 Apr 2021)

Peony123 said:


> We just walked away.



Then the bank has not taken possession.  They would have needed to go to court to do so.

So you are an ordinary owner with 10 years' arrears and squatters.

Brendan


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## SPC100 (25 Apr 2021)

(I am not a professional in this area, so don't take my word for gospel)

I would imagine if the bank was renting it out, they would have the tenancy registered with the RTB. Registrations do expire, but it means that nobody is renting it out in an above board manner.

Do you have access to the bank account that the tenants were paying the rent into back in the day? You could get old annual statements, and see when/if rent stopped being paid into it.

Did you rent it out via an agency? or directly yourself?

I wouldn't call to the house yet myself, without knowing the legal situation etc.,

If you parked outside the house for a few hours, you could probably see if you recognised them?


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## Peony123 (25 Apr 2021)

Update - I have just searched the RTB again and it turns out there is a tenancy registered for this property - I didn’t search all the way to the end of the results the last time. So hopefully this eliminates the potential of a squatters issue. Looks like we need to get in touch with the asset servicing firm ASAP to fill in the gaps since 2010.


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## SPC100 (25 Apr 2021)

I think that makes it less likely to be a squatter/chancer, but It is not definitive.

It might be registered with the RTB by
-the bank
-the agency that rented it out originally (or did you rent it out yourself?)
-your original tenant
-a squatter/chancer

And the rental income might not be being paid against the mortgage.


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## Peony123 (25 Apr 2021)

if the tenancy at the time of the surrender was registered and then a new tenancy/tenancies came into place after the surrender, would there be multiple results showing?

The search is actually returning two results but one of them has a slight typo in the property address IE one says Green Hills Road whereas the other says Green Hill Road (fictional address for the sake of the example) 

My co-borrower managed the tenancy / letting side of things so I’ll need to ask them if they can remember if they registered the tenancy.


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## dereko1969 (26 Apr 2021)

Peony123 said:


> if the tenancy at the time of the surrender was registered and then a new tenancy/tenancies came into place after the surrender, would there be multiple results showing?
> 
> The search is actually returning two results but one of them has a slight typo in the property address IE one says Green Hills Road whereas the other says Green Hill Road (fictional address for the sake of the example)
> 
> *My co-borrower managed the tenancy / letting side of things* so I’ll need to ask them if they can remember if they registered the tenancy.


Sorry but this just screams to me that your "co-borrower" has been pocketing the rent for the last decade! Why only mention a co-borrower now?


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## Clamball (26 Apr 2021)

Is the co-borrower not part of the we on post 1?   I would think it straightforward to ask for statements for the last 10 years and you will see straight away if the rent is reducing the mortgage.

Maybe it is the way you are saying this but do you owe €310K capital plus €150K arrears?  €460K total. So if you sell the house for €310K you are going to negotiate on the arrears?  

I think now that you are engaging with the agent it should be straightforward to ask permission to sell and do it yourself.  But I would not ask that permission until you are fully clear on what the full liability is, if the rent is not being used currently to pay the mortgage, get that sorted first.  The only downside in engaging now is if you have say €200K in asserts and you get zero write down of the arrears.  You probably have a figure in mind that you would like to pay?


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## Peony123 (26 Apr 2021)

Co-borrower is absolutely not pocketing the rent and yes they form part of the “we” in the original post. They are not my spouse which is why I have referred to them as a co-borrower.

The total value of the original mortgage loan was circa €310k of which we have missed approx €150k’s worth of repayments, so the €150k represents the arrears figure.

Correct me if I’m wrong but you don’t add the amount of arrears to the total value of the original loan, otherwise you’re double counting a portion of the original loan. Your arrears simply refer to scheduled payments that you have missed and don’t change the overall amount due in respect of the original loan (apart from the addition of the interest being charged on the arrears). So in this scenario we have missed payments to the value of approx €150k.


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## Brendan Burgess (26 Apr 2021)

Hi Peony

Your understanding of arrears is correct.

If your mortgage balance was €200k and the interest rate was 5% and you paid nothing for 10 years, then you owe €325k today.

If they tell you that your arrears are €150k, this is simply a memorandum figure. If you pay them €150k, you will reduce the balance to €175k , which is the balance it would have been had you made all your payments on time. 

If you clear your arrears and the property is in positive equity, you are free to do what you want with the property. Keep it or sell it.

Brendan


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