asked the Minister for the Environment the regulations, if any, he intends making to prohibit the payment by mortgagors of the legal fees and expenses of financial institutions such as building societies, insurance companies and local authorities; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Financial Institutions' Charges.
11.
Under the Building Societies Regulations, 1987, a building society is prohibited from passing on to the borrower their legal costs in the investigation of title and I have no proposals to amend the regulations in this respect. Corresponding arrangements apply in the case of loans advanced by local authorities. I have no function in relation to insurance companies.
Is the Minister happy with the fact that building societies prohibited by ministerial order last year from passing on legal fees have now circumvented that ministerial order by introducing handling charges which in some cases amount to £80 and £100? The banks are largely ignoring the regulations in relation to legal fees and people at the lowest end of the income scale, those who qualify for SDA loans from the local authorities, must pay the legal fees in full. There is duplication, triplication, delays, tardiness and much red tape as well as cost.
Do not run away with yourself. The regulations as they now exist, and which I have no intention of changing at this time, prohibit a society from charging the borrower the costs incurred by them in the legal investigation of the title. The two areas they charged for heretofore were the investigation of title and the perfection of security, that would be the creation of the mortgage. They cannot now charge for the investigation of the title and this has resulted in a reduction of about half of one per cent, plus VAT. In relation to the other matter — the perfection of security — the Deputy is quite right, solicitors have been charging up to approximately £80. An agreement has now been sought with the Incorporated Law Society regarding the use of a standard certificate of title. I have written to them in the very recent past requesting them to standardise that charge for certification of title at the lowest possible level. I am satisfied that there will be a big saving there. As far as local authorities are concerned, I should say that any of them who were naughty and broke the rules have been told by me that that is not to continue as a practice. I understand they have now all complied. I have sought assurances from all local authorities that the matter referred to by the Deputy in so far as SDA charges are concerned in this area have been terminated. I should say I shall be pleased to hear of any local authority still not complying.
We must now deal with questions nominated for priority.