Requirements for communication during a loan, where do I stand?

hawk_eyye

Hi All,

I would be very grateful for some advice if I may ask.

Back in 2006 my partner took out a renovation loan with the local council. Urgent work was needed on the house and was funded in part council grant and part loan from the council. The loan was secured as a charge on the Freehold of the property. The loan was interest free for 5 years then interest bearing. We knew about the loan so searched for paper work and found what we are pretty sure is the last communication we have from the council on this dated 2011 at the beginning of the interest bearing period. The communication is a letter stating the interest rate is 3.13% and comes with a statement covering a period April 2010 to Jan 2011 showing interest added, calculated on stating the rate to be 3.13% (at standard National Rate). We calculated all or moving costs etc based on this.

As part of the sale our solicitor has requested and received a redemption letter from the council for this loan, but the letter states the interest amount on the loan is at 6.98% and the redemption value is unsurprisingly about £3000 higher than our calculations. I spoke with the council this morning and was advised that the 2011 letter is wrong, that they are not a loan company and don't provide statement (Which I have one of), and that there interest rate does not change. They also provided a copy of what is the original agreement in the form of a "HM Land Registry" / "Charge of whole of freehold property" document detailing the charge and loan. The document is signed by my partner and does indeed indicate an interest rate "Local Authority rate" of 6.98%. I have no reason to doubt it's genuine. I would like to be able to download a copy from the land registry to be sure but I can't find a way to request this type of document.

My question is first does anyone know where I could get an official land registry copy, and second where do we stand on the interest rate? I seems my partner did sign an agreement back in 2006 for 6.98%, but we had calculated based on the last communication from the council in 2011, that included a statement and indicated and interest rate of 3.13%. Are there any rules that should have been followed providing information on how the loan with growing in the 18 or 19 years there was no correspondence, and given the last communicated rate as 3.13% does this make any difference? the £3000 difference is quite a hole in our moving budget.

Thanks again...... John

tacpot12

I suspect that you won't get far with arguing that your partner only has to pay the lower rate. Although it's not fair that they sent a letter quoting the wrong rate, if it was wrong, it was wrong. You could try complaining, about the lack of  statements and the erroneous letter, and ask for a small discount on the settlement figure but I doubt you will get very far.

If your partner hadn't moved, they would have paid off the loan plus the 6.98% interest, so moving is going to save interest from now on. I would focus on the fact that you are saving money rather than loosing money.