Recent media reports have suggested that NAMA is running into serious difficulties in valuing loans due to borrowers' lack of solid legal title to the the properties used as collateral for the loans.
Over the past decade, property developers were able to avoid paying stamp duty by not taking legal possession of acquired properties, but developing them under licence.
Brian Cowen had introduced Section 110 to the 2007 Finance Bill to close the loophole after pressure from Deputy Burton, but he never signed the Ministerial order necessary to give effect to this section.
It now looks as if Fianna Fáil's failure to act is coming back to haunt them; it could be NAMA's achilles heel.
EXACTLY.so you are saying that the previous owner still holds the title and if they can't prove he sold it to the developer NAMA will be chasing broke developers with no assets
This is all nonsense. If there was no title no security could have been given in the first place. I can't imagine any solicitor being so foolish as to give an undertaking to a bank in these circumstances (or can I?). If that is the case then the professsional indemnity insurers will be coughing up.
1) The claim that the tax loophole is somehow responsible for causing €20bn bad debts is crazy"As a result of his failure to close this loophole, it will now cost the Irish taxpayer not just the €250 million that the Taoiseach's own consultants, Goodbody Consultants, predicted at the time, but probably now a further €20 billion in bad loans. Not only are those loans bad but the underlying securities have no title.
From the Examiner article:is there any figures as to how many of these properties are in title limbo ?
Mr Cowen in 2008 as the property boom was slowing commissioned a study into the impact of closing off the loophole and was told by Goodbody Economic Consultants that it could have a negative impact on the property market.
The report said that over 40% of all land transactions in the country were using the loophole and they estimated that in 2006 its use cost the Exchequer about 250 million
I wonder if any farmers set up development companies, sold their own land to the company (financed by one of the NAMA banks), avoided stamp duty on the transaction, and now will end up with their land back after the development company default on the loan they cannot/do not want to pay back.i wonder have any farmers bought the sites back off the developers for a few hundred euro ?