In an unusual predicatment. Own an apartment in a reputable estate in Cork city. About 3 months ago severe cracking occured in the communal areas, then one weekend I went away, only to return to see severe cracking had occured in my apartment. The builders were reassuring the owners that this was normal ‘settling’. The block was 3 years old. Move on one month later, and the cracking had become so bad that we were issued with an emergency evacuation notice.
The builders again reassured us that the problem would be sorted within 3 months. To cut a long story short, it now turns out that we will never be able to move back and the whole block of 21 apartments will need to be demolished. The builders are blaming the sub contractors who laid the foundations, it seems that the piling was not strong enough to support the block.
The builders are in court with the sub-contractor’s insurance company (the sub-contractor has gone bust). This will take years for my case, and the other 20 apartment owners to resolution.
Meantime, I am still paying a mortgage for my first home, and no longer able to live in it.
I have been told by lawyer and barrister that the chances of a recovery of what I paid for the apartment is unlikely. That in all likelihood, I will only get back the market value of my apartment. So through no fault of my own, I will be left with a part mortgage, and no property.
Sue the phone book, look for a settlement from each of them - engineer, management company, insurance company, builder, sub-contractor, bank…
My understanding (I am no expert on this however) is that the buildings insurance should clear the mortgage, which is why the banks insist on it? So, in logic, it should be up to the bank to sort it out with the insurance company and it should be nothing to do with you. Unfortunately, I doubt logic has anything to do with it.
The best of luck, I hope some of the experts can give you cheerier or more plausible advice.
IS there block insurance? Ask your management company, they should have taken it out for the entrie block. This would have been put in place when the management company bought out the developer as each apartment was sold.
Go to a goo loss assessing company. they know all about this stuff.
I heard about that apartment block through the grapevine recently, I think.
I would agree with Yogan & GeorgeOrwell - sue everyone who may bear any blame, as if you’re successful against some but not others, the losers pay everyone’s costs. But if you don’t sue a person who bears responsibility your damages could be reduced pro rata to his proportion of fault. I presume you’ve stopped paying your mortgage on the apartment - you should write to everyone you’re suing and say that your mortgage debt is now their problem not yours.
Cost of cure (i.e. rebuild cost) vs. value of what you lost (i.e. market value of apartment) is a difficult legal area - I won’t pretend to know the answer to that one.
Absolutely. The block insurance policy - its with Homebond and a great selling point was that it comes for 10 years.
Turns out, Homebond will only cover each apartment for 33,000 Euros. The apartments cost 300,000 Euros. Like anyone else buying a place for the first time, I assumed when I was told the block was insured, that it meant for the full amount. Apparently, that’s not how Homebond work.
I’m suing the builder - but at the end of the day, this comes down to the law, and if the judge decides that we are only to get the market value of our property - what then??? The judge issuing will be a high court judge. Is it just me - or does this seem damn unfair. Why should I be left with no property and a mortgage??
As for mortgage, still paying it (just), the bank didn’t want to know - legally apparently it’s my problem, not theirs. Think I’ll become a defaulter shortly.
There should be block insurance in addition to Homebond. The management company should have a general buildings insurance policy taken out for all covered apartments/houses under management - I am presuming your apartment block is not the only one that was built and is not the only one covered by the management company. This is the insurance policy you should be claiming on, it is up to the management company to claim back on homebond - no?
OP, sorry for your troubles, desperate situation. IMO, you need to have a lawyer review your mortgage with the bank, the mortgage insurance (if it exists) may have a clause regarding building integtiry and allow you to pass the issue to the bank. That would likely mean losing all monies paid to date but release you from the mortgage going forward. In that case, you would likely forfeit any claim related to the property and therefore any insurance or damages associated with a settlement.
I do sympathise with your predicament, but, imagine you had bought a car with a car loan. And the car manufacturer went belly up because it was discovered that the cars were a death trap and couldn’t be remedied. Would you expect the bank that loaned you the money to sort this out? And if so, why?
Yikes! Sorry for your troubles, Autumndays. I know it must be a burden on you, but this problem will be resolved through the insurance and /or the courts. Try to ensure that your solicitor can and will deal with this issue directly so that you can remove the pressure from yourself. Keep track of all expenses incurred, and stay positive.
I don’t think that’s as easy as you think YM. It’s a great deal more complicated. There are two kinds of mortgage, the old fashioned mortgage by demise, where the bank legally owns the property, and the more common mortgage by legal charge, where the buyer owns the property and the bank retains rights of recovery in case of default.
Since December 2009, with the Land and Conveyancing Reform act, the only type of mortgage which can be issued in Ireland is a mortgage by legal charge.
And many people buy cars not with hire purchase agreements, but simply with unsecured car loans from a bank - in fact the latter is a very common form of car purchase.
Note the distinction AIB makes between car loans and hire purchase agreements: aib.ie/personal/loans/Car-Finance
Tough one. There appears to be major problems with apartment blocks built in the past few years and Insurance Premiums have increased very significantly for these policies. Surprised with the restriction on Homebond. The correct cover for this type of situation would have been a Latent Defects policy, a 10 year policy, usually arranged by the Developer. Might be worth checking however this was more the practice in the UK and not as prevalent here. Best of luck.
I would have thought that the block insurance was liable for full replacement and making good. I understand that this is unlikely to happen in the short term, but in light of that I would have thought the judge unlikely to rule for return of money. separately, I’d look into having alternative accomodation paid for while waiting, and sue all parties for these costs too.
All you can do is act diligently at this point, and don’t worry too much about it, if thats possible.