Personal Finance

Your queries answered

Shared Ownership apartment nightmare

Q

I purchased my apartment through the Shared Ownership Scheme six years ago and put it up for sale two years ago.

It failed to sell and for personal reasons I now have no option but to sell at a considerable loss, which will leave me with a substantial balance to pay off my mortgage.

As a co-owner, does Dublin City Council have any liability to bear the burden of the deficit or am I solely responsible? If I am exclusively liable, what are my options if I cannot obtain a loan to pay off the deficit?

- Ms BD, e-mail

A

Your position illustrates the perils of Ireland’s fascination with owning bricks and mortar. There is nothing wrong with aspiring to own a home but it does considerably reduce one’s room for manoeuvre, especially when circumstances change.

You are now in a position where any sale of your apartment is going to leave you in a position where you have considerable outstanding obligations to your lender – at a time when it is going to be very difficult to persuade someone to lend you the money you need to pay off that debt.

And a serious question arises over whether you will be able to sell the property at all.

Dublin City Council tells me that under the Shared Ownership Scheme, it acquires the property that has been identified by the purchaser – ie, you – and then grants a 99-year lease on it.

My understanding is that under the shared ownership arrangement, the purchaser had to provide at least 40 per cent of the value of the property up front and this presumably you sourced through a separate mortgage.

To sell the property, you would have to repay the council the full amount owing to it under the terms of the shared ownership agreement. This is before you look at paying down some of your own outstanding mortgage debt.

If you fail to pay the council the full amount owing to it, it will not “discharge” the lease and, in those circumstances, no sale would proceed.

Similarly, the mortgage lender will have a charge on the property and, unless this is discharged (which happens when they get their money in full), they will not sanction any sale.

You don’t say how much is owing or how much the likely shortfall is going to be on the sale but you will need to organise finance either from a bank or a credit union.

The first port of call is probably your existing mortgage lender, which might be able to restructure your borrowings although all financial institutions are finding things very difficult in this regard at the moment.

The safety of long distance savings

Q

I’m an Irish citizen living abroad. I have approximately €200,000 in a savings account with the Bank of Ireland. If BoI goes bust is my money protected?

- Mr RM, e-mail

A

The Government has fully guaranteed deposits at Bank of Ireland.

However, that could change and if you are away from home, you are better to rely on the underlying Deposit Protection Scheme which is limited to €100,000 per person per institution.

This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.

Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com