Feeling ripped off by council

Thinkingaboutit

Registered User
Messages
9
hi all fellow af home owners,

Just wondering if anyone has encountered the same rip off as me?

I bought a 2 bed af apart in 2010 and was told by council (then valued by bank based on other sales in complex) that it was at 20% below market value.niave and desperate at the time to get on the property ladder (tick tock of the bio clock) my hubby and I were delighted to avail of this supposed fantastic opportunity. However, years later maturity has set in. I hope I can explain this clearly enough....we were told the apart was 20% below market value,therefore when we sell before ten years we owe the council 20% of overall sale price. I have no problems with that, what I do have a problem with is the fact that they provided me with an apartment vastly different to other apartments in the complex which they set the valuation of 20% lower against. My apart is of a much lower standard in comparison to the private aparts that it will never come close to the prices they sell for. Here is a list of how different it is:

1. Smaller is size by approx 10m squared
2. No en suite
3. Storage heaters instead of gas supply
4. No built in storage
5. No integrated appliances of fridge, washing machine, oven, hob , dishwasher that was provided with aparts selling privately.
6. Common areas with electric boxes exposed
7. No electric shower
8. Kitchen units white high gloss instead of solid wood
9. Smaller balcony
10. Electric sockets with no on off switch

Now my problem is we need to sell. Two boys with no garden equals parents slowly loosing their minds. If we are to sell now, it will sell for €195,000 (evaluation by estate agent x2) having bought for €158,000 all the increase in price will go straight back to the council. However, other apartments that are not af are selling for €220,000. This is a vast difference that highlights how the council fobbed me off. I would have no problem selling for that price if the others were but it's the principle behind it. I have to fork out 1.5% in estate agents fees just to give the council their undue profit, it doesn't seem fair. They sold me an apartment based on lies. It was never 20% below market value, 10% at the most. Now I have to sell and hand the, back nearly €40,000 by essentially being tenants that ploughed moneyinto upkeep and management fees.
 

Leo

Moderator
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10,290
Why did you not clarify all that at the start? What advice did you take at the time?
 

peteb

Frequent Poster
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1,650
So basically you got a lower spec apartment for a lower price? And you are complaining because you cant sell it for the same price as the people that paid more than you anyway?
 

Branz

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855
what I do have a problem with is the fact that they provided me with an apartment vastly different to other apartments in the complex which they set the valuation of 20% lower against.
How can you prove that?, same below: serious allegations.

They sold me an apartment based on lies.
My experience of dealing with this stuff is that the 20% market value is off the market price of the apartment you are buying, not the private ones in the same complex.

The other question is would you have got on the ladder at the 20% higher?
i.e. could you have borrowed 200K?
What interest rate did you pay? I suspect it was less than bank rate?
Is it linked to tracker rate or full variable market rates.
 

Thinkingaboutit

Registered User
Messages
9
Hi everyone ,

Thanks so much for responses. I really appreciate all feedback.

Why did you not clarify all that at the start? What advice did you take at the time?
I had it clarified by the council selling the apartment that based on other apartments in the complex selling at €198000 that is where they got their 20% off from. As I was completely new to the area, I just took them at their word that other apartments in the complex were the same. I also paid off 1% in cash for "bigger" size. I thought a local authority could be trusted. I also wouldn't and still don't know who else's advice I could have sought. I wish I had have investigated further but I was just so blinded by lust!

So basically you got a lower spec apartment for a lower price? And you are complaining because you cant sell it for the same price as the people that paid more than you anyway?
I'm not complaining about paying less or selling for less. I have no problem at all selling breaking even, it has been my home for 6 years, I was never in it to make a profit. My issue is with the council profiting from the thousands I have put into the apartment on top of the fact they sold me an apart that was never to the standard of a full 20% below market value.

Hi Branz,

I am really not making allegations, everything I listed are the differences between the apartments in the complex and mine and are facts not allegations. I have luckily made a few friends in the complex that is why I know about the differences I have listed. Even if I go onto daft, I can view the differences. Others that bought af have all discussed how the builders built to a lower spec to save money but I'm not going as far as saying that.
I could have gotten a mortgage for 200k but the problem with us was the deposit, we just didn't have it, had been trying for years to save but the old saving vs rent issue meant we had a total of €5k after 6 years.
I'm not on a tracker, just completely normal mortgage. They had done away with any specials by the time I arrived on the scene. I have a normal variable mortgage with EBS.
 

peteb

Frequent Poster
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1,650
I'm not complaining about paying less or selling for less. I have no problem at all selling breaking even, it has been my home for 6 years, I was never in it to make a profit. My issue is with the council profiting from the thousands I have put into the apartment on top of the fact they sold me an apart that was never to the standard of a full 20% below market value.
But that would have always been the case that you would owe the council 20%. Every dog on the street knew that and was happy to take it as they were getting cheaper properties.
 

pinkie123

Frequent Poster
Messages
259
In your position, I would think myself lucky not to be in negative equity. Would you have a problem being in one of the "better" apartments knowing your neighbour got exactly the same spec for 20% less? Kind of looking a gift horse in the mouth here. The AH system has been completely abused by some - renting out etc. when not meant to. Cut your losses, forget about it and sell your apt and move on. Enjoy your new house.
 

