W
Wibble
Guest
I'd appreciate some knowledgeable opinion on a Contract issue I'm having with BOI at present.
I took out a Mortgage in 2006 to fund the purchase of a site and subsequent home build (it was actually an Equity Release on our family home).
We explained clearly to BOI what we were doing, and in fact the Mortgage Documentation (Special Conditions part) references the fact that the loan is to purchase a site AND build.
We went ahead and purchased the site on strength of this. The first part of the mortgage was drawn down for this purpose.
An Architect was hired, and he designed the house and applied for Planning Permission. After some to-ing and fro-ing the Planning Permission was granted. The whole process took almost exactly one year, about normal for the project at that time I'm told.
We then contacted BOI to ask how to commence drawdown of building funds. They replied that they would not be giving us the money, and that we should sell our family home to raise build funds. Since this would leave us with no home (and a baby was on the way) we were not too pleased about this option. But after a few months we realised it was our only way out of a growingly nasty situation.
We sold the house 6 months later.
Subsequent to that my employer offerred me Voluntary Severance, and I took it. We now live and work outside Ireland.
The site remains undeveloped, and a big drag on our finances.
I asked BOI numerous times to explain the refusal to give us the build funds we had been approved for, but they simply didn't answer the question. I had a good job, good salary, no other debts (we had recently cleared the mortgage on the family home) and never in any kind of financial trouble with any institution or individual.
Finally I wrote to them recently telling them I would default on the Mortgage if I don't get an answer.
They have now finally begun to communicate.
They started out with a bare-faced lie, saying they explained their case for refusal in 2009. They did not. Categorically!
They then went on to make an interpretation of the Mortgage Documentation which I find incredible, and another lie.
They say that under Clause 9(c) (Drawdown) in the General Conditions, there is a time limit of 6 months for drawdown!
Anyone familiar with the Planning Process in Ireland could tell you there is absolutely no way a site could be bought, house designed, Planning obtained, and build work ready to commence - in 6 months!
So either the bank was ignorant of the realities of the Planning/Build process, or they were ignoring the reality in giving the Mortgage.
But, there's more!
The next sub section (d) to Clause 9 refers to Staged Drawdown of building funds, and the terms of such advances. It seems to me that this clause covers our situation - allowing for the extended drawdown in a house-build project. There is no mention of a time limit here - and lets face it, even if you could get through the design and Planning Process in 6 months, how could you actually complete the BUILD as well? In 6 months? Rubbish!
It seems to me that Clause 9 (c) is there to protect the bank from a borrower arranging the Loan but then dragging their heels indefinitely. Obviously it would make no sense for a bank to give approval, then hear nothing for (say) 5 years, only to have the borrower come looking for the money? I can accept that. But this wasn't the case here.
We did not drag anything out. We went about the Planning application in a timely manner. And even if we had gotten it in 2 months (an impossibility) - there'd have been no hope of building a house in the remaining 4 months!
They basically ruined our lives in Ireland by what they did (refusing to loan the agreed funds), suckered us into buying the site then left us high and dry. They forced us into selling our home, which made the subsequent decision to emigrate an easier option. Thanks to BOI we ended up being driven out of our home and our country.
We continue to pay a debt on a site we will probably never build on, and of course its well into neg equity now too, so we can't sell it and walk away - although many have advised us to.
Between Stamp Duty, Architects/Solicitors Fees and Interest - we've spent over 120K on it already.
Anyhow, I'd like to hear your opinions on this case. Am I right in thinking BOI are trying to wriggle out of their responsibilities to us with their interpretation? What kind of solutions am I entitled to chase?
What would you do in the same situation?
I took out a Mortgage in 2006 to fund the purchase of a site and subsequent home build (it was actually an Equity Release on our family home).
We explained clearly to BOI what we were doing, and in fact the Mortgage Documentation (Special Conditions part) references the fact that the loan is to purchase a site AND build.
We went ahead and purchased the site on strength of this. The first part of the mortgage was drawn down for this purpose.
An Architect was hired, and he designed the house and applied for Planning Permission. After some to-ing and fro-ing the Planning Permission was granted. The whole process took almost exactly one year, about normal for the project at that time I'm told.
We then contacted BOI to ask how to commence drawdown of building funds. They replied that they would not be giving us the money, and that we should sell our family home to raise build funds. Since this would leave us with no home (and a baby was on the way) we were not too pleased about this option. But after a few months we realised it was our only way out of a growingly nasty situation.
We sold the house 6 months later.
Subsequent to that my employer offerred me Voluntary Severance, and I took it. We now live and work outside Ireland.
The site remains undeveloped, and a big drag on our finances.
I asked BOI numerous times to explain the refusal to give us the build funds we had been approved for, but they simply didn't answer the question. I had a good job, good salary, no other debts (we had recently cleared the mortgage on the family home) and never in any kind of financial trouble with any institution or individual.
Finally I wrote to them recently telling them I would default on the Mortgage if I don't get an answer.
They have now finally begun to communicate.
They started out with a bare-faced lie, saying they explained their case for refusal in 2009. They did not. Categorically!
They then went on to make an interpretation of the Mortgage Documentation which I find incredible, and another lie.
They say that under Clause 9(c) (Drawdown) in the General Conditions, there is a time limit of 6 months for drawdown!
Anyone familiar with the Planning Process in Ireland could tell you there is absolutely no way a site could be bought, house designed, Planning obtained, and build work ready to commence - in 6 months!
So either the bank was ignorant of the realities of the Planning/Build process, or they were ignoring the reality in giving the Mortgage.
But, there's more!
The next sub section (d) to Clause 9 refers to Staged Drawdown of building funds, and the terms of such advances. It seems to me that this clause covers our situation - allowing for the extended drawdown in a house-build project. There is no mention of a time limit here - and lets face it, even if you could get through the design and Planning Process in 6 months, how could you actually complete the BUILD as well? In 6 months? Rubbish!
It seems to me that Clause 9 (c) is there to protect the bank from a borrower arranging the Loan but then dragging their heels indefinitely. Obviously it would make no sense for a bank to give approval, then hear nothing for (say) 5 years, only to have the borrower come looking for the money? I can accept that. But this wasn't the case here.
We did not drag anything out. We went about the Planning application in a timely manner. And even if we had gotten it in 2 months (an impossibility) - there'd have been no hope of building a house in the remaining 4 months!
They basically ruined our lives in Ireland by what they did (refusing to loan the agreed funds), suckered us into buying the site then left us high and dry. They forced us into selling our home, which made the subsequent decision to emigrate an easier option. Thanks to BOI we ended up being driven out of our home and our country.
We continue to pay a debt on a site we will probably never build on, and of course its well into neg equity now too, so we can't sell it and walk away - although many have advised us to.
Between Stamp Duty, Architects/Solicitors Fees and Interest - we've spent over 120K on it already.
Anyhow, I'd like to hear your opinions on this case. Am I right in thinking BOI are trying to wriggle out of their responsibilities to us with their interpretation? What kind of solutions am I entitled to chase?
What would you do in the same situation?
