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Unregistered
08-25-2009, 07:38 PM
I'll try to keep this simple but need help fast as we're told the bank started legal proceedings in June, to repossess our home.

In December 2007, during a torrential rain storm, part of the roof of our house collapsed. We were visiting England at the time and didn't know until our neighbour called to tell us.

We put in a claim on the buildings insurance and the contents insurance which was a policy sold to us by the bank where we have our mortgage. The insurance refused to pay because they said the roof wasn't maintained (?) and wasn't covered by the policy. Even if the roof isn't covered, surely the accidental damage that happened inside and also the contents should be covered?

We came back to Spain and moved to rented accommodation and struggled to pay both rent and our mortgage but we had hoped the insurance would pay something so the house could be lived in again. Last September the bank renewed the same insurance policy! We protested that they hadn't paid when the house had a roof so why would they pay when there wasn't one? The bank insisted we must pay the insurance so we asked for a copy of the policy to show what is covered but we still haven't received it.

At the same time my husband had very little work (he's registered autonomo) and we were furious that they used the money we scraped together to pay the insurance company. By December we could no longer pay rent and mortgage and had to pay the rent because we have 3 children that need a home to live in. We had repeatedly asked the bank to help us with the insurance company because they were the ones who insisted we have cover to protect their charge on the property.

We also asked them to restructure our mortgage so we could continue to pay it, the rent and save for a new roof. They refused.

In April we had saved enough to do the roof and almost enough to pay all the arrears so my husband went to speak to the bank to offer to pay all the arrears by the end of August. The bank agreed they wouldn't start legal proceedings if we made payments to clear the arrears. By July we had paid them around €6000 and had just €1800 left to pay. My husband went to pay the €1800 plus July and August's mortgage payments, during the 1st week of August and the bank told him he now had to pay an additional €1300 for late fees and interest. He went back the next day to pay that and they told him he now had to pay another €3000 because they had instructed their lawyer in June!

We don't have the €3000 and now we also know the townhall also want €6000 to give us a license to put the roof back on so that's €9000 in total. We have tried so hard to pay the mortgage and save the money for a new roof and now it looks as though the bank will repossess the house anyway. All of this could have been avoided if the insurance company had paid. We can't take the insurance company to court because we were told it will cost thousands and take 2 years - we can't wait that long which is why we saved to do the work ourselves. We still can't understand why the bank renewed the policy again last year because other insurance companies have told us the house is not insurable without a roof.

We bought the house in September 2004 and increased the mortgage in March 2006. Both times, the bank sent a valuer and the bank arranged the buildings insurance to protect their interest in the property. Why then don't they care that the insurance company have not paid anything and the house is now virtually a ruin? Is there any way out of this mess? There must be something we can do to make the insurance pay and to stop the bank taking the house? I'm beginning to wish we'd given them the house back when the insurance first didn't pay but we tried to do the right thing and just keep getting kicked in the teeth for our trouble.

Lawbird Lawyer
08-26-2009, 09:22 AM
Dear Madam,

Nevermind the Building Insurance. You are not focusing the problem correctly. You are being sucked in by a minor issue when you should be giving all your attention to the arrears.

Your priority is to clear the mortgage arrears ASAP or else you will be repossessed, period; your roof or lack of will matter no longer.

Please read carefully our article on the matter of Spanish bank repossessions and the serious legal and financial repercussions this will have for you in the future, both in Spain or elsewhere:


Bank Repossessions in Spain: A Legal Perspective (http://www.marbella-lawyers.com/articles/showArticle/home-repossessions-in-spain-defaulting-on-mortgage)- 25th of June 2008

You must stall the repo procedure reaching an agreement with them without delay.

Yours faithfully,

Unregistered
08-26-2009, 07:16 PM
Thank you for your reply.

I have tried to reach an agreement with the bank to pay them and even went to pay all the arrears but they will not stop the repossession unless I pay another €3000 for their legal fees and I just don't have the €3000.

I understand that if I don't have the €3000 and they repossess my house then they will keep following me for my entire life but what else can I possibly do? I am just a human being that has been forced into this position because the insurance haven't paid. If I didn't have buildings insurance then I would be prepared to take full responsibility but I did have an insurance policy. I didn't know the roof would cave in and they wouldn't pay. If they'd paid then I wouldn't have arrears because I would be living in the house.

I work, I pay my bills and my rent and feed my children. I even saved enough to pay all the arrears but I just don't have the extra €3000 for the bank's legal fees so what more can I possibly do if they won't negotiate?

I don't even know how far the legal proceedings are or if the bank have already been to court. I haven't received any letters from the bank or the court. Surely I should have something in writing before they can just take my house?

I really am struggling to understand why the bank will not negotiate so I can keep the house. They get my house, sell it and I have to pay the difference for the rest of my life just because they will not negotiate.

If it goes to court will the judge consider my offer? I have offered to pay the bank all the arrears, interest and bank charges but I need time to pay their legal costs - maybe paying a little each month or the bank can add it to my mortgage.

Thank you again for you reply.

Lawbird Lawyer
08-27-2009, 09:20 AM
You're welcome Madam.

Normally banks are fairly inflexible. On you falling in arrears by more than 3 months, or even sooner depending on the wording of the Mortgage deed, they will accept no less than full payment of all outstanding amounts.

Insurance companies normally take a while to pay, so relying on them should not be an option.

What you must understand is that there are dozens of thousands of borrowers, if not more, in your same situation. Banks cannot entertain to wait longer as they have their own problems right now.

I'm afraid I cannot give you more advice on your matter other than trying to drive a hard bargain and reduce the amounts requested, spread them in installments or else pay up ASAP teh full amount.

Falling in arrears in Spain is avery serious matter as it may lead to being repossessed with all the associated consequences that will have for the rest of your life.

What you must not allow is for them to repossess you, that's the red line that must not be crossed for your own sake. You cannot do even follow a dación en pago at this point in time.

You will receive at your home address the notification of the law court. August law courts are shut down on holiday leave.

If there's any way you can raise these funds I strongly advise you do.

Yours faithfully,