Charging order, application for sale of property 23.04.2012, ***Dismissed***

[Annette1973]

Hi guys. Those of you who have been following my issues with bailiffs will be aware that my husband and I have lost our business and are having several issues with debt at the moment. I am hoping that someone can help me with the following problem.

 

We took out a lease on an empty first floor unit in our town to use as a beauty salon. Due to illness, we had to close the salon. The lady whose company owns the salon was aware of my serious illness and told us that if things got too bad we could end the lease early. We thought there would be no issues with us closing down as we believed she would stick to her word, however, when we attempted to hand the keys back she had a sudden change of mind and told us we would be charged till the end of the lease (we had 18 months remaining). We did not have the money to cover the payments so her company took us to court. In order to prevent the judge from making us bankrupt, we agreed to a charging order against our house and instalments of £200 PCM, the judge then put a stay of enforcement on the case as long as we stuck to the payments. In December we lost our main business, a barbershop, and went onto benefits. We immediately informed the landlord of the beauty salon and told her that we could no longer pay £200 PCM.

 

All went quiet for a while, however, I have now received a court application N244, stating that the claimant has applied for a lift of the stay and the amount of £12,950.58 from us, and, if we do not have the money, sale of our property so she may be paid. The date of the hearing is 23/04/2012

 

There are a few more details that I will fill you in on:

 

We were coerced into signing the lease in our personal names by the agents acting for the landlord. We were a Ltd company, however we were told by the agents that it did not matter if we signed in our names, so we naively took him at his word and signed our own names.

 

We were told by the agents, that the rent included insurance and maintenance charges, however, after the first month we get landed with a huge bill for the landlords insurance. We read the Law Society Lease that we signed and the wording is very misleading as it sounds like the landlord is responsible for paying the insurance, however, it also insinuated that we have to actually pay the insurance. One week after we moved in we had to redo the plumbing, at our expense as a pipe burst. We had to hire a plumber and a plasterer as the wall surrounding the pipe had to come down. We informed the agents, however, we were never recompensed for this expense.

 

During the first winter we spent there, the agents ripped out our heating and did not replace it. I have an email from them stating that the heating would be replaced, it never was and we had to buy expensive electric heaters, as you can imagine, massages and other body treatments were not possible without heat. We waited for 3 months for the agents to replace the heating befor we bought our own heaters and in that time we lost over £1,000.00 in trade as the salon was too cold for any kind of body treatment.

 

We never received a penny of our deposit back. The agents said that this Money was used for redecoration as we had left the property in a state. We asked for proof of this and they supplied us with a photo of one of the rooms which looked perfect and exactly as we had left it. We had several people help us to empty the property and all commented on how beautiful and immaculate we had left the property. We spent £2,000.00 on new flooring alone. When we took the property on it was horrendous. Every single door and surface was painted in a hideous shade of blue and there was a mouldy blue cord carpet on the floor. It cost us over £5,000.00 to get the property in good condition so that we could begin trading. The agent still claims that the property required redecoration as the incoming client was not happy about the colours etc..... As far as I am aware, the deposit can be held back for several reasons, however, not liking the decor, is, as far as I know not reason enough for holding back the deposit. I am very upset about this as, I know that property was immaculate and in a much better state thn it was before we moved in. Also, I borrowed the deposit money from my Mum and now I can't give it back to her. I should mention that the agent did not go through the property with us when the lease ended, and we did not agree any possible reasons to deduct anything from our deposit money.

 

Another issue we have is that the landlords solicitor has sent us quite a hefty bill for their court costs, however, the judgement we have from the court, says that there be no order as to costs.

 

Right guys, worry for the long thread, but I wanted you all to have the facts before replying. Thank you, in advance.

[wonkeydonkey]

Hi guys. Those of you who have been following my issues with bailiffs will be aware that my husband and I have lost our business and are having several issues with debt at the moment. I am hoping that someone can help me with the following problem.

 

We took out a lease on an empty first floor unit in our town to use as a beauty salon. Due to illness, we had to close the salon. The lady whose company owns the salon was aware of my serious illness and told us that if things got too bad we could end the lease early. did this come in writing? We thought there would be no issues with us closing down as we believed she would stick to her word, however, when we attempted to hand the keys back she had a sudden change of mind and told us we would be charged till the end of the lease (we had 18 months remaining). We did not have the money to cover the payments so her company took us to court.

did you defend?

