I’ve started a small claim against a builder to recoup money paid in advance for work not done. I’ve sent two letters as per process and he disputed the claim, saying the money paid in advance was put towards cost overruns on other work he did for me. This was not agreed with me in advance. I’ve since hired another builder to complete the work not done.

Now legal action has been launched he has decided not to dispute the claim. However, rather than acknowledge the claim he has contacted me directly to say he is selling his house and he is willing for me to have a charge on the property to the value of the claim (including costs) but he wants to do it out of court so he doesn’t have a CCJ against his name.

I can’t see the property on the market via rIghtmove.co.uk. That doesn’t mean it’s not for sale though. He has told me that the mortgage company has a charge on the property but there is enough equity to pay the claim after the mortgage. He says he can’t afford to pay the claim outright and can’t get a loan. The claim is around £7.5K so I doubt he has movable assets that could be sold to that value which means, even if I did pursue the claim, the best I would probably get is a charge on the property.

I want to settle this amicably as possible. I don’t think he’s a crook, he’s just disorganized, got out of his depth on a large job and let the budget get out of control. We had a good working relationship for two years before it fell apart on this job. So, questions:

1. Does this seem a reasonable proposal and how would I go about implementing this?

2. How can I check the value of any charge the mortgage company may have?

3. How much does it cost to put a charge on a property and how can I do it?

4. I assume I should seek some sort of written guarantee of his proposal?

5. I also assume I should apply some sort of time limit to selling the property at which point I would reinstated the claim if the house is not sold – maybe 3 months, or 6?

6. What should be done on MCOL? Should he acknowledge the claim saying he does not dispute the amount or would that result in a CCJ? Or should I just leave it dormant for three months then request a judgment it if the sale falls through?

7. Would it be safer to decline this proposal and proceed with the claim?

Well he certainly sounds like a very honest and decent man and in a way I feel quite sorry for him.

I don't know the answers to all of the questions you are asking such as how much the cost to put a charge of property et cetera – although these are expenses which he should very properly pay rather than you.

I think the best thing to do would be to sue him and then to settle on a Tomlin order. A Tomlin order will be in agreement between you which is signed off by the judge which will lay down certain conditions such as – that he agrees immediately that a charge should be placed on his property to the value of £X pounds.

That the charge be redeemed by him within a certain time – say 12 months (better make it a very reasonable amount of time) and that on redemption, all claim fees et cetera and also interest (normally 8%) on the agreed sum owed will be paid the same time. In default of which you will be free to proceed to obtain judgement on the agreed sum plus interest plus costs and to enforce it in any way you see fit.

You puppy need to think about the details a bit more.

The good thing about a Tomlin order is that it means that there is no judgement recorded. It is a sort of informal agreement but which is formalised by the courts. If he fails to abide by the terms of the Tomlin order then you are free to move in as per the terms of the agreement. If he abides by the Tomlin order then you get your money and he gets no judgement against him stop

Thanks for the tip. A Tomlin order seems to be exactly what I am looking for. I've never heard of one of these so will do some research on it.

Yes he is a decent chap but he's also very good at playing the heart strings, so I don't feel sorry for him anymore.

If you suspect him in the slightest, then I would suggest that you go in heavy, issue the claim as soon as possible after having given him a written warning, and then once he has the claim papers you can negotiate over the Tomlin order.

There is a strong risk that he won't take you seriously until he has the claim papers

Claim has been issued. That's when he agreed on the charge. He has also agreed to costs and interest.

My two pence.

I would suspect that he will never pay you, charge or not.

His equity is probably so small that he prefers to get a charge rather than start paying you.

I would secure a ccj and make him find the money to clear his credit otherwise he won't be able to get another mortgage, loan, building merchants credit etc.

Don't let him mess you about, if he really wants to avoid a ccj he needs to pay you.

The advantage of a Tomlin order is that you can phrase it that you bet the charging order, and within the Tomlin order also an agreement to clear the charge within x months, else you release the charge and can go back to get a CCJ.

That way you still hold the ability to obtain a CCJ if that is what you feel is the main lever.

2 main scenarios where this wouldn't run smoothly : if there is insufficient equity to cover your charge, or if he goes bankrupt once you release the charge. However if either of these are risks, they are still risks if he goes bankrupt now.

If you get a CCJ now: he may not be able to trade and thus may further worsen his financial position! That isn't your major concern but could impact on your ability to enforce any judgment.

So after a lot of toing and froing I have got the builder to agree to a Tomlin order and a charge but I'm having a hell of a job finding a lawyer to set it up. I've been quoted £400 for just the Tomlin order by one (they won't do the charge because apparently that's conveyancing which they don't do). Another has quoted me £600 to do both but doesn't return my calls. On top of that there is a £100 court fee for registering the Tomlin order and a £50 fee to the land registry for placing the charge. Do the lawyer costs seem about right? Can anyone recommend a lawyer in Brighton? Seems finding a reliable lawyer is just as difficult as finding a reliable builder - which is ironic!

Only a court fee of £50 for the Tomlin......and £50 Land Registry...why not draft it yourself?

CAG does not refer or recommend Solicitors/Litigators

Andy

I did look at drafting it myself but want to make sure it's water tight and was worried I might misword something and leave some loophole if the agreement all goes bad at a later date. Court fee is defo £100 I checked with the county court business centre already. Maybe it goes up over a certain amount? My claim is over 7K with costs. I'll have to rely on Facebook friends for recommendations I have a barrister friend who works in corporate law so she’s asking round as well.

Fair enough they must have increased the County Court fee..a while since I have done one.

Simple to draft though...plenty of examples here on CAG...save your self £600

No luck with any lawyers. Can find loads of references to Tomlin orders on CAG but no actual example documents. Starting to think the best option might be to request a judgement via MCOL and try to enforce the judgement via a charge that way. Claim was issued 9th June and has not been acknowledged so past due and eligible for judgement.

Problem then is builder gets a CCJ and the sale will probably fall through so it's a catch 22. Anyone know how that works? If you have a CCJ and a charge on the house your are selling then presumably you will be refused a mortgage on a new purchase even if the CCJ is cleared when you sell. Or will they take that into account?

Clearly all the legal talk about Tomlin orders worked. Builder has just paid in full by bank transfer. Should I wait a couple of days before marking the claim as paid. paranoid the bank transfer could get reversed. Can't think how. Just amazed he paid up so quick in the end.

Cant be reversed ...inform the court hes paid...thread title amended to reflect the outcome...well done.

Andy