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Ash
Ash, Solicitor
Category: Law
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Experience:  Solicitor with 5+ years experience
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I took out an Equity share with. Housing association in 2008.

Resolved Question:

I took out an Equity share with. Housing association in 2008. It was under the CCA 2006. The agreement I signed said 'for illustrative purposes' the share is calculated similar to a loan and calculated as annual interest. I have never received a statement throughout the life of the loan, (s77a) and I paid off the loan in August 2015. They added £16000 to the amount originally borrowed. Also, I paid £7900 interest over the full life of the loan period. As they have breached the Cca for the whole life of the loan, was it ever enfirceable and can I have the £16000 + £7900 interest back.
Submitted: 1 year ago.
Category: Law
Expert:  Ash replied 1 year ago.
Hello my name is ***** ***** I will help you with this.To be clear, what did your agreement say about interest and statements etc?
Customer: replied 1 year ago.
The credit agreement says that 'as well as annual interest I must pay under this agreement, the amount I am required to pay when the loan comes to an end is linked to the value my home at that time. The agreement will be required to be repaid by the 25th anniversary. If you have to repay more than you borrowed, the effect will be similar to a loan under which you will pay credit charges at the rate your house has increased in value. It says that under this equity mortgage I will have to repay the repayment sum when I redeem this mortgage. The repayment sum will be the actual percentage of the actual sale price. I borrowed 35% from them, sold my house for £239000 and settled the loan with them after they added £16000 for the increase in the property. This equity loan was taken out under the protection of the CCA and the law says that if they breach, by not providing the necessary legal statements, as laid down in S77a CCA 2006 S6 then the Agreemnent is Non enforceable for the period of non compliance. They were non compliant for the whole life of the agreement and therefore how can they still profit from the equity increase which is, as the agreement says, for illustrative purposes, Quote' if your home increased by 7.14% each year, the sum you will pay when the mortgage is redeemed, will be equivalent to borrowing under a loan with an APR of 7.14% and you will also have paid the interest charges referred to above, unquote!I feel that this agreement together with the equity clause, should all be covered by the same breach and it is as is laid down, by the legislation not enforceable! The the act clearly states that the agreement is non enforcable and, in addition, no interest can be charged during the period of non compliance. This happens to be the complete life of the loan that was settled in August 2015. Therefore, how can the housing association take anything more than the original sum that I borrowed from them if the agreement is non enforcable?
Customer: replied 1 year ago.
http://www.netlawman.co.uk/ia/required-statements-regulated-agreementshttp://www.lexology.com/library/detail.aspx?g=ecd3ce75-e933-4dcd-9a9c-ed10fc7af5a5
Expert:  Ash replied 1 year ago.
What is it you want to achieve?
Customer: replied 1 year ago.
I want the interest of nearly £8000 which they have already offered to repay and I want the £16000 they took in respect of the equity share from an agreement that wasn't enforceable. That's it in essence.
Expert:  Ash replied 1 year ago.
You need to write and set out your losses and request a refund within 14 days or say you will go to Court within 14 days. You should make sure you send this signed delivery and keep a copy.If they do not refund you then you can issue proceedings in the County Court. You can either do this online at: www.moneyclaim.gov.uk or by completing form N1 http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n001-eng.pdf and take it to your local County Court.The Court will then issue a claim which a copy will be sent to the Defendant who will have a limited time to defend it, if not you can enter Judgment and enforce.If the claim is for £10,000 or less it will be a small claim so you will not need legal representation. Over this value you would need representation for trial.Can I clarify anything for you about this today please?
Expert:  Ash replied 1 year ago.
Alex
Customer: replied 1 year ago.
That's fine. do you think I have a valid point? when the legislation refers to non enforceable, does that mean that it is exactly that? I have looked for case law on this in respect of equity loans but couldn't find any.
Expert:  Ash replied 1 year ago.
I think you have an arguable point. There is no case law either way.Alex
Customer: replied 1 year ago.
Thankyou. take care.
Expert:  Ash replied 1 year ago.
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