Condition on title-AIB likely to accept or not?

D

dano'b

Registered User
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11
Hi
I am buying an apartment and expected to have moved in months ago!

I had access to the following info from my research and used it to negotiate what I think is a really good price;

Common areas not transferred to management company--the developer went to the wall in 2006 so couldnt be done in 2011, Management Company have employed a legal team to instigate the legal process to do this which I understand needs to be through the courts but due to MUD act has to be done

Claim pending against homebond--building defects identified and claim lodged against Homebond which is ongoing, I have seen the building estimates supplied by 4 companies who were invited to tender, not excessive amount and I personally have more than adequate funds to meet if claim not successful---the sale price was reduced to factor in the information I provided,

Anyway just before what I thought would be drawdown my solicitor wrote to AIB notifying them of these issues and asking for confirmation that they as mortgage company were in agreement with these conditions on title.

Therein began the long wait....this is with them 4 weeks, the call centre is hopeless I get a different update every time I ring, even being told funds would be released in 2 days when in fact solicitor cant request them as she doesnt have their confirmation this is ok,

The current state of play seems it is with their panel solicitor, anyone any experience of this how long does response take,,or is it how long is a piece of string??

Any thoughts on whether AIB are likely or not to accept these conditions?

Surely going forward when a new apartment is sold the common areas wont be transferred as this wont happen tilll last unit sold, is this likely to be an issue on all apartment sales?

I was so pleased the management company had figured out all that needed to be done and presented costs to owners I would have thought this was well ahead of a lot of apartment blocks.

The whole complex (very small) is fantastically maintained including the common areas

Any thoughts on whether AIB will or wont accept, solicitor not commenting either way so I dont know if thse would be considered major or minor items
Thanks in advance,

D
 
I wouldn't be putting a bet on a positive outcome, so little lending going through and it has to be squeaky clean, anything outside the norm and I think it will be hard to get through.
 
I had a similar issue on a property I was buying though there was no claim with homebond it was expiring in 6 months.My Solicitor listed all concerns as conditions and the lending institutes lending committee refused to proceed on advice from their Solicitors.

She discovered that the majority of these conditions could be explained away when the vendors solicitors finally got round to answering/explaining them properly,this would have saved me a significant amt of time as a month was spent back and forth betwixt lender and solicitors and lending committee.

She then removed the majority of the conditions and the lending committee gave it the green light,fingers crossed will get the keys during the week.

The way I looked at it was that these properties had already been bought using mortgages so therefore there was a way round the issue.It helped my Solicitor was extremely dogged and pro active in closing this out.If you have the type of solicitor who closes for lunch between 12.30-2pm and never returns calls then you are on a hiding to nothing.

The issue with Homebond-the Bank may take a view that it will heal itself it time and if the amts are not astronomical then it may not be such an issue however you just cannot second guess this but your solicitor should be able to give you an expert opinion on it.
 
Knuttell thanks for that it gives me a bit of hope!!
I just find it hard to comprehend why this only gets dealt with so late in the day after I have paid for survey, ran up a legal bill etc, surely in relation to apartments the MUD questionnaire should be done as part of the enquiries before a bank issues a letter of offer?
It sounds mad they issue a letter of offer I think I am good to go then at this late stage something can sink the deal?

AIB are so slow to deal with or get info from I can't believe the "new mortgage" section can be busy!

I hadn't realised these conditions were something the solicitor can remove... I can't see how it can be made simpler the legal process is underway to transfer the common areas and the developer is gone so it's not like he can appeal and it's law it has to be done. Then on the work required, it's been identified, homebond is in place so either they pay nothing/some/all if the first two then a proposal is put to owners who decide on if it's to be done and annual charge/sinking fund looked at to pay.

I know I am over simplifying the issues but I can't understand if they are deal breakers why are they raised with mortgage co so late in the day

Will let ye know how I get on if I ever hear back from bank
D
 
I sold a property about two years ago. It emerged that the common areas had not been transferred to the OMC. My solicitor advised me that it was a hitch, but not one that would normally frustrate a sale or a mortgage agreement - the problem would be resolved in the fulness of time. The intending purchaser took the same view. The solicitor acting for the intending purchaser seemed to make it his mission to save the purchaser from himself, made much of the defect, and the mortgage application was refused by AIB. My customer changed solicitors and applied again for a mortgage, and AIB again refused. Customer gave up and his deposit was refunded.

A new purchaser was found. Of course the purchaser's solicitor was apprised of the title defect. Guess who he applied to for finance? Yes, AIB again. It went through without a hitch.

My solicitor's explantion: it depends on whose desk in AIB the file lands.
 
Thanks for that, it's all a bit random and very slow. I can def meet my repayments and potential rent well in excess of cost of what I am borrowing
Would have thought that was all bank needed. I am sure lots of apartments with this already have AIB mortgages for 3 times what I am borrowing.... Are they going to re call them...doubt it but anyway fingers crossed they come back with a yes!
D
 
The bank are always looking at worst case scenario as well as ability to repay so good title is as important to them if they need to sell the property at any future stage.
 
If bank are looking at worst case scenario they will never lend .....surely they are in it to make a profit while applying due diligence to customer. Worst case we could all be dead/have specified illness and can't pay mortgage or every apartment block discovers loads of problems after homebond has run out

Not realistic I think!!!

Hoping they analyse the risk better!
D
 
AIB , Hmn ! After costing us 20 Billion , I think its a bit late for them looking for worst case scenarios !

That said , Title Defects will come back to bite everyone .

In relation to customers Survey Costs etc, Quite simply AIb do not care ,that is your issue.
 
Hi Dano'B,

I was wondering if this was ever resolved and if so what was the outcome?

7 and a half years later I am facing the exact same issue. I have found an apartment that is perfect. I was at the stage of signing contracts when my solicitor discovered the common areas have not been fully signed over to the management company.

I'm wondering if you went ahead with the sale in the end or if you would recommend walking away?

Any information and help would be greatly appreciated.

Kind Regards,
M
 
MABurn said:
Hi Dano'B,

I was wondering if this was ever resolved and if so what was the outcome?

7 and a half years later I am facing the exact same issue. I have found an apartment that is perfect. I was at the stage of signing contracts when my solicitor discovered the common areas have not been fully signed over to the management company.

I'm wondering if you went ahead with the sale in the end or if you would recommend walking away?

Any information and help would be greatly appreciated.

Kind Regards,
M
Click to expand...
FWIW I'm on the seller side of an apartment in a complex that the Common Areas have been transferred, but due to sloppy legal work some legacy mortgages were left on the deed. In theory these mortgages should be irrelevant (according to multiple legal firms) but at least one buyers' bank has taken issue with them and ultimately refused to allow drawdown of the mortgage. Interestingly other apartments sold in the past, before the Common Areas had even transferred, so there may be some banks that are more flexible or they may be getting stricter.

Having been involved in the process of getting Common Areas transferred to an OMC I can say it is absolutely doable with the support of the MUD Act, but it can just take a very long time if the developer is not contactable/agreeable. It's also difficult to find a solicitor with much experience in it, so there was a lot of "we tried this but now realise X is required".

If I was buying an apartment I loved, to live in for 10+ years, I didn't need a mortgage and I had a written undertaking from the OMC that they are going to do everything in their power to recover the Common Areas (including the ability to pay the ~€10k in legal fees likely to be incurred) then I would go ahead with it knowing it will get sorted eventually. But if you're going to need to sell in a few years (and who really knows the future), aren't too pushed about the apartment or need a big mortgage I would not personally be involved in something like that again.
 
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