ustin Burke, who runs Galway Bay Stud, said he was compelled to act out of frustration at seeing the properties “go to rack and ruin” during a housing crisis and over his concern that lost rental income exacerbated his debt position.
AIB obtained a €5.8m judgment against Burke and a €1.55m judgment against his wife Anne in July 2015 on their consent. Burke, who now regrets agreeing to that order, said the bank had appointed receivers to 14 properties that he owned in January 2014 after he got into difficulty on his repayments of commercial loans taken out for working capital and the purchase of development land.
Although the bank quickly sold off nine of the properties, Burke said five of the remaining houses have been left derelict for some nine years.
The Burkes claim the bank has a series of legal problems that bring into question the validity of the receiver’s appointment.
Burke said he does not deny he owes AIB money but he does not understand why the bank will not agree to settlement negotiations that will address his issues, which include an acknowledged overcharging by AIB on his tracker mortgages and the non-collection of rent at the “abandoned” houses over the last nine years.
He has received a report showing he lost out on €1.3m in rent up to June 2021 from the five houses not being occupied.
He contrasted what he said was the bank’s refusal to negotiate with him with reports that DJ Carey, the former Kilkenny hurler, had much of a €9.5m debt written off by AIB.
“The DJ Carey thing really boils me,” Burke said. “There’s hundreds more people in the country just like us. They have houses that they can put people into. They can get resolved and move on with life. That’s the frustrating thing.
“We have a problem with housing but we have a problem with banking too, and the legacy issues there have never been sorted. We are left hanging nine years later and they can’t sell them because their legals are wrong.”
Four of the houses are in the Garraí Sheáin estate of 28 homes in Roscam built by Burke’s father Gerard on the family’s land. The houses were originally split between Burke, his siblings and their parents.
Luke Charleton from EY was appointed receiver by AIB over the properties in 2014. The four Garraí Sheáin houses seized by Charleton border Burke’s farm and he said he grew increasingly frustrated about their condition as squatters moved in and the gardens became overgrown over the last nine years.
Last October 2 he decided to act and entered the four houses and a fifth located in Doughiska. Burke changed the locks and began bringing the homes back into habitable condition with an estimated spend of up to €60,000 per house and hours of work by him and his friends.
“All the houses were left vacant,” Burke said. “Many windows were boarded up. People moved in and broke the front doors and they threw them out again. Basically, I just had enough of it. I had to maintain the grass. I was the security minding them. I decided in October I’d had enough.
“There were briars growing over the back doors. Inside, they were destroyed. The ceilings were falling down and there were sleeping bags from squatters. I’m just sick of it. I thought this is the only way they will talk to me.”
Burke said he has since moved in tenants into the four houses in Garraí Sheáin and is keeping the rent received in a dedicated account. He said the tenants include a man who lived in the estate for 18 years but who was evicted from a house that was sold off. Another tenant is a woman and her two children who were homeless before Burke rented her one of the houses and she wanted to move in even before the boiler was repaired.
“The point is at least there is light on and heat in the houses,” he said. “The people are paying the bills themselves. The people moved in from November. Some of them moved in before the heating was ready because they were in dire straits. They all had heat by Christmas.”
He said it was January 25, almost four months after he took control of the five properties that he received an “urgent” letter from Whitney Moore, solicitors for the receiver, accusing him of trespass and interfering with the receivership.
The letter gave him until February 1 to cease his actions or it would take action, which could include taking High Court proceedings to restrain his actions in relation to the five properties.
Burke contends the receiver’s slow response to his seizure of the properties is a sign the bank knows there are legal problems with the receivership.
Burke’s solicitors, Lawlor Kiernan Partners, responded on February 1.
The letter said: “Your client owed a duty to our clients to reduce their indebtedness by realising value from the secured assets. Instead, your client has caused a loss by allowing the properties above to first fall vacant and then into disrepair. It is not acceptable and is a dereliction of duty that your client has reduced the value of the properties, waited for more than nine years to sell the properties and did not earn a rental income over the years.”
The letter also accused the receiver of causing the Burkes a loss by selling properties below market value. The letter said if the receiver took court action then he should bring the Burkes’ correspondence to the court’s attention.
AIB and EY would not comment last week. The bank has separate legal actions outstanding against both Burke and his father in the High Court.
The Sunday Independent has seen correspondence between Cathal Hardiman, a manager in AIB’s Litigation Management Team, and Daniel Lannon, a mediator appointed to represent the Burkes in 2019.
In May 2019, Lannon proposed that the Burkes pay €1m to AIB to settle their debts and in light of what he claimed were a series of irregularities in relation to the receiver’s appointment and the bank’s handling of the Burkes accounts.
He complained that the receiver was appointed without the bank issuing a letter of demand to the Burkes.
They also complain that they did not sign a letter of guarantee which AIB relied on to appoint a receiver over the properties.
In response, Hardiman wrote on May 24, 2019, that the offer of €1m was “nonsense stuff” and a “not a runner”. He said the Burkes, including the parents and other siblings, owed €14m.
In another email on May 31, Hardiman said up to €400,000 could be written off due to the bank’s error on Justin Burke’s tracker mortgage accounts but this needed Burke’s agreement.
Hardiman declined to meet Lannon because he said he only held meetings where there was “genuine engagement” but “we are nowhere near that”.
“To be honest the settlement offer you relayed made me think this is a waste of time,” he wrote.
He asked Lannon to substantiate a series of allegations he had made about the bank and the receiver. “The bank has already shown a willingness to own mistakes and that won’t change,” he said. “That said, we need to move beyond accusations if there’s going to be progress.”
In an email sent in July 2019, Hardiman complained that Lannon and the Burkes had not provided details of their complaints about the bank and the receiver or made genuine proposals to move things forward. He said it was open to the Burkes to take legal action and that “litigation might compel you to substantiate the very serious claims you have made to date”.
In August 2019 Hardiman said all future correspondence with the Burkes would be through the bank’s solicitors.
Speaking this weekend, Burke said: “If everything was rosy in the receivership camp, on October 3 or that week they would get an injunction to put me out. If right be right. That leads to more questions about the state of their legal situation. I know there is the law of the land but also there has to be some fairness.”