Affordable housing - Clawback

CryptoPaddy79

Registered User
Messages
2
Hi Folks;

Hoping someone with experience could help me out with this. There is some brilliant worked examples and advice on here but I cant seem to find one that fits my situation albeit some really close ones - just posting this as a sanity check and hoping someone can lend some expertise.

My Situation....
I bought an affordable house with Fingal Co. Co in Jan 2005, brilliant opportunity and have loved living here, but a wife and two active kids later see's us looking to get some where with a little bit more space.

€285,000 "Market Value"
€185,000 Affordable price paid
35% Discount

Approx. sales price I may be able to get is around €240,000

We are 15 years here so we will be 5 years into the 10% reduction each year after 10 years which should reduce the clawback by 50%.

I am just wondering when does the clawback kick in...is it after "market value" €285,000 is reached or on the total sales price at the time of sale?

My calculations are: (Hope I am wrong)

Sales Price - €240,000
Less owed on original mortgage - €185,000 (we settle outstanding money owed on mortgage and keep the balance)
Profit for Fingal Co.Co - €240,000 - €185,000 = €55,000
Profit for us - €0
(we can only make a profit after the €280,000 original valuation is reached)

Any help would be greatly appreciated.
 

Easter

Registered User
Messages
50
Hi there
The clawback is applicable to anything above the affordable price you paid. So if you sell for €240k, the clawback would be €55k -50% because you have lived in it for 15 years. So you would make €27500 profit on a €240k sale. I haven’t sold myself, but am certain this is how it works.
 

CryptoPaddy79

Registered User
Messages
2
Hi Easter,

I looked into the legislation and the Fingal website, I am pretty sure you are correct.
Thanks so much for the reply, appreciate you taking the time to answer.

S
 

Carolinedaisy

Registered User
Messages
1
Hi, I'm thinking selling my AH apt too, I thought my 10 tens was up at end of May this year, I've been asking the council for clarification and it took them months to answer me. I thought I had 30% discount but it's 21.92%. My apt is worth a fair bit more than it was 10 years ago. If I sell it for the market price it was 10 years ago (which wont happen) I owe them the difference between what I paid and the market price. If i sell it for more its 21.92% of total selling price. This is where we have an issue now, as far as I'm concerned my 10 years is up at end of May 2019, the council said it's end of May 2020. So I asked for clarification with a few scenarios and the 10% discount only applies after the 1st completed year and 10 years residence so it's really year 11-12 before the discount applies!!
 

Easter

Registered User
Messages
50
After the 10th year, the clawback reduces by 10% for every subsequent year you are resident in the property. So yes, you don’t get any reduction until your 11th year.
 

WillIBeRich?

Registered User
Messages
34
Hi Guys, have any of you actually sold your AH apartments yet or got out of your contract with the council somehow? I have an AH apartment too, I bought it with dlrcoco in 2008.
I'm just reading back on your posts that the clawback is applicable after year 10. Surely that doesn't mean that the contract is 21 years as opposed to 20 years? Our clawback only comes into effect if the property sells for over the original market price of the apartment back in 2008, otherwise if we sell the council gets it all. We have another 8 years of our contract to go & its killing us ...
 

Easter

Registered User
Messages
50
Hi haven’t sold myself yet, but recently had a communication from the council around how it will work. I thought I’d be due a 20% reduction in clawback if I sold now, but council saying that anything between AH purchase price and sale price (if below original MV) goes to them. Yet if I sold for anything over the original MV, I’d get a 20% discount on all of the clawback between the AH purchase price and MV. I don’t get it.
 

Easter

Registered User
Messages
50
It looks to me like different councils are doing different things. Over on boards there’s a post from someone saying they got a clawback % reduction in year 11 when they sold below the MV. This was DCC. I’m with DLRCC. My property would sell for €40k over purchas price now, but below MV.
 

WillIBeRich?

