Our property finance expert answers your questions
Q I took a mortgage payment break with AIB and the terms and conditions in their letter refers to the advantages of interest-only repayments, stating: “This option gives you the flexibility to reduce your repayments to interest only for up to a maximum of 12 months.” How can AIB deny mortgage account holders a longer period of the pandemic payment break when this is clearly available on their terms and conditions?
A There’s a little confusion here. The mortgage payment break introduced in March due to Covid-19 saw those who were financially impacted availing of a three-month (extended to six months) break from their mortgage repayments. This ceased on September 30 and will not be extended any further by any of the banks in agreement with the European Banking Authority and Government.
What is available and, indeed, will be extended to any borrower who cannot return to their repayments, is a suite of longer-term options available under the Mortgage Arrears Resolution Process (Marp). This long-standing procedure handles mortgages in default, and all banks and non-bank lenders have signed up to it. One of those options is making interest-only payments, as outlined in the letter to you. AIB says: “Outside of Covid-specific payment breaks, we offer mortgage customers a range of flexible payment options (including interest-only periods of up to 12 months), subject to approval.
“For customers in financial difficulty, we also have a range of solutions available and work with them on a case by case basis to find a solution that works for them. We encourage any customer who feels that they might have difficulty paying their mortgage payments once their Covid payment break ends to contact us to discuss their options.”
All of this is in line with ordinary Marp solutions, but to avail of them, you will be required to complete a Standard Financial Statement, which is a complex piece of kit detailing your income and outgoings, agree the solutions put forward and, this time, unlike the pandemic break, it will appear on the Central Credit Register as a restructured loan.
Q We purchased our home (built in 1952) in 1988 and the ground rent on it was IR£15 per year. This was brought up to date by the previous owners at the time of sale. We have never received a demand for ground rent and we had overlooked it over the years. However, some years ago, we tried to follow up so we could buy out the ground rent. The company were not at the address given and we were unable to locate them. We contacted the previous owners’ solicitors, but they were not in business as far as we could ascertain. We would like to have this sorted.
A Susan Cosgrove of Cosgrove Gaynard Solicitors says the governing statute is the Ground Rents Purchase Scheme introduced by the Landlord and Tenant (Ground Rents) (No.2) Act, 1978 and is applied for through the Land Registry when you are dealing with your principal residence.
“If you cannot determine the freehold owner, the Land Registry will proceed with your application by way of a process called arbitration, as opposed to ‘by consent’, where the owner is known. The Land Registry will apply a formula to determine the amount payable, generally a nominal figure. Once the application is processed, the Land Registry will issue a vesting certificate, which transfers the freehold to you. This is a document which will need to subsequently be registered, however the process is overall quite straightforward.”