Thinkingaboutit

Registered User
Messages
9
But that would have always been the case that you would owe the council 20%. Every dog on the street knew that and was happy to take it as they were getting cheaper properties.
I know what you are saying peteb about the paying back the 20% but I just feel that the differences between my apart and the others in the complex makes it too difficult to wait out the clawback time. I know I want a garden but if I had the space, storage, extra bathroom, a proper balcony (instead of standing space) perhaps I would be able to stay longer. I just feel a bit disgruntled that the 20% is not the discount I got at all and now I have to pay it regardless.
 

peteb

Frequent Poster
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1,650
But that's just a mindset. As people have said, consider yourself lucky to not have to deal with negative equity which a lot of people who bought social and affordable apartments from the Co Co still have to contend with.
 

Thinkingaboutit

Registered User
Messages
9
Yes I agree that I am lucky not to be in negative equity, anyone who bought in recent times is lucky not to be.

However my point and questions over this remains the same. If I had been sold the property by the council at the true discounted rate of 20% (this derived from them in comparison to other apartments selling at the same time in the complex) in 2010 surely my apartment should now be selling at the same price as others are now not €25,000 less due to the lower spec.

In summary:
Private Apartments were selling for €195,000 in 2010
I bought off council for €158,000 in 2010 at 20% discount
Please see list above of lower spec for my apartment and explain how that is a true 20% reduction.



Would you have a problem being in one of the "better" apartments knowing your neighbour got exactly the same spec for 20% less?.
I wouldn't have a problem with that and how I know I wouldn't is that I have a son in Creche that I pay €895 a month for, other children are in the same amount of time and parents pay €40 weekly. I could waste my time begrudging that or just not care and I chose the latter. The way I view it, my son has the best care, that's what matters.
 

Sarenco

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5,591
I'm struggling to see why you're feeling sore.

If I understand the fact pattern correctly, you got an apartment for €158k in 2010 without putting down any deposit. You now get to walk away free and clear - no gain, no loss.

The monthly mortgage payment on €158k @3.7% (the current EBS variable rate for LTV's over 80%) over 30 years is €727. I would expect an apartment with a market value of €195k today to rent for around €1,250 per month - maybe more.

Unless I'm misunderstanding something, it sounds like you got an absolutely wonderful deal - hugely discounted accommodation for nearly 6 years. What's not to love about that?
 

Thinkingaboutit

Registered User
Messages
9
I'm struggling to see why you're feeling sore.

If I understand the fact pattern correctly, you got an apartment for €158k in 2010 without putting down any deposit. You now get to walk away free and clear - no gain, no loss.

I did have to put down a deposit of €3,000 plus an extra €1,500 for "larger" size. I had to pay a solicitor also at the time. I now have to pay approx €2,500 to get it sold before solicitors costs. That's all at a loss.
I had to put in floors, tiles, blinds, new water pump, domestic appliances which will now all be at a loss (all were provided in privately sold apartments)

The monthly mortgage payment on €158k @3.7% (the current EBS variable rate for LTV's over 80%) over 30 years is €727. I would expect an apartment with a market value of €195k today to rent for around €1,250 per month - maybe more.

If the property had been valued correctly it would have been valued at €25,000 less. Working that out, that's a mortgage repayment of ~€650 a month. €70 a month less that my current repayments. Add that up over 6 years that's €5k. Again that's more money lost.

It's not a rented property though and for 4 out of the last six years,the better spec aparts were renting for €850 per month. They have only now gone up to €1k a month. Also maintenance all carried out by myself not a landlord.

Unless I'm misunderstanding something, it sounds like you got an absolutely wonderful deal - hugely discounted accommodation for nearly 6 years. What's not to love about that?
If you buy a bag of apples at a lower price but there are two apples missing from the bag after you have bought them,is it really a reduced rate ??
 

Thinkingaboutit

Registered User
Messages
9
Sorry I replied incorrectly to that last message, I'll try again.

I'm struggling to see why you're feeling sore.

If I understand the fact pattern correctly, you got an apartment for €158k in 2010 without putting down any deposit. You now get to walk away free and clear - no gain, no loss.

The monthly mortgage payment on €158k @3.7% (the current EBS variable rate for LTV's over 80%) over 30 years is €727. I would expect an apartment with a market value of €195k today to rent for around €1,250 per month - maybe more.

Unless I'm misunderstanding something, it sounds like you got an absolutely wonderful deal - hugely discounted accommodation for nearly 6 years. What's not to love about that?
Deposit of €3k plus €1.5k for bigger apart, plus solicitors fees. To sell now €2.5k to estate agents plus solicitors fees. All at a loss.
I had to put in floors, tiles, blinds, domestic appliances ( all were provided in private aparts selling at €195,000). Also a loss.

If property had have been correctly valued at what constituted market value, it would have been €25 k less. These repayments over 6 years of a mortgage amount to 5k. More money lost.

It's not rented though. Maintenance and upkeep by myself not a landlord. Apartments weren't renting for that much more than what I was paying in mortgage and management fees until last year and a half.
 

Sarenco

Frequent Poster
Messages
5,591
Your main complaint seems to be that the super bargain you thought you were getting hasn't turned out to be such a bargain after all.

Look at it this way - if you hadn't availed of the scheme and simply rented for the last six years would you be any better or worse off today? It doesn't sound like it.

Like others have said - I think you should count yourself lucky that you are not stuck in negative equity and move on with your life. It doesn't sound like you've been ripped off by anybody.
 
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