|
Post by overthehill on Sept 6, 2020 17:09:29 GMT
The loan renewal was August 2018 so it depends how long the ping pong between the council and borrower had been going on. Can't see any logic to the borrower renewing the loan if he knew there was going to be a huge council charge slapped on.
I still don't believe the local charge takes priority over FS's first charge, the council are entitled to a second charge and they need to chase the borrower for any remaining balance. You've probably guessed I'm not a property lawyer, another one for the courts.
|
|
adrian77
Member of DD Central
Posts: 3,894
Likes: 4,122
|
Post by adrian77 on Sept 6, 2020 17:21:22 GMT
it is very simple if you read my post - the valuer clearly did not factor demolition costs into the valuation and he should have done so yet again this valuation was pie in the sky as evidenced by the current potential net realisation - this property was a hazard (Aug 1917) before this loan was issued. Sadly I am not an FS outsider although luckily not in this loan and I wonder how many more gold-plated horlicks there are going to be - happy now?
|
|
iRobot
Member of DD Central
Posts: 1,652
Likes: 2,440
|
Post by iRobot on Sept 6, 2020 18:23:34 GMT
it is very simple if you read my post - the valuer clearly did not factor demolition costs into the valuation and he should have done so yet again this valuation was pie in the sky as evidenced by the current potential net realisation - this property was a hazard (Aug 1917) before this loan was issued. Sadly I am not an FS outsider although luckily not in this loan and I wonder how many more gold-plated horlicks there are going to be - happy now? Strange. From FS DD " The VR is valuing the site at £225k / acre cleared land which is c. £560k / hectare." so I'd be surprised if this wasn't considered at some point in the valuers calculations, even if it doesn't explicitly set out an estimated sum for demolition / clearance of the existing structure. adrian77 - do you have a copy of the VR? (If not, would anybody in this loan be willing to PM me so as to arrange sending a copy, please?) [To break away and answer this question from ilmoro: No, the loan renewed 17/08/18 before the council-led demolition / clearance in Jan 2019 ] Also of note, when the loan launched, the accompanying blurb included: " They will also use the funds to clear and level the site as well as pay for architectural fees." Where FS are worthy of criticism is that they allowed the loan to renew without confirmation that the loan monies had been spent against the purposes for which they had been (partially) borrowed. Maybe there was no contractual obligation for the borrower to actually use the money in that way, in which case FS are to blame for not making that among the 'conditions subsequent' clauses and/or for not making it a 'condition precedent' for renewal. Had they done so, they could have stepped in and defaulted the loan so much sooner, possibly avoiding a costly LLC charge (could probably have found a lower cost alternative to LA appointed contractors) and certainly not racked up the interest in the meantime. But then this is FS ... There's no denying that, as events unfold with this administration, FS' directors / management are continually found to be wanting in any number of respects but it's important, I think, to at least be accurate and criticise based on known fact or at least investigable presumption, rather than wild conjecture. Doing the former helps build a credible picture which may assist matters further down the line. The latter, regardless of however much it provides temporary gratification, achieves nothing of lasting use.
|
|
adrian77
Member of DD Central
Posts: 3,894
Likes: 4,122
|
Post by adrian77 on Sept 7, 2020 10:02:22 GMT
totally agree with the above - it would be interesting to see the contract but the chance of that is slim...as I have said before it looks to me as if the FS model was to throw money at projects and then forget about them until they went into administration. I would love to be contradicted but I see no evidence of any audit trails for their loans e.g. what the hell happened to all of the money in the 6 figure loans etc. As I see it FS lent against a building hazard and making it safe should have been in the contract but I doubt that is was despite FS having "property experts". In an ideal world I would hope FS can be sued for negligence over this contract but I guess it will be yet another hefty loss the investors will suffer and that is before the wonderful 5% FS fee. The demolition costs seem high to me but local councils aren't known for their effficiency and landfill costs have rocketed over the last few years - can anybody in this business comment
I thank you
|
|
|
Post by multiaccountmanager on Sept 8, 2020 9:54:27 GMT
I have bought a fire-damaged property in the past and never had any such council charges whatsoever - so curious as to what is going on here - one theory I have (and I stress a theory so doubtless somebody will demolish it) is that this was judged a safety hazard and the council wrote to the owner to demolish it - as he has no money he did not do this so they did it for him and hence the charge. And this bloke kindly dumped this problem onto FS. As I said just google the asset and the info is there. No need to speculate. The council demolished it under powers in the Building Act 1984 because it was dangerous, and a drain on the emergency services due to all the incidents it was causing, and attempts to get the borrower to do it failed. Obviously all this happened after the FS loan was drawndown so I dont quite get all the criticism that they have missed something. Was this loan renewed after the demolition? Given it appears to have sold for £500k which AIUI is above the valuation Im struggling to see the basis for the criticism as an outsider. The renewal became active on 17 August 2018, so before the demolition date reported above. The valuation visit was in November 2017 and from the FS description of the Assets in the renewal, "As no works have been carried out, there are no further images of the property and we have not requested a further valuation"
There might be a valuation issue in that the valuation report makes a "remedial cost estimation" of only £55,000 for site rectification including demolishing and removing the fire damaged building. It is somewhat bizarre if a £55k allowance can apparently turn into a £260k land charge. However the report includes the comment that "the applicant has advised that costings in the order of £55,000 have been obtained for full remediation of the site" and that "further advice should be sought as to determine the cost of demolition and removal" In summary either a remarkably inadequate "remedial cost estimation of £55,000" appears to have been accepted by the valuer, or a rip off demolition cost has been incurred, courtesy of the local council.