In order to prevent the judge from making us bankrupt, we agreed to a charging order against our house and instalments of £200 PCM, the judge then put a stay of enforcement on the case as long as we stuck to the payments. In December we lost our main business, a barbershop, and went onto benefits. We immediately informed the landlord of the beauty salon and told her that we could no longer pay £200 PCM.

 

All went quiet for a while, however, I have now received a court application N244, stating that the claimant has applied for a lift of the stay and the amount of £12,950.58 from us, and, if we do not have the money, sale of our property so she may be paid. The date of the hearing is 23/04/2012 you can appeal this at the premliminary hearing, the notice is only the first stage of a complex process, so you need to file a response to acknowledge and your initial defence. It will then be heard for allocation and that is when you need to put a very detailed defence in place.

There are a few more details that I will fill you in on:

 

We were coerced into signing the lease in our personal names by the agents acting for the landlord. We were a Ltd company, however we were told by the agents that it did not matter if we signed in our names, so we naively took him at his word and signed our own names.

 

We were told by the agents, that the rent included insurance and maintenance charges,this should be in the lease agreement? however, after the first month we get landed with a huge bill for the landlords insurance. We read the Law Society Lease that we signed and the wording is very misleading as it sounds like the landlord is responsible for paying the insurance, however, it also insinuated that we have to actually pay the insurance.it is standard practice for the LL to take insurance and the tenant is expected to pay that along with their own insurance but again the lease should show that? One week after we moved in we had to redo the plumbing, at our expense as a pipe burst. We had to hire a plumber and a plasterer as the wall surrounding the pipe had to come down. We informed the agents, however, we were never recompensed for this expense.Your lease will likely have a clause to your maintenance obligations and it would be expected you would have claimed against your insurance for the damage.

During the first winter we spent there, the agents ripped out our heating and did not replace it. I have an email from them stating that the heating would be replaced, it never was and we had to buy expensive electric heaters, as you can imagine, massages and other body treatments were not possible without heat. We waited for 3 months for the agents to replace the heating befor we bought our own heaters and in that time we lost over £1,000.00 in trade as the salon was too cold for any kind of body treatment. this does give you reason to counterclaim as they will be seen to have breached agreement.

 

We never received a penny of our deposit back. The agents said that this Money was used for redecoration as we had left the property in a state. We asked for proof of this and they supplied us with a photo of one of the rooms which looked perfect and exactly as we had left it.they must give you a detailed costs breakdown to any dilapidation and show all estimates they received to have the work carried out. We had several people help us to empty the property and all commented on how beautiful and immaculate we had left the property. We spent £2,000.00 on new flooring alone. When we took the property on it was horrendous. Every single door and surface was painted in a hideous shade of blue and there was a mouldy blue cord carpet on the floor. It cost us over £5,000.00 to get the property in good condition so that we could begin trading. The agent still claims that the property required redecoration as the incoming client was not happy about the colours etc..... As far as I am aware, the deposit can be held back for several reasons, however, not liking the decor, is, as far as I know not reason enough for holding back the deposit. I am very upset about this as, I know that property was immaculate and in a much better state thn it was before we moved in. Also, I borrowed the deposit money from my Mum and now I can't give it back to her. I should mention that the agent did not go through the property with us when the lease ended, and we did not agree any possible reasons to deduct anything from our deposit money. yep counterclaim sounds good here as well

Another issue we have is that the landlords solicitor has sent us quite a hefty bill for their court costs, however, the judgement we have from the court, says that there be no order as to costs. that can be brought up at the premlim stage.

Right guys, worry for the long thread, but I wanted you all to have the facts before replying. Thank you, in advance.

 

This will take a while to get to Court in full so no immediate problem, it is a very complex procedure so it would pay you to get a solicitor involved who specialises in these matters.

 

WD

[Annette1973]

This will take a while to get to Court in full so no immediate problem, it is a very complex procedure so it would pay you to get a solicitor involved who specialises in these matters.

 

WD

 

Thanks WD. Hubby and I are currently looking for a solicitor. We have called all local solicitors, however, none of them are specialists in this kind of thing so we may need to go further afield. As you know, I cannot possibly visit a solicitor at the moment and hubby is not brilliant at this sort of thing. We need to get the hearing postponed for a few weeks. Is there a specific form I could fill in and get to the court to ask for a postponement or to have the judgment set aside for the time being?

[Annette1973]

I have just realised that I have not been sent an N9 response pack from the court, is this usual?

[Ganymede]

I have just realised that I have not been sent an N9 response pack from the court, is this usual?

 

 

 

You won't get one.

