A young family has been forced to rent out their home and borrow money from friends after charging more than $ 80,000 in early termination fees.
British couple Justin and Annabelle Parfitt, reality TV stars turned property developers, bought an undeveloped loft in Berlin three years ago with the intention of refurbishing and reselling it.
But the couple, the founders of FastLife, a speed dating company now owned by Plenty of Fish that was featured in a 13-episode reality TV series called Love Incorporated, are now facing a nightmare situation.
Former reality TV stars Justin and Annabelle Parfitt bought a loft in Berlin three years ago
To buy the Berlin property, the couple received a mortgage and a development loan from the German lender Commerzbank, for a total amount of approximately € 550,000.
The Parfitts planned to sell the property as soon as the renovations were complete and use the proceeds to fund another development in Bali.
But they soon got into a dispute with their contractors – which eventually went to court – and the property was left unfinished.
In need of liquidity, the couple decided to cut their losses and sell the undeveloped property.
But when it came time for Justin and Annabelle to repay their loans, they were shocked when Commerzbank quoted an early amortization fee of $ 41,000 – much higher than they expected.
Justin said, “I thought Commerzbank must be mistaken because the figure seemed so high, but they assured me it was the correct figure to terminate both loans. I didn’t like it, but I accepted the situation. ‘
The pair had expected the sale to raise around € 140,000, which would have been enough to complete their other project in Bali. The numbers still piled up with Commerzbank’s prepayment fees, but only barely.
But the situation quickly deteriorated: Six months later, when the property was resold, the couple were shocked to discover that the bank actually charged them € 83,000, more than double what was originally quoted.
“I couldn’t believe it,” Justin said. ‘If I had known that the fees would really be that high, I absolutely would not have continued with the sale. This was a devastating blow to us shortly after my daughter was born and just before the lockdown started. ‘
When he approached the bank for an explanation, Justin was told that the original quote was a mistake, calculated for just one of the loans instead of both.
‘My wife and I were incredibly worried. We just couldn’t believe that a bank could admit that they had made a mistake of this magnitude and then refuse to put it right. ‘
An email from Commerzbank to Justin, seen through This is Money, says the bank, ‘A letter was sent to you in July 2019 with an indicative and non-binding amount and no binding statement [sic]. The letter clearly only calculated one loan and unfortunately not both.
“I am very sorry for the situation for you as a family and that unfortunately comes down to the fact that the investment does not lead to the desired goal.”
With such a high fee, the Parfitts could not afford to develop their two other properties in Bali. With no income, Justin says they were forced to rent out their family home and stay with friends and family to make ends meet.
The family eventually had to sell the undeveloped property after a dispute with the contractors
“It has become quite difficult,” he said. Our young daughter misses her friends. But the only way to pay our mortgage is to rent out the house. ‘
Since Justin got nowhere with Commerzbank, he decided to take his case to the German ombudsman.
He says once he did, the bank decided to withhold the proceeds from the sale of the property until the ombudsman issued a ruling.
I could not believe it. If I had known the costs were going to be this high I definitely wouldn’t have continued with the sale – Justin Parfitt
He said, ‘I assumed there would be a judgment within a month, as stated on the website.
But then Commerzbank told us they planned to withhold the undisputed proceeds from the sale of our property until the ombudsman made a ruling, right after they requested a one-month extension of the arbitration proceedings.
‘This was our money – there was no disagreement about that – how could the bank refuse to send our own? Obviously, trying to force us to drop the case with the ombudsman was a trick because the bank knew we desperately wanted to get the money quickly.
“In order to be able to live and run our business while we waited for our money, we found ourselves in the humiliating position of asking friends and family to borrow our money.
The family planned to sell the renovated property to finance a development in Bali
‘To be honest, we were very lucky to have friends and family from whom we could borrow. What would we have done differently? ‘
The Parfitts originally expected to receive the sale proceeds in February, but waited until June.
He said: “Commerzbank has offered me € 12,000 as a goodwill gesture, on condition that I have signed a nondisclosure agreement. But that wouldn’t even start to compensate me.
‘At that point, the bank’s manipulative behavior became even clearer, because € 10,000 is the maximum reward the ombudsman can impose.
The bank clearly thought the ombudsman would rule in our favor, and they thought an extra $ 2,000 would buy our silence.
“It’s been a tiresome, depressing process, but I’m determined to go through this – we have to pay back the loans to our friends and family.”
The Parfitts are still waiting for a ruling from the German ombudsman.
When asked for comment, a Commerzbank spokesperson said: “The matter is currently being clarified with the Ombudsman of the Association of German Banks. So we cannot comment on that. ‘
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