Registered User
Messages
34
Hi haven’t sold myself yet, but recently had a communication from the council around how it will work. I thought I’d be due a 20% reduction in clawback if I sold now, but council saying that anything between AH purchase price and sale price (if below original MV) goes to them. Yet if I sold for anything over the original MV, I’d get a 20% discount on all of the clawback between the AH purchase price and MV. I don’t get it.
We had communication from DLRCOCO in 2019 about our AH property. Our situation seems to be similar to your Easter, Our clawback only kicks in if we sell for over the original market price, otherwise if we sell the council gets everything. Our clawback would be 20% now aswell but the clawback is never going to get an opportunity to come into play for Us as the property is never going to sell for over the original market price anyway.
We are stuck.
 

WillIBeRich?

Registered User
Messages
34
It looks to me like different councils are doing different things. Over on boards there’s a post from someone saying they got a clawback % reduction in year 11 when they sold below the MV. This was DCC. I’m with DLRCC. My property would sell for €40k over purchas price now, but below MV.
Your right different councils are doing different things. we have no choice but to sweat it out till our contract ends.
Are you going to sell before your contract finishes do you think?
 

Easter

Registered User
Messages
50
Same situation, ours will never sell for the MV. I don’t understand how some councils will give the clawback reduction and others won’t. They are all working out of the same legislation. I would love to hear directly from someone who has got the clawback reduction. If there is anyone out there please post or send a private message! If others have got a reduction under the MV, there is a legal challenge th

I will either sell now or rent our place out. I know renting will extend the clawback period, but I don’t care, we just need to move.

What really doesn’t seem to make sense is that if your property sells for €100 over the MV, suddenly you would get a % reduction of everything between the purchase price and MV. I don’t see how that can be the case?

Feel free to pm me if you wanted to exchange or compare information given recently.
Equally if anyone else has sold after 10 years of ownership and has had a different experience, would love to hear from you!
 

WillIBeRich?

Registered User
Messages
34
Same situation, ours will never sell for the MV. I don’t understand how some councils will give the clawback reduction and others won’t. They are all working out of the same legislation. I would love to hear directly from someone who has got the clawback reduction. If there is anyone out there please post or send a private message! If others have got a reduction under the MV, there is a legal challenge th

I will either sell now or rent our place out. I know renting will extend the clawback period, but I don’t care, we just need to move.

What really doesn’t seem to make sense is that if your property sells for €100 over the MV, suddenly you would get a % reduction of everything between the purchase price and MV. I don’t see how that can be the case?

Feel free to pm me if you wanted to exchange or compare information given recently.
Equally if anyone else has sold after 10 years of ownership and has had a different experience, would love to hear from you!
Well said Easter & best of luck with your move going forward. DLRCOCO have given us the option to rent too but of course they'll freeze the contract while we're renting which is not really a goer for Us as we just wanna get through the contract.
 

skipper1978

Registered User
Messages
14
A question on the scenarios above.

As you approach the end of your mortgage (reducing the amount outstanding to a relatively small amount) would it be possible to clear the mortgage with the council (maybe through a bridging loan or similar)and then sell without any clawback or calculations to worry about?

Please forgive my ignorance on bridging loans etc and I do appreciate that the above depends on financial health etc. However, if this was possible it would allow for people to sell and move whilst keeping some of the profit made on the sale.

I remember from previous posts (many years ago) that different councils were applying different terms and conditions. One of these related to the renting of the properties. These different approaches may mean that there is more than one answer to my suggestion.
 

WillIBeRich?

Registered User
Messages
34
A question on the scenarios above.

As you approach the end of your mortgage (reducing the amount outstanding to a relatively small amount) would it be possible to clear the mortgage with the council (maybe through a bridging loan or similar)and then sell without any clawback or calculations to worry about?

Please forgive my ignorance on bridging loans etc and I do appreciate that the above depends on financial health etc. However, if this was possible it would allow for people to sell and move whilst keeping some of the profit made on the sale.

I remember from previous posts (many years ago) that different councils were applying different terms and conditions. One of these related to the renting of the properties. These different approaches may mean that there is more than one answer to my suggestion.