 

From what I understand from your OP the Claimant has made an application to lift the stay which is the first hearing. If permission is given they will make an application for an Order for Sale and there will be another hearing for that. Not sure why they bothered with making an application to lift the stay as you had defaulted on the payments so I would have just gone straight for the Order for Sale application but this is good as it gives you another chance to object.

 

An Order for Sale application is made under part 8 of the CPR instead of the usual part 7 for money claims. There technically is no 'Defence' for a pt 8 in the same way as a pt 7 so you will not get a response pack etc. You will get a chance to submit a Witness Statement to oppose the OFS application.

[Annette1973]

You won't get one.

 

From what I understand from your OP the Claimant has made an application to lift the stay which is the first hearing. If permission is given they will make an application for an Order for Sale and there will be another hearing for that. Not sure why they bothered with making an application to lift the stay as you had defaulted on the payments so I would have just gone straight for the Order for Sale application but this is good as it gives you another chance to object.

 

An Order for Sale application is made under part 8 of the CPR instead of the usual part 7 for money claims. There technically is no 'Defence' for a pt 8 in the same way as a pt 7 so you will not get a response pack etc. You will get a chance to submit a Witness Statement to oppose the OFS application.

 

Thanks for that, it makes things a bit clearer. I do have to get the hearing for the lift postponed as I have just undergone surgery and will not be well enough to attend. Do you know if there is a specific form I need to file for postponement or do I just send a request to the court?

[asokn]

You can complete form N244 which is the general application notice.

[Ganymede]

Thanks for that, it makes things a bit clearer. I do have to get the hearing for the lift postponed as I have just undergone surgery and will not be well enough to attend. Do you know if there is a specific form I need to file for postponement or do I just send a request to the court?

 

 

I would try writing to the Court in the first instance but you don't have much time.

 

An application will cost you but you are more likely to get the hearing adjourned.

[asokn]

It's a calculated risk because although an application will cost you may have it dealt with by the judge on paper and the new hearing date can be notified to the other side before the originally scheduled hearing so they do not attend.

 

If you write a letter it may be ignored entirely or just placed on the court file for the judge to look at in the hearing; you then run the risk of the hearing going ahead anyway or, if it does get adjourned, you being ordered to pay the other side's attendance costs which could be more than the cost of making a formal application!

 

Of course you could write to the other side first with medical evidence and ask them to consent to an adjournment with a warning that if they refuse you will be forced to make a formal application and seek to recover your costs of it from them.

[Annette1973]

Thanks asokn and GM. I think I will send an N244 to the court. As I am on JSA, I believe I can complete form EX160 to have the fees waived. I was unsure whether the form I needed to file was an N9 or a N244, so am grateful to you guys for casting the vote for the N244, so to speak, in helping me make up my mind.

[Annette1973]

Hi guys, quick update. I have filed an 'Acknowledgement of Service' with the court as well as a letter requesting postpone mention due to medical issues. I sent a copy of my operation details from the hospital and hope this is enough to get the court to grant me a postponement. Will let you know.

[Annette1973]

Hi Guys. I managed to get the hearing postponed until May 11. Today I have received a couple of emails from the claimant stating that we are not entitled to enter a defence as she is only seeking a default judgment, it is not a retrial. I told her that I was entitled to defend myself and she wrote back that 'the law doesn't work that way' and that I am not entitled to a rehearing even if I do have new evidence.

 

I informed her that, as far as I know, this is England and I have every right to justice.

 

My question is this. I have already entered a defence and counterclaim to the court for a hearing in May, however, I am now wondering if it would be best not to turn up to that hearing, wait for her to obtain her default judgment and then appeal it by using my new evidence that proves she was in breach of the tenancy agreement?

 

I also thought that maybe I should just apply for a rehearing right away instead. I am not sure what she is expecting to gain from the default judgment as we are on JSA and have offered a payment which we could realistically afford, however her company have not even acknowledged our offer, they ignored it and then served us with the summons. They refuse to communicate with us regarding our change in circumstances. I am hoping that a Judge would not find in their favour as we have attempted to settle this, to the best of our abilities, and the landlord has not even acknowledged our efforts.

 

Should I write to the court and ask that they disregard our defence and counterclaim because we now intend to apply for a rehearing? I am a bit stumped tbh. Any advice anyone can give would be fab.

[Gaston Grimsdyke]

Hate to tell you this but the Claimant is right. You have already consented to a judgment and a charging order over your home, so ypou can't now try and dispute the debt. There was a stay on enforcement to allow you to pay by instalments, but you have defaulted so now the Claimant is looking to lift that stay and enforce the charge by an order for sale. You can't now try and argue that you don't owe the money because the judgment - which you consented to - is final. I am not sure you have grasped the seriousness of the situation - the court might order you to sell your house at the next hearing.