|
|
|
Post by multiaccountmanager on Sept 8, 2020 10:41:23 GMT
The loan renewal was August 2018 so it depends how long the ping pong between the council and borrower had been going on. Can't see any logic to the borrower renewing the loan if he knew there was going to be a huge council charge slapped on.
I still don't believe the local charge takes priority over FS's first charge, the council are entitled to a second charge and they need to chase the borrower for any remaining balance. You've probably guessed I'm not a property lawyer, another one for the courts.
From this link LinkIt seems possible for a council land charge to take priority over existing charges. This is advice to local councils dealing with land charges:- "Then apply to the Land Registry on form AP1 to have the charge noted on the registered title. If the charge is to have priority over existing charges you will also need to complete and submit form SC"
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,788
Likes: 11,007
|
Post by ilmoro on Sept 8, 2020 11:39:46 GMT
As I said just google the asset and the info is there. No need to speculate. The council demolished it under powers in the Building Act 1984 because it was dangerous, and a drain on the emergency services due to all the incidents it was causing, and attempts to get the borrower to do it failed. Obviously all this happened after the FS loan was drawndown so I dont quite get all the criticism that they have missed something. Was this loan renewed after the demolition? Given it appears to have sold for £500k which AIUI is above the valuation Im struggling to see the basis for the criticism as an outsider. The renewal became active on 17 August 2018, so before the demolition date reported above. The valuation visit was in November 2017 and from the FS description of the Assets in the renewal, "As no works have been carried out, there are no further images of the property and we have not requested a further valuation"
There might be a valuation issue in that the valuation report makes a "remedial cost estimation" of only £55,000 for site rectification including demolishing and removing the fire damaged building. It is somewhat bizarre if a £55k allowance can apparently turn into a £260k land charge. However the report includes the comment that "the applicant has advised that costings in the order of £55,000 have been obtained for full remediation of the site" and that "further advice should be sought as to determine the cost of demolition and removal" In summary either a remarkably inadequate "remedial cost estimation of £55,000" appears to have been accepted by the valuer, or a rip off demolition cost has been incurred, courtesy of the local council. Thanks. Did a bit of googling and the remediation costs dont seem abnormal. 4 bed house demolition about £12k, guessing about 3-4 times that. Of course, just speculation that the land charge is for the demolition.
|
|
adrian77
Member of DD Central
Posts: 3,894
Likes: 4,122
|
Post by adrian77 on Sept 8, 2020 12:46:15 GMT
neither can I - unless this one was a punt hoping for residential planning permission.
sure is - given I regard the co-director as a "fixed" I wonder just what has actually happened here - maybe there was additional work to the demolition e.g. Japanese Pond Weed or maybe there has been some paper shuffling here and the council were owed money from another plot?
