Repayment Mortgage Decision Reference 2019-0257

• Case Outcome: Upheld
• Subject Matter: Repayment Mortgage
• Reference: 2019-0257
• Date: 06 August 2019
• Conducts Complained Of: Fees & charges applied (mortgage),
• Finantial Sector: Banking

Decision Ref:

2019-0257

Sector:

Banking

Product / Service:

Repayment Mortgage

Conduct(s) complained of:

Fees & charges applied (mortgage)

Outcome:

Upheld

LEGALLY BINDING DECISION

OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

Background

The Complainant holds a mortgage with the Provider in relation to a buy to let property. The

complaint relates to legal fees and charges which were applied to the mortgage account

without the knowledge of the Complainant.

The Complainant states that he was not made aware until July 2017, that a rent receiver had

been appointed over the property, after fees of over €2,000 had been applied to his account,

even though he raised a query with the Provider in relation to the first charge applied to the

account in September 2016. He accepts that the mortgage account fell into arrears between

2011 and 2016. He states that the fees and charges were applied to his account without

authorisation or consent.

The Provider states that despite the Complainant being dissatisfied with the solicitors’ fees

applied to the account, it is not in a position to reverse these charges.

The Complainant’s Case

The Complainant contacted this office indicating that he was having serious problems with

his mortgage account in relation to solicitors’ charges that been added to his account

without his knowledge. The Complainant states that on a call on 21 September 2016, he

rang the Provider and spoke to B in relation to a sum of €152.60 added to his account. B

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/Cont’d…

confirmed that these were solicitors’ fees and the Complainant asked him to remove these.

According to the Complainant, B said he would look into the matter by 28 September 2016

but failed to do so.

He states that he called the Provider again in January 2017 in relation to the fees added to

the accounts and pleaded with the Provider to stop adding the charges. The Provider stated

that the matter would be looked at but, month by month, further charges were added over

the next six months.

The Complainant states that he called the Provider on 12 July 2017 and spoke to X in relation

to total charges of over €2,000 that had been added. He states that when he called again on

18 July, when X had not reverted as promised, he learned that a receiver had been appointed

over the property and that some of the charges related to that appointment. He states that

at no time was he aware of this. He further states that there had been no contact from the

receiver to himself, to his management company, or to his tenants. He states that the

Provider gave him a breakdown of charges in the sum of €1,536.75 but the real charges were

more than €2,000. He states that had the Provider dealt with his query properly in January

2017, the additional charges applied thereafter would not have been necessary. He states

that his account is up-to-date, other than the charges that were added and that the receiver

has been discharged.

The Complainant has provided an email from his property management company dated 21

August 2017, advising that they been in place since March 2016, collecting rent of €1,100

per month which they continued to do. The email states that they received a phone call from

the rent receiver on 20 July 2017 advising that they had been appointed receivers of the

property and that the property management company should cease collecting further rent.

The receivers were asked to forward a copy of the deed of appointment which had not yet

been received by the property management company. This appears to have been the first

contact from the receivers.

The Complainant is seeking a refund of all charges and fees applied to the account. He also

states that he has been extremely stressed in relation to the issue since September 2016.

The Provider’s Case

The Provider states that after a three year interest only period, the Complainant’s

mortgage converted to full capital and interest payments in 2011. The interest rate

applying to the account is a tracker rate.

In relation to costs and expenses, the Provider relies on sections 12.2 and 12.4 of the terms

and conditions of the mortgage agreement which provides that:

“The Mortgagor covenants to indemnify the [Provider] against and to pay all costs

and charges incurred by the [Provider] of and incidental to: the protection, realisation

and enforcement of [the Provider’s] security including all legal costs charges and

expenses incurred by the Provider or on its behalf.”