Negative Equity - Mortgage given by Royal Bank of Scotlandon ex-local authority flat : LUSENET : Repossession : One Thread

We don't know if any one can help us in our situation but perhaps some one can point us in the right direction.

In 1991 we purchased a flat in a refurbished ex local authority block of flats with a 100% mortgage for £33,950 from the Royal Bank of Scotland. The developer at that time was known as Lodgeday Developments of Newark, Nottinghamshire, they had bought 3 empty blocks from Sandwell Council and refurbished 2 of them, the third was left derelict. They arranged a "package" for us and others who purchased flats in the block i.e. arranged mortgage providers, solicitor.

In 1993 the first of the purchasers of the flats put their property on the market for sale. Their sales fell through because NO banks or building socieities would give mortgages on this type of building because "it was not of standard construction" and that this had always been the policy.

We have also attempted to sell our flat, we have had interested parties but when they tried to obtain a mortgage they were once again told that no banks or building societies would give mortgages on the type of building.

I rang around a number of banks/building socieities and was told they do not give mortgage, particularly on ex local authoritiy high rise flats.

There are 144 flats in the block and 25% have been repossessed, people have just "walked away".

The "best" we have been offered is £20,000 cash, which came from some one who has bought a number of the properties, some for as low as £11,000, then letting them out at rents of around £350.00 per month.

We have tried to speak to the Royal Bank of Scotland to ask them the question "why did they give us and others mortgages on these properties which could never been sold again with a mortgage" but they have not responded and pass us around when we telephone them and say they need to speak to some one else and will ring us back, they never do of course.

I have been to see my local MP, Tom Watson, West Bromwich East who has said he will write to the Chief Executive of The Royal Bank of Scotland regarding out case.

The management of the block was originally Lodgeday themselves but in 1995 they sold the lease to a company named Property Connections of Brighton, Lodgeday it appears "disappeared" and abandoned the third block. Property Connections then in 1998 sold the lease to David Glass Associates (Hercules Group) based in London from whom we have just received another demanding letter telling us to pay up in 7 days or they will instruct their solicitors.

The management/service charge has risen from £45.00 per month for 10 months in 1991 with £50 ground rent per year. It is now somewhere in the region of £90.00 per month plus "other items" which constantly keep being added and we are now struggling to keep up with these extortionate fees, there is 2 lift cars and one has been out of service for somewhere approaching 3 months, the other regularly breaks down. We do have a residents association who are at this moment trying to sort this problem.

The local council pursued Lodgeday for many years and 2 months ago the third block known as Marshall House started to be demolished by a company known as Matrixgrade based in Derbyshire and when the block is demolished "luxury houses£ are to be built on the site, the name of the developers are Bournston of Derbyshire, and I believe there is a connection with Lodgeday Developments of Nottingham.

If there is anyone who is or has been in a similar situation, we would appreciate any advice.

-- Caroline & Catherine Tye (, August 04, 2002


My friend had experiences with Property Connections and then David Glass Associates. She purchased a conversion flat. The freeholder sold the freehold to St Marys Estates, who then were taken over by Property Connections and then David Glass Associates. The management and service charges soared. I dealt with Property Connections for a number of years trying to sort out her fees. The management charges soared, they charged numerous amounts for maintenance etc. and did not charge in accordance with the conditions of the lease. I managed to get an associate who lives near Brighton to visit their offices to check invoices etc. for the amounts they were charging as they refused to send them unless we paid a fee. Many mistakes were brought to light. They apoligise for some mistakes and credits were issued, but others were never resolved. I dealt with them and David Glass for over 3 years. Maintenance on the property wasn't carried out (e.g.the property hadn't been painted for 11 years, window frames were rotten). In the end we only paid them in accordance with the conditions of the lease. They kept threatening court action but never did take it. However we contacted many organisations e.g Leasehold Advisory Sevice and put our greviances in writing to the companies and their solicitors. Unfortunately for my friend the situation made her ill, she tried for 2 years to sell the property without success, in the end she voluntary surrendered it to the Building Society. The Building Society sold the property for £10,500, she had paid £24,500 for it 13 years earlier. She was left with a shortfall of £12.4k on this property. In the end because of her financial situation together with other matters she managed to settle with the Building Society for a small proportion of this amount. David Glass got paid the full amount (1.6k) we'd been disputing and willing to go to court over, because the Building Society paid them in order that they could sell the flat. Be careful when dealing with this company, check all the charges, make them prove the amounts they say they have paid out, make sure they are charging you the correct amount and if you don't think they are then let them know and don't pay them. N.B. You should have informed of the sale of the freehold by Lodeday and been given the chance to purchase it. I know the laws have recently changed regarding management of your own flats, not sure of the details though, but its probably worth you checking out(Leashold Advisory Service should be able to help you), as if my friends experience is anything to go by I wouldn't relay on David Glass to maintain the building correctly. I don't know if the above is of any help. Good Luck, you'll need it. Dealing with the Buidling Society regarding the shortfall was brilliant compared with dealing with Property Connections and David Glass.

-- (, August 04, 2002.

Did you ever point your intended purchasers to the bank of scotland for a mortgage, after all they gave you one

-- keith williams (, August 04, 2002.

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