As I said interesing one to follow...
|
|
iRobot
Member of DD Central
Posts: 1,652
Likes: 2,440
|
Post by iRobot on Nov 4, 2020 18:00:43 GMT
Update just in: CG/FS have applied an interesting calculation to this one. The cynic in me cannot help but speculate that CG/FS are determined to obfuscate FS' fees calculations as much as they possibly can. Can't see this going unchallenged ....
|
|
iRobot
Member of DD Central
Posts: 1,652
Likes: 2,440
|
Post by iRobot on Nov 4, 2020 20:27:54 GMT
Back from dinner and I'm struggling to get my head around this.... Fact: Start date 17/08/2018 Fact: Expected end 16/02/2019 Fact: Current Status "Loan Defaulted" Q1: How does the FS 5% out outlined in 6.2.4 not apply? Q2: If quoting the Ts&Cs, how is it that the waterfall as outlined in 6.2.5 isn't being applied? As a reminder, 6.2.5 states (my emphasis): From todays update: Just how are FS deducting those administration fees - previously stated as not being the 'default loan administration fee' of 5% the loan value - ahead of lenders receiving their 'principal amount of loan'? By comparison, using the 'old' method of taking 5% of the loan amount - £14.5k in this instance - actually seems quite reasonable! fundingsecure2 - I think you need to revisit this one. CG and their legal advisors would appear to have got this one wrong on so many levels...
|
|
adrian77
Member of DD Central
Posts: 3,894
Likes: 4,122
|
Post by adrian77 on Nov 4, 2020 20:47:02 GMT
you are not the only one - I am totally baffled...
|
|
iRobot
Member of DD Central
Posts: 1,652
Likes: 2,440
|
Post by iRobot on Nov 4, 2020 21:40:24 GMT
The more I think about it, the more bizarre it appears. CG&Co seem to be pushing aside the 'usual' FS 5% fee on the basis that: " as there has been no sale of any asset, the additional fee of 5% due to FS pursuant to clause 6.2.4 of the Terms and Conditions will not apply." Doesn't the 'first legal charge against two plots of land' constitute an asset and, if so, as they've (presumably) been relinquished in recognition of monies received, hasn't 'a sale' taken place? Don't know what the guys and gals over as FS towers are smoking, but feel free to send some my way, please.
#lockeddownandloaded
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,788
Likes: 11,007
|
Post by ilmoro on Nov 4, 2020 22:07:45 GMT
The more I think about it, the more bizarre it appears. CG&Co seem to be pushing aside the 'usual' FS 5% fee on the basis that: " as there has been no sale of any asset, the additional fee of 5% due to FS pursuant to clause 6.2.4 of the Terms and Conditions will not apply." Doesn't the 'first legal charge against two plots of land' constitute an asset and, if so, as they've (presumably) been relinquished in recognition of monies received, hasn't 'a sale' taken place? Don't know what the guys and gals over as FS towers are smoking, but feel free to send some my way, please.
#lockeddownandloaded
No a sale hasnt taken place, the original borrower has agreed a settlement of the loan ... ownership hasnt changed so its not a sale. As for the rest ... havent a scooby ... oh & where does it say that FS are entitled to default interest ... how do they earn interest when they havent lent any money nor are they allowed to under P2P rules?
|
|
Mucho P2P
Member of DD Central
Posts: 943
Likes: 1,630
|
Post by Mucho P2P on Nov 5, 2020 1:11:52 GMT
The more I think about it, the more bizarre it appears. CG&Co seem to be pushing aside the 'usual' FS 5% fee on the basis that: " as there has been no sale of any asset, the additional fee of 5% due to FS pursuant to clause 6.2.4 of the Terms and Conditions will not apply." Doesn't the 'first legal charge against two plots of land' constitute an asset and, if so, as they've (presumably) been relinquished in recognition of monies received, hasn't 'a sale' taken place? Don't know what the guys and gals over as FS towers are smoking, but feel free to send some my way, please.
#lockeddownandloaded
No a sale hasnt taken place, the original borrower has agreed a settlement of the loan ... ownership hasnt changed so its not a sale. As for the rest ... havent a scooby ... oh & where does it say that FS are entitled to default interest ... how do they earn interest when they havent lent any money nor are they allowed to under P2P rules? Been looking at this one tonight, think the interest "earned" is derived from the interest spread between borrower / lender rates. CG having used so many different methods of arriving at fees/charges/interest/penalties etc etc for FS, if their record-keeping is not top-notch, then it will take time to unwind it all (for lender reimbursement) depending upon the court ruling. Nothing short of a bowl of spaghetti !
|
|
|
Post by defaultinator5000 on Nov 5, 2020 12:04:35 GMT
So the administrators are now awarding FS 15% instead of only 5%? It is clear who appointed the administrators and why.
|
|