[Annette1973]

I believe that I am entitled to oppose the default judgment as we weren't strictly in default because we lost our business and attempted to arrange a new payment plan based on our benefits, however, the claimant refused to acknowledge this. I do understand the gravity of the situation, however, I do believe that even if we cannot appeal this judgment, we can begin a new case against the claimant in regards to our newly discovered evidence.

 

Also, I would like to add that our home is on the Mortgage Rescue Scheme, and I think this may affect an enforced sale.

[Ganymede]

I believe that I am entitled to oppose the default judgment as we weren't strictly in default because we lost our business and attempted to arrange a new payment plan based on our benefits, however, the claimant refused to acknowledge this. I do understand the gravity of the situation, however, I do believe that even if we cannot appeal this judgment, we can begin a new case against the claimant in regards to our newly discovered evidence.

 

Also, I would like to add that our home is on the Mortgage Rescue Scheme, and I think this may affect an enforced sale.

 

 

 

You have a CCJ and an FCO so I'm afraid it is far too late to challenge the CCJ. YOu failed to pay as agreed and so defaulted, the fact the you tried to come to an agreement on lower payments does not change this.

[AndyOrch]

Hi Annette

 

 

You have a court hearing to decide whether a final charging order should be made.

 

You must go to the hearing. If you don’t go to the court hearing, a final charging order will be made automatically.

 

At the hearing, the judge will look at the evidence you have sent in to say why you don't want a charging order to be made.

 

They will also look at the arguments made by your creditor.

 

After considering the evidence from both sides, the judge will decide whether to make a final charging order.

 

If a final charging order is made, your creditor can either wait until you sell your property or apply to the court for an order for sale. They must apply for an order for sale if they want you to sell your property straight away.

 

There are several arguments you may be able to use to persuade the judge not to grant your creditor a charging order.

 

You may also be able to persuade the judge to attach conditions to the charging order which mean that your creditor can't force you to sell your property or which make it harder for them to do this.

 

You can get help to put your arguments to the court and to ask for conditions to be attached to the charging order.

 

At the hearing for a final charging order, the court must consider all the circumstances of the case before it decides whether to make the order and your personal situation is very important.

 

You may be able to use one of the following arguments to persuade the judge that a charging order should not be made.

 

There is very little or no equity in your property

 

Equity is the amount of profit you would make on your property when you have sold it and the mortgage has been paid off. If there is little or no equity in the property, your creditor wouldn’t get their money back if it was sold. This might apply where a mortgage or other secured loans have to be paid back first or where the value of your property is low.

 

Other creditors aren't asking for a charging order

 

If you have more than one creditor, the others may have agreed to let you pay back their debts by instalments, rather than asking for a charging order. You may be able to argue that you shouldn't have to grant one creditor a charging order if none of the others think it's necessary – especially if the others are owed more money.

 

Other creditors have priority

 

You may have other creditors who would need to be paid back first out of the proceeds of the sale of your home. This might leave little or no money to pay back the creditor who is asking for a charging order, so there would be no point in them getting one.

 

A charging order is unfair on other people who live with you

 

You may be able to argue that other people who live with you, such as children, an older person or someone with a disability, would be severely affected if your home had to be sold.

 

There are other ways to pay back the debt

 

It may be possible to argue that there are other ways to pay back the debt than through a charging order. Some of these may be better for you, depending on your circumstances.

 

Other ways of paying back the debt include:

 

an instalment order, where you pay back what you owe in instalments

an attachment of earnings order, where the money you owe is taken out of your wages. This would only be useful if you are employed and your job isn't at risk

an administration order. You could ask for this if you owe credit debts of less than £5,000 to more than one creditor. An administration order allows you to make one regular payment to the court. The amount of the payments depends on what you can afford to pay. The court then divides the money up and pays your creditors what it thinks is the fairest amount. As long as you keep making the payments, your creditors can't take any further action against you, although they can ask for the decision to be reviewed

 

A time order. This is an order that extends the length of time you have to repay the debt. You can also change the amount you pay each month. Time orders are particularly useful if you want to stop or reduce the amount of interest you are paying on top of your debt. Time orders are only granted on credit debts such as a credit card or other loan.

 

There may be other arguments you can use to persuade a judge not to grant a final charging order.

 

Regards

 

Andy

[Ganymede]

Andy, unless I am mistaken the OP already has the FCO and the application is now to lift the stay on the enforcement of the FCO and apply for an OFS.

