Ancient loan transferred from Father to Son by council??

DeVore

Heyall... I've attached a weird letter a friend of mine got. I cant believe this really...


His father took a loan out in 1968, its not clear what was used as collateral. Its possible the family house was.

His father passed away and his mother continued to pay the loan until 2001, when she passed away suddenly. No one knew about the loan until this letter turned up 13 years later!

In the mean time the family has sold the house to one son (my mate) in a normal house-purchase and the money split between them.


So, my question is:
1. Wouldn't the loan die with his father , or at least with his mother?

2. If (and its not at all clear) the house was used as collateral... would that allow them to transfer this debt to him? (What if it had just been a random person in the market who bought it?)

3. Is there any statute of limitations to chase a debt which is from 1968 and hasn't been demanded since 2001??


This seems most perculiar to me... my mate is willing to pay it if its legal and above board but to me, this seems like its a load of rubbish and some graspy COCO trying to drum up money by chancing their arm.


Thanks for any help!

Robbo

You might want to clip out the footer from the letter.

DeVore

Robbo wrote: »

You might want to clip out the footer from the letter.

Thanks, done!

paul71

DeVore wrote: »

Thanks, done!

Tell him to contact the executor of the fathers will.

Cabaal

My understanding about debt and the statute of limitations is after 6 years its hard luck for them if they didn't chase it....thats if you actually took out the loan yourself.

http://www.citizensinformation.ie/en/money_and_tax/personal_finance/debt/glossary_of_debt_terms.html

Time limits/Statute of Limitations

There are time limits (limitation periods) for taking most types of court action. These time limits are set either in the Statute of Limitations 1957, as amended, or in specific legislation dealing with the court issue involved. For example, the time limit for taking a range of personal injuries actions is generally two year but may be extended in certain circumstances (Civil Liability and Courts Act 2004) and it is one year for defamation (Defamation Act 2009). In general, the limitation periods can be postponed because of infancy and disability.

The law in relation to time limits is complex but, in general, the time limit for taking actions for breach of contract (for example, failure to pay for goods or services provided), for debt judgments and for non payment of charges such as rent is six years. This means that if your creditor does not start the court action within six years of the debt being due, the action is “statute-barred”. Effectively, that means that you cannot be forced to pay the debt.

If your creditor gets a judgment, then, in general, they have 12 years in which to enforce that judgment.

The general rules do not apply to taxes. There is a four year time limit on the Revenue Commissioners seeking tax from you and there is a four year time limit on you seeking repayment of taxes which you were not due to pay. However, if there is any fraud or neglect, there is no time limit.

The fact it was the persons father makes it a different setup altogether and I'd imagine they are chancing their arm here, I'd imagine they are not liable for the debt but don't take my word for that as fact.

Bottom line is, until its clarified its very important the person not agree or admit in anyway that its a debt they will pay or its anything to do with them.

karlh

A fitting solution for €10

http://www.adverts.ie/stationery-supplies/electric-paper-shredder-with-bin/5361393

mikom

Sounds like the script to Mrs brown's boys d'movie.

dudara

Posters - stay on topic here. Constructive advice only please.

dudara

P. Breathnach

If a loan is secured on "real property" (that's legalese for land with or without a building standing on it) then the responsibility for the loan travels along with the ownership of the property.

And I have just discovered something I didn't know before: a "State authority" has 30 years to pursue that mortgage or charge. See http://www.irishstatutebook.ie/1957/en/act/pub/0006/print.html#sec32.

Maximus Alexander

Wow, that raises another question then - is there any way to check if there are loans secured against a property before you buy it!?

efb

Maximus Alexander wrote: »

Wow, that raises another question then - is there any way to check if there are loans secured against a property before you buy it!?

Yes. Your sol should do that. And ensure all charges are paid

Padraig Mor

His father probably got a mortgage from the council to buy the house. This is different from being in a council house and would have been fairly common back in those days. My father got a council mortgage in 1970 so a similar enough time. That also looks like roughly the amount I'd expect if it was. There was probably only a few years left on it when the mother died.

mad m

Surely when the son was buying the house a solicitor was involved and they had to do a searches on the premises for outstanding debts before the purchase could go ahead?

DeVore

Yeah, you would think that... I'll ask them if they got a solicitor to do the check.

Still its pretty frightening to think I could buy a house and if the solicitor doesn't find a whopping great loan that its underwriting, I get the bill?? I mean, I guess you sue the solicitor for negligence but ... wow.

mikehn

I would have assumed that there would have been life cover in place in the event of the borrowers death possibly by the council.
Were they ever formally advised of your parents death. Might be worth checking out. I have had experience of a similar situation involving a credit union loan.

ytpe2r5bxkn0c1

A stupid question perhaps but as the letter says Dear Mr X, could it be addressed to the late father rather than the son? If so return it marked deacesed since 19**.

P. Breathnach

I think (which means that I don't know for sure) that local authorities commonly allowed loans to continue after death rather than call them in. The idea was that the property was likely to become the home of the deceased's spouse (usually a widow) and it was seen as best policy to allow the spouse to stay in the family home and continue paying off the loan. When the spouse died, there was a good possibility that it then became the home of a son or daughter, and again it was policy to allow the family continue to occupy their home.

