18:20 PM, 18th May 2011, About 13 years ago 3
In his first article our Guest Writer and self styled “Accidental Landlord” Bill Main-Ian told the story of how he was catastrophically injured and some of the mental issues that he and his family faced thereafter. The story of how Bill got into property investing and triumphed through adversity is being shared in detail for the first time exclusively with readers of Property118.com
“SUB-PRIME LENDING WAS OUR SAVIOUR”
We were sitting in a 3 bed semi which was in a desirable area. We knew that it would rent out. So our problem was to find a suitable property to move to whilst keeping our semi and rent it out to pay for the huge mortgage we eventually knew we had to borrow. This is how we did it.
I decided to opt to use the Legal Protection Insurance that I had bought with my motor cycle insurance. I would never be without this type of insurance. I do question the necessity of many types of insurance though eg critical illness. The terms conditions and exclusions on insurance policies sometimes make claiming on them impossible and therefore the premiums paid are a waste of money. Obviously this is my personal opinion and readers should be aware I am not advocating any financial advice. When I claimed through the AA on this legal protection insurance they sent me to a solicitor on their panel of Personal Injury lawyers. I had no choice, I was given what was allocated. I now know that a referral fee is paid to the referrer and nothing is done to differentiate between panel solicitors. It is down to the client to discover the competency of their allocated brief. Is one really in a position to question this solicitor? What questions do you ask? I make no apology to those reading this, should you be disagreeing with me, because you have not lived this experience to see the frustration the system heaps on people. The client is vulnerable and needs confidence that the person acting for him will exact the best deal. Sadly I don’t think that happens all the time.
My wife, Catherine, and I were in a good financial position. We had paid off our mortgage with a series of capital repayments. We had scrimped and saved to do so. We had endured the last recession and the interest rate hikes to 17% and left our mortgage at that level, with the extra being used to make the capital repayment. What a revelation, the way the interest due tumbled month on month which showed us that no-one need suffer the financial rigors of bank interest rates if they apply their minds to repayment early. That lesson endures to this day. Our solicitor told us that most financial settlements are spent in 8 years. I am happy to say we are not in that position. One does not fritter away a capital sum. How many people know that? I am addressing a sophisticated readership, so no doubt you all do, but it is no surprise to you to know that the greater and general public do not know it.
So was my first solicitor competent? I am sure he was very capable at the level he normally dealt with, but I asked if he had ever dealt with an amputee before, to which the answer was, no. Not a good start. I asked him if he was good? Indignantly he replied, “Mr Main-Ian if you knew how much money I made last year you would know I am good.” I hesitated to call him a prat directly to his face but both Catherine and I thought it. We decided to let him proceed but we watched him and his actions like a hawk. I am very grateful for him for one action though, and that was to get an admission of 100% liability against the 17 year old girl, 3 weeks into a full licence after her test, that had momentarily lost her concentration and caused the accident. After her conviction for dangerous driving at Magistrates court she ran into my arms crying. We were both in floods of tears. She asked for forgiveness. I said to her I could not forgive her but that I didn’t hate her. Over the years I have had moments where I hated her but they did not last. Negative energy is so draining. My thoughts now about her are basically as they were then. It’s the best I can do.
First solicitor, Mr P, commissioned a first report on me. It was an Occupational Therapy report on my housing issue. Our old family home was very livable, we had spent a small fortune making it a family home for children. The quality Brinton’s Palace Velvet carpets that are 20 years old are still as good as new and our tenants usage hardly shows. Says something about putting quality into one’s properties and the cost effectiveness of it, but I digress. We were concerned with how a wheelchair was to be accommodated in our new lives. The report duly arrived and despite being a nice house it was condemned as not disabled friendly. The conclusion was we had to move home. This was a joint report so the conclusions should not have been in dispute, but they were.
We dissected the report, naively thinking that this was what we needed and the insurance company would fund. Oh no. The bottom line was the imperative, so claimants need to be reigned in. I asked Mr P how much I could spend on the new house ie the price bracket to search in. “Oh dear boy (prat) money and price is not how to look at it. Look at what she has said and look for a property according to your need.” Ok, I said. So we started looking in our area and actually quickly found a new build house that was fully disability compliant in a private road very near to us. I told Mr P and he asked how much. £1.1 million says I, and he choked on his corn flakes. When he recovered he said he would contact the other side. They queried the necessity for this and how we were to afford it, the report, having agreed it previously, it then became necessary to ask further and better questions of the report writer. She promptly reneged on her report and said most recommendations were merely advisory not compulsory. It had nothing to do with repeat business!
I took Mr P to task as we had merely followed his instructions. He explained there was a formula that lawyers use in calculating the amount of compensation courts would award when housing is an issue. He quoted and sent us details of the Roberts v Johnson case. I am not getting into the details suffice to say that you don’t get all the money for housing, which places the claimant at a disadvantage. I do wish I could do something to help others in this regard, the insurance companies would have a fit if all claimants did what we did. I am open to suggestions if anyone has anything to contribute. So low and behold price was an issue after all. I sacked him. I later learnt his negligence in representing me at this point resulted in him losing some of his costs. He played a funny game, attending a seminar on serious injuries and ‘bumped’ into the solicitor from the insurance company. He assured me he had not talked with the insurance solicitor and no way discussed my case. P*** I was switching on fast.
My next solicitor was a delight, if she ever reads this, I want her to know her initial actions after Mr P mentally saved us in ways I cannot write about publicly. That is not to say that we did not have disagreements, we did, and that is only right, it is after all the most important case one is ever likely to have. One needs to give all solicitors the benefit of your thoughts and knowledge and HOLD THEM to what they tell you and what the law allows. Problematic is the fact that normally claimants believe what they are told and don’t have the knowledge to counter what their solicitor has told them should that information be wrong and thereby ensure they are getting justice. Solicitors don’t tell you what to do, you tell them, they act on your instructions and the evidence that experts tell them in reports. The trouble is they play a game with the insurance company to get the money but put pressure on the client to accept less than what the law would say you are entitled to. The secret of success is factual numbers. They usually rely on guesswork and professional advice in reports. That advice is ALWAYS WRONG. The true figures one actually spends is where they are always right. So you need to spend but managed in a way that works. It is an art.
To that end, we started looking for a new house. The insurance company refused point blank to give us any money. The reason being that if they control what the claimant has, they can’t spend it to get the exact figures. Guess work then results = small payout = daylight robbery. Or am I being too cynical?
After visiting over 60 properties, viewing scores more from the outside and discarding hundreds on the paper sheets sent to us, we found our current home. Unbeknown to the insurance company we had a lump sum sitting in the bank from my pension. The residue pension that I was awarded was and is still very good, so we could take a risk. Catherine was beside herself with worry but I approached a mortgage broker and he obtained a self declared mortgage. I was at pains to tell him the truth. He did pass on the information to the lender and a letter from my solicitor advising the level of the claim satisfied them that their loan was secure. So, blazing a trail into the unknown we committed to the new house. Yahooooooo. Sub Prime rocks! We moved into our new home and rented out the old one. The old home was to be our refuge should our fight not work out. There were to be problem times at the end game but having an unencumbered property to return to was our insurance. I definitely am one of those who benefited from sub prime mortgages. The borrowings were enormous but we managed the money. That is another secret, one needs to manage money in and out in this fight. My reward, if you recall from chapter 1, was a surveillance team on my actions and movements. They must have been bored out of their wits. Lol.
The passage into the new home was not without arguments with experts and again it was report writing that was the root of all problems. So I will deal with that next time.
Next installment : Surveyors and backstabbing.