Bank receiving full mortgage and yet holding deeds

Some time ago I posted here about our predicament where the builder of our estate had gone bankrupt and we had not been handed the keys to the house and approximately half of the total sum was still due to be paid over by us.

This has finally worked its way through the system with involvement from liquidators, solicitors and others while we observed helplessly from the sidelines wondering when, if ever, we were going to get our hands on our house.
One significant point to note is that we have been paying a full mortgage on this property since last March.
In last month or there abouts we received notification that the various powers that be had settled their differences and we could go ahead and take possession of our house once the outstanding monies had been paid in full. All well and good but:
The house is not in finished (snagged) condition
There are outstanding utility bills and the utilities have been disconnected
We have legal bills arising out of our unwanted involvement in the process over the past 11 months
We have been paying out rent while waiting for our house. The house was contracted to be handed over December 2006
Finally, to make matters even more surreal, our bank that we pay our mortgage to were the ones holding the deeds to our house.
We felt and feel that we were entitled to some reduction in the outstanding monies, if only to put the house in saleable condition however, not only will my bank not even return my calls, but it appears that expensive legal action would be necessary to achieve what we believe what is rightfully ours.
The whole process is certainly biased away from the little guy as it appears that our only option is to cut our losses now and pay out. I would welcome any comments anyone may have even if it is just to say, "shut up and take what you can get"

Re: unfair it seems

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Brendan
Administrator

That is a horrible predicament to be in. How about ringing RTE/newspapers/Gay Mitchell I heard a couple in the news in the last few days who were in a purchasing chain gone wrong and the Ulster Bank came to their aid, with the help of a politician. Banks don't like bad publicity. You seem to have nothing to lose by going down this route.

First of all, my sympathies to you, for the emotional stress and financial hell that the last year must have been.

It is not clear from your post, why you have a problem with the bank, maybe you could clarify.

The bank hold the deeds of the house, but that it because you have a mortgage. The bank hold the deeds of my house and will do, until I pay off the mortgage.

It sounds like the builder is the one who messed you around, and that you may be entitled to compensation from, but as you say, this would involve more stress and expense and is not guaranteed.

Maybe I am missing something from your post that you need to explain a bit more.

I'm sure that this is all v.unpleasant (sorry for your troubles), but it is unusual that:

• The utilities were connected, used (incurring the bills) and have now been disconnected before you took possession - why are you liable for that? Surely ESB etc., are also creditors of the builder - not you?
• Why have you been paying a full mortgage on this place without taking possession? I thought the money is not released until all the snagging is done and the house is deemed to be in finished condition?
• You say that you had to pay over half the outstanding sum - does this mean you drew down the full amount of your loan and have cash of your own to complete the sale? I would have thought the best advice in this event would be to withhold money until either the house was complete and you could move in or some suitable reduction in price could be arranged and which takes account of the less than satisfactory state of the place?
• You're helpless I'm sure in the sense that the bankrupcy process is brutal and you have to shout loud to get your due - look at the banks scrambling to get their bids in against the solicitors - but you are a creditor because the builder can't complete the contract you agreed. Did your solicitor not keep you advised at each stage of the process to enable you to make decisions about the most advantageous outcome, given the builder's liabilities and what was likely to happen?

I believe that the rent you had to pay is not something that you can do anything about - unless you had been able to factor this in as part of a negotiated reduction in the price of your house, bearing in mind the breaking of the contract with your builder.

I think you're barking up the wrong tree by going to the bank - which is one possible explanation why they don't return your calls. As far as they're concerned, I'm sure they see that they have legitimately lent you a sum of money to buy the house and you're paying a regular mortgage - which means you can't have your deeds until you pay it off.

It sounds like you were poorly represented in this process and the current problems are related to the breaking of the contract of sale by the now out-of-business builder. I don't know what comeback you'll have but I'd be back hammering the solicitor's door seeking a full briefing on the current legal position on all these matters.

Many thanks for your responses, let me clarify a few items.

Yes I have a major problem with the builder but with him being declared bankrupt, I am most definately at the back of a long list in terms of getting compensation. However, there are a number of plusses from the very start' we had paid our deposit, signed the contract and had the builder sign it and paid over the final stage payment, the land on which the house was built was signed over into our name and the house had been stamped in our name.