DeVore

The letter is addressed to the Son specifically and references the father as the person who took out the loan. (have a look again and you will see).

Seems so weird they can juts come after the son for the money... I'll check out the solicitor and let y'all know how things unfold

KKkitty

DeVore any money owed on my childhood home were transferred onto my older brother whose name was put as owner after both my parents died.

RobbingBandit

Interesting line in the link below from citizens information.

Your relatives are not liable for your debts unless they have provided personal guarantees for those debts.

Does also state, Your creditors may sue your estate for the payment of outstanding debts.

http://www.citizensinformation.ie/en/money_and_tax/personal_finance/debt/debts_after_death.html

errlloyd

13 years? Long enough for adverse possession to kick in.

Fred Swanson

This post has been deleted.

P. Breathnach

A mortgage debt does not go with the person; it goes with the property. So you cannot avail of the general two-year limit for collecting debts from a deceased person.

Nor can you invoke the Statute of Limitations: the law specifically gives "state authorities" 30 years before such a debt is statute-barred.

mickdw

P. Breathnach wrote: »

A mortgage debt does not go with the person; it goes with the property. So you cannot avail of the general two-year limit for collecting debts from a deceased person.

Nor can you invoke the Statute of Limitations: the law specifically gives "state authorities" 30 years before such a debt is statute-barred.

Yes but solicitor handling transfer would have found and properly dealt with this debt if in fact it is properly registered against the property.
I would forward letter to solicitor who should be able to put this to bed fairly quickly.

P. Breathnach

mickdw wrote: »

Yes but solicitor handling transfer would have found and properly dealt with this debt if in fact it is properly registered against the property.

I would expect a solicitor to check for charges on a property when ownership is being transferred. But as all the transfers were within the family, the solicitor might have gone along with an established custom of letting the loan run on. The solicitor might even have said that to OP's friend at the time. But you know what people can be like: in the excitement of becoming sole owner of the old family home, OP's friend might have lost track of that detail.

I would forward letter to solicitor who should be able to put this to bed fairly quickly.

'Tis the thing to do.

godtabh

Maximus Alexander wrote: »

Wow, that raises another question then - is there any way to check if there are loans secured against a property before you buy it!?

I think if you look at the land registry if can give info on it

Five Lamps

BTW, I wouldn't class 1968 as being in the "ancient" past

Mr. Incognito

I would guess that the deceased had no will. Under the tenant purchase schemes the loans were advanced to social tenants to purchase the houses.

The loan was generally by way of a simple contract document between the tenant and the authority. It is common to see terms such as the house must be kept within the family etc.

Six years is the statute on contractual debt.

The local authority would have had to register the mortgage or charge to avail of the 30 years. Compulsory registration only came in in limited drips and drabs and if the solicitor did not find this mortgage in his searches it is unlikely the debt was registered.

It appears to me that the six years would apply. A very prudent response would be to send a letter requesting a copy of the loan documentation that they say the debt / obligation is grounded on. They would need to exhibit this in any action for the amount owed. You are lucky its under the threshold for the small claims court as they wont chase 800 quid odd but if your mate intends selling the house he may need to get a clean title and may need the councils assistance so may be worth the few quid rather than fighting them.

Id look for a copy of the grounding loan document first though.

goz83

Mr. Incognito wrote: »

I would guess that the deceased had no will. Under the tenant purchase schemes the loans were advanced to social tenants to purchase the houses.

The loan was generally by way of a simple contract document between the tenant and the authority. It is common to see terms such as the house must be kept within the family etc.

Six years is the statute on contractual debt.

The local authority would have had to register the mortgage or charge to avail of the 30 years. Compulsory registration only came in in limited drips and drabs and if the solicitor did not find this mortgage in his searches it is unlikely the debt was registered.

It appears to me that the six years would apply. A very prudent response would be to send a letter requesting a copy of the loan documentation that they say the debt / obligation is grounded on. They would need to exhibit this in any action for the amount owed. You are lucky its under the threshold for the small claims court as they wont chase 800 quid odd but if your mate intends selling the house he may need to get a clean title and may need the councils assistance so may be worth the few quid rather than fighting them.

Id look for a copy of the grounding loan document first though.

I would do this through my solicitor

Shelflife

Why did the council wait 14 years to send a statement or look for payment ?

Has the interest been accumulating all these years?

Sounds like it was a small balance that was left over that has been accumulating charges and interest for 14 years.

First thing I would be looking for is a 20 year statement .

DeVore

Ok this just got a bit weird... this is an annuity on the house, ok fair enough... and there are some questions to be answered about probate and solicitors etc...

But the son's address was found by searching the Property Tax database and connecting the two addresses via a common Property Tax payer.


Ehhh... this is surely misuse of data under the Data Protection Act??? (though considering they "stole" most of that data in a smash-and-grab on the ESB database, its probably legal under some emergency law).

The story continues...