QI

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

bought a com­mer­cial buy-to-let prop­erty with some oth­ers a few years ago. We’ve al­ways met the re­pay­ments on this loan but one of us has de­faulted on the re­pay­ments on an un­con­nected loan and the bank has ap­pointed a re­ceiver to the com­mer­cial buy-to-let prop­erty. Is the bank within its right to do that? If so, is there any way this could be re­solved with­out us los­ing the prop­erty? Sea­mus, Athlone, Co Meath GEN­ER­ALLY speak­ing, most terms and con­di­tions of a loan con­tain what are called Ma­te­rial Ad­verse Con­di­tions (MAC) clauses — which set out the pa­ram­e­ters un­der which a bank may call in the loan and ap­point a re­ceiver. Whilst the bank may have been legally en­ti­tled to call in the loan, it should have first com­plied with the Cen­tral Bank’s code of con­duct on lend­ing to small and medium en­ter­prises (SMES). It was in­tro­duced to pro­vide SMES some breath­ing space in deal­ing with any loan ar­rears. The code op­er­ates in a sim­i­lar fash­ion to the mort­gage ar­rears res­o­lu­tion process (MARP) for home own­ers.

Some banks deal with breaches of MAC clauses dif­fer­ently. Those banks which have de­cided to exit the Ir­ish mar­ket place will seize upon any op­por­tu­nity to call in a loan and ap­point a re­ceiver. If you are deal­ing with a bank that has de­cided to exit the mar­ket, you face an up­hill strug­gle. You should seek le­gal ad­vice as to whether you have good grounds to ob­tain an in­junc­tion re­strain­ing the re­ceiver from sell­ing your prop­erty.

If the bank’s mo­ti­va­tion was to sell the prop­erty and re­lease any eq­uity in it so that the de­fault­ing part­ner’s debts could be paid, then the bank might en­ter­tain a pro­posal from the re­main­ing part­ners to con­trib­ute suf­fi­cient cash to ‘buy out’ the eq­uity.

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