The reason why I have a problem with the bank is the following:

When the receiver was called in, the pigs jostled at the trough to get their share, I or my solicitor couldn't get so much as a response from them.
When they were finally satisfied that they were ready they said that I could then take possession of the house when I paid over the same amount that had been due 10 or 11 months earlier. The house is no longer in ready to hand over condition, not least because there are no utilities.
The reason why all the utilities were connected (and running up bills) was that I was within a gnats whisker of actually moving in but for some very bizarre goings on from the builder before he went bankrupt.
I am paying a full mortgage because we drew down in preparation for moving in 11 months ago but as I said, that option was taken away at the last minute.
It is only by coincidence that it is the same bank who I am paying the mortgage to and who ended up as the main creditors of the builder and so I am in the (I think) ludicrous situation of paying a full mortgage to the same company who are stopping me from moving in.
Lets face it, this is the company who made the mistake of loaning money to a bad risk and now expect me to help compensate them.
I am less worried about the lost rent (its annoying but I have my health kind of vibe) but this bank is effectively saying, take the place or take us to court. Now I'm no shrinking violet and I would go to court in a second to wipe the smile of these guys faces. However, I don't want to put my family through another 6 months of uncertainty and still have to shell out if we lose.
I just want to be clear here, I am not looking for the bank to make up for the trauma of this episode. I want them simply to absorb the costs to make my house liveable, ie bills (after all, no matter what went on before, they are still selling me a house) and any outstanding snags and the costs associated with delays caused by them.
Finally Paulone, I am very interested in your final comment. We felt that the contract was broken when the builder did not deliver the house on the final date for delivery (Dec 2006). I have long been disappointed by the level of interest shown by our legal representation and logic suggests to me that you are correct. However, I tried to get further information from the citizens advice bureau but they will not talk to me as I already have a solicitor......go figure!!!!!!

Can I clarify what I think is happening here?

You've been unfortunate enough to have been caught in a nasty bankruptcy situation. The builder is gone and his bank are selling as owners of his business?
You have bought the site with a mortgage from, as it happens, the same bank. You have also drawn down the full mortgage although you have not paid over the full amount to the builder/bank ( as receiver)?

You could have paid back a section of your mortgage to your bank so that the funds would not be sitting in your account costing you but you didn't.

"Lets face it, this is the company who made the mistake of loaning money to a bad risk and now expect me to help compensate them."

I know this makes you cross but really legally there is no connection.

What your situation shows more than anything else is just how badly things can go wrong when they go wrong and how a consumer can end up in a horrible legally difficult situation. It is very unfortunate but had you ever sat down and thought " ok, imagine this all went pear -shaped - what could we do?" - this is pretty much the scenario you would have found yourself in.

You are entitled to some allowances for putting the house in a finished condition and I assume you have had an engineer look at the property and cost the works. It is not the banks fault that the builder went bankrupt and they have no obligation to you for any costs associated with the delays which are , unfortunately, the consequences of a commercial disaster.

Finally, I have great sympathy for my own clients in circumstances like this but as a long time practising solicitor, I have long since stopped accepting responsibility for these situations. Its unfortunate, you've been unfortunate but I'm not sure just what you think your solicitor should have /could have done for you?

My advice - take a deep breath, try and negotiate your way into your house at some discount - if you can- and then treat it as one of life's lessons. Some people sale through life - some get knock backs like this - all part of the rich tapestry..........Much of which ends up on my desk on a regular basis.


mf

mf

thanks for your response,
Can I clarify what I think is happening here?

You've been unfortunate enough to have been caught in a nasty bankruptcy situation. The builder is gone and his bank are selling as owners of his business?
You have bought the site with a mortgage from, as it happens, the same bank. You have also drawn down the full mortgage although you have not paid over the full amount to the builder/bank ( as receiver)? ***100%correct***

You could have paid back a section of your mortgage to your bank so that the funds would not be sitting in your account costing you but you didn't. ***I'm sure you would advise your clients thus, my solicitor didn't advise me this was an option. Its clear to me now that this would have been a good move but I dont have the benefit of experience of conveying houses***

"Lets face it, this is the company who made the mistake of loaning money to a bad risk and now expect me to help compensate them."

I know this makes you cross but really legally there is no connection.***correct but the world isn't always run on strictly legal terms, if it was, I would have had my house by now given that the house was overdue three months before the builder went bankrupt. In the case of the bank, good customer service would often dictate that there isn't such a blatent shafting of a customer for what is small amount in terms of their overall loss but a large proportion of my net worth***

What your situation shows more than anything else is just how badly things can go wrong when they go wrong and how a consumer can end up in a horrible legally difficult situation. It is very unfortunate but had you ever sat down and thought " ok, imagine this all went pear -shaped - what could we do?" - this is pretty much the scenario you would have found yourself in. ***I dont think things have gone horribly wrong, I think I have been quite lucky in fact. I at least will still have a house, there are others who lost a lot more than me. However, I am making a case for how the so called ordinary joe will always come last while the housing market continues to be run the way it is. As for sitting down and foretelling this, I'm not sure I'm clear on what you mean***