Hi Skipper, I guess anything is possible & it could be worth getting a solicitor to look into a bridging loan nearer to the end of the dlrcoco contract for sure, Thanks for the thought. From time to time my head is wrecked as I'm frequently trying to think of ways of how to get out of this contract - Wasted energy I know.
A neighbour of mine was trying to sell her AH apartment & the sale fell through at the last minute coz of fire regulations in our block. Now, you can't even sell these apartments if you want too apparently? Shudnt the contracts just be quashed if the apartments can't even be sold? ...
 

spurrospurro

New Member
Messages
6
After the 10th year, the clawback reduces by 10% for every subsequent year you are resident in the property. So yes, you don’t get any reduction until your 11th year.
I cannot see in my loan agreement how to work out the clawback, it seems to me that this clawback is not very well understood by anyone.

Does your contract show the formula for the clawback. If the calculation method/formula is not in the contract how is the method the council are using enforcable in accounting the clawback amounts?
 

WillIBeRich?

Registered User
Messages
34
My contract does of course show the clawback formula & when the clawback was set up in the boom it didn't factor in that there was going to be a big market property crash in the coming years & therefore the clawback still stands almost 20 years later. Any profits made from the sale of my property less the original market price of my property all goes to the council. The clawback doesn't get a chance to kick in because the council's stake in my property is still to high & in my case we're only in year 12 of the contract. Any profit on year 19 will still go to the council when on or after year 20 all profits will go to me as we'll be out of contract with the council. A bitter pill to swallow ... & Before anyone starts ... First world problem I know.

Hard to believe I know, & I have had 3 different opinions on this matter, 2 of which are from solicitors & one a financial advisor.
 

spurrospurro

New Member
Messages
6
Well there is absolutely nothing in my contract about the clawback in my Loan. It's 11 pages long. I believe (at least in my case) that my loan was a snipet of what was agreed. Quote

The said Borrower being desirous of acquiring the ownership of the dwellinghouse on the said plot of ground has applied to the Council for a lon of (amount) under the provisions of the Housing (Miscellaneous Provisions) Act, 1992....

I think the full T&C's are in the act Good luck reading all that...

And if indeed the actual terms and conditions are in there, should we not have been furnished with that at the time of signing too?
 

spurrospurro

New Member
Messages
6
Hi Folks;

Hoping someone with experience could help me out with this. There is some brilliant worked examples and advice on here but I cant seem to find one that fits my situation albeit some really close ones - just posting this as a sanity check and hoping someone can lend some expertise.

My Situation....
I bought an affordable house with Fingal Co. Co in Jan 2005, brilliant opportunity and have loved living here, but a wife and two active kids later see's us looking to get some where with a little bit more space.

€285,000 "Market Value"
€185,000 Affordable price paid
35% Discount

Approx. sales price I may be able to get is around €240,000

We are 15 years here so we will be 5 years into the 10% reduction each year after 10 years which should reduce the clawback by 50%.

I am just wondering when does the clawback kick in...is it after "market value" €285,000 is reached or on the total sales price at the time of sale?

My calculations are: (Hope I am wrong)

Sales Price - €240,000
Less owed on original mortgage - €185,000 (we settle outstanding money owed on mortgage and keep the balance)
Profit for Fingal Co.Co - €240,000 - €185,000 = €55,000
Profit for us - €0
(we can only make a profit after the €280,000 original valuation is reached)

Any help would be greatly appreciated.
Hello OP

May I ask where did you get the formula for working this out!? As previously stated, if the clawback is not mentioned in the loan agreement, how on earth are they able to enforce this!? Mind Blown
 

Leo

Moderator
Messages
13,176
May I ask where did you get the formula for working this out!? As previously stated, if the clawback is not mentioned in the loan agreement, how on earth are they able to enforce this!? Mind Blown
Why mind blown? Legislation always trumps contracts.
 

WillIBeRich?

Registered User
Messages
34
Is anyone coming close to their 20 year contract coming to an end? I'd be very interested to hear peoples stories on that.
I have another 7 years plus on my contract :-(
 
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