You are entitled to some allowances for putting the house in a finished condition and I assume you have had an engineer look at the property and cost the works. It is not the banks fault that the builder went bankrupt and they have no obligation to you for any costs associated with the delays which are , unfortunately, the consequences of a commercial disaster. ***I think I have been quite clear that I am looking for no more from the bank than a house in the condition in which it should be handed over. Great institution that it is, they now no longer answer my calls or emails. Any allowances, as you put it, require me to take the bank to the circuit court requiring said fees as well as barrister fees and as you know, that will probably start in the region of 10k. 10k to spin the wheel***

Finally, I have great sympathy for my own clients in circumstances like this but as a long time practising solicitor, I have long since stopped accepting responsibility for these situations. Its unfortunate, you've been unfortunate but I'm not sure just what you think your solicitor should have /could have done for you? *** You have no idea what my solicitor did or didn't do for me, I don't think I have at any stage criticised my solicitor. However, your desire to blindly defend him/her is interesting***

My advice - take a deep breath, try and negotiate your way into your house at some discount - if you can- and then treat it as one of life's lessons. Some people sale through life - some get knock backs like this - all part of the rich tapestry..........Much of which ends up on my desk on a regular basis. ***Life isn't fair but as I said, I have a lot to be thankful for, however, it doesn't take away from the fact that it is outrageous that I would have to pay a small fortune to go to court becaues my own bank won't pay the utility bills or conect the utilites in the house they are selling me.***

Thanks again for your comments

Hi Lemonhead,

I can't offer any advice but you have my sympathy. The situation sucks and I agree with you that the little person always seems to be the one picking up the pieces when these things goes wrong. As someone who bought a new house during the boom years it amazed me how one sided the legal contract was towards the developer despite my protests. And before the solicitors start screaming, I know I could have walked away but I got two solicitors' advice and both said 'Thats just the way it is'. I am hoping that this new property environment will even things up a bit and the buyer will be able to negotiate extra rights for themselves.

Reminds me a bit recently of that couple whose mortgage wasn't paid off by that solicitor when they sold the house. They did nothing wrong and yet were left in limbo and potentially without a house by the system until they went to the media and Ulster Bank stepped in and showed some goodwill. People shouldn't have to go to Joe Duffy to get people to do the right thing in a reasonable timeframe. Actually people should NEVER have to go to Joe Duffy!!

In defence of MF1, I think he may have been referring to the comment:

"........I have long been disappointed by the level of interest shown by our legal representation"

which does not really square well with:

".......I don't think I have at any stage criticised my solicitor. "

MOB, another sensitive solicitor? If that is criticism, its a wonder solicitors can face work in the the morning with whats being said about them. My response stands, mf1 knows nothing about our situation but yet chose to defend his profession. For some reason you feel the need to jump in and point out the same........whats your motive. I haven't done anything wrong, why do I deserve this from someone like you?

".........its a wonder solicitors can face work in the the morning with whats being said about them."

Certainly we don't do it for the plaudits. And in recent years not for the money. Of course there's justice; we're passionate about that.

MOB are you getting justice by putting me in my place?

and as for the rest of your hijackking of my post, don't make me laugh!!

Two posts is hardly a hijacking. If you don't want to receive a diverse range of comments about your predicament then maybe you should not post on a public discussion forum?

OP - can we go back to the utility bills. Were they in your name? If not you don't owe anything.

Lemonhead, I have read your difficulty and in the first instance I sympatise with you. From what you write you are somewhat lost in the direction you should take. From reading you are the legal owner of the land where the house was built. If this is the case and if you are paying the mortgage, no body can touch the land. The fact that the same Bank is a lernder to you and the Builder are two separate transactions.

The house is built on your land -- unless it has wheels i don't think anyone can touch it. If the Bank are stung by the builder, they are a preferential creditor after the Revenue. To have you complete on the house in a semi finished condition will allow you do a deal. In the present market conditions you should be able to negotiate in your favour. The last thing a Bank needs now is a half built house built on somebody elses land.

If the Builder has gone into liquidation you might be lucky. The liquidator normally acts in a fire sale manner. Offer him a figure that suits you. Nothing better and Nothing worse.

As for the Utilities, its not your problem. Get an exact cost of getting these right to be operational and take into account when making an offer.

Finally if the Bank are making a complete pig of the thing and refuse to speak with you, lodge an official complaint with the Bankers Federation.This will get them moving and they will be forced to speak with you. I am sure of that.

As for the legal profession - it's like all other professions, There are good and bad. I use the biggest - very expensive, but when you have a problem, they will go hell bent to sort the matters out within the confines of the law, which is the manner you should approach this but with a very hard neck.

Best of Luck.