 

Unless I am reading it wrong...

[Annette1973]

Andy, unless I am mistaken the OP already has the FCO and the application is now to lift the stay on the enforcement of the FCO and apply for an OFS.

 

Unless I am reading it wrong...

 

Sorry GM, my fault. Andy is correct however, the CO is not yet final. I didn't explain myself very well.

[Ganymede]

In order to prevent the judge from making us bankrupt, we agreed to a charging order against our house

 

 

 

Are you sure there is no CO?

 

If so things are as bas as Gaston and I thought. Although still serious.

[AndyOrch]

" In order to prevent the judge from making us bankrupt, we agreed to a charging order against our house and instalments of £200 PCM, the judge then put a stay of enforcement on the case as long as we stuck to the payments.

 

Andy

[Ganymede]

" In order to prevent the judge from making us bankrupt, we agreed to a charging order against our house and instalments of £200 PCM, the judge then put a stay of enforcement on the case as long as we stuck to the payments.

 

Andy

 

 

Does that not mean enforcing the FCO? I.e no OFS can be made whilst £200.00 payments are maintained?

 

I think the OP needs to clarify exactly what has happened...

[AndyOrch]

Annette I am right to assume that this is a joint debt, both yours and hubby's name on the initial judgment?

 

Regards

 

Andy

[Annette1973]

Hi Annette

 

 

You have a court hearing to decide whether a final charging order should be made.

 

You must go to the hearing. If you don’t go to the court hearing, a final charging order will be made automatically.

 

At the hearing, the judge will look at the evidence you have sent in to say why you don't want a charging order to be made.

 

They will also look at the arguments made by your creditor.

 

After considering the evidence from both sides, the judge will decide whether to make a final charging order.

 

If a final charging order is made, your creditor can either wait until you sell your property or apply to the court for an order for sale. They must apply for an order for sale if they want you to sell your property straight away.

 

There are several arguments you may be able to use to persuade the judge not to grant your creditor a charging order.

 

You may also be able to persuade the judge to attach conditions to the charging order which mean that your creditor can't force you to sell your property or which make it harder for them to do this.

 

You can get help to put your arguments to the court and to ask for conditions to be attached to the charging order.

 

At the hearing for a final charging order, the court must consider all the circumstances of the case before it decides whether to make the order and your personal situation is very important.

 

You may be able to use one of the following arguments to persuade the judge that a charging order should not be made.

 

There is very little or no equity in your property

 

Equity is the amount of profit you would make on your property when you have sold it and the mortgage has been paid off. If there is little or no equity in the property, your creditor wouldn’t get their money back if it was sold. This might apply where a mortgage or other secured loans have to be paid back first or where the value of your property is low.

 

Other creditors aren't asking for a charging order

 

If you have more than one creditor, the others may have agreed to let you pay back their debts by instalments, rather than asking for a charging order. You may be able to argue that you shouldn't have to grant one creditor a charging order if none of the others think it's necessary – especially if the others are owed more money.

 

Other creditors have priority

 

You may have other creditors who would need to be paid back first out of the proceeds of the sale of your home. This might leave little or no money to pay back the creditor who is asking for a charging order, so there would be no point in them getting one.

 

A charging order is unfair on other people who live with you

 

You may be able to argue that other people who live with you, such as children, an older person or someone with a disability, would be severely affected if your home had to be sold.

 

There are other ways to pay back the debt

 

It may be possible to argue that there are other ways to pay back the debt than through a charging order. Some of these may be better for you, depending on your circumstances.

 

Other ways of paying back the debt include:

 

an instalment order, where you pay back what you owe in instalments

an attachment of earnings order, where the money you owe is taken out of your wages. This would only be useful if you are employed and your job isn't at risk

an administration order. You could ask for this if you owe credit debts of less than £5,000 to more than one creditor. An administration order allows you to make one regular payment to the court. The amount of the payments depends on what you can afford to pay. The court then divides the money up and pays your creditors what it thinks is the fairest amount. As long as you keep making the payments, your creditors can't take any further action against you, although they can ask for the decision to be reviewed

 

A time order. This is an order that extends the length of time you have to repay the debt. You can also change the amount you pay each month. Time orders are particularly useful if you want to stop or reduce the amount of interest you are paying on top of your debt. Time orders are only granted on credit debts such as a credit card or other loan.

 

There may be other arguments you can use to persuade a judge not to grant a final charging order.

 

Regards

 

Andy

 

Thanks Andy, this is extremely helpful, you have put my mind at rest a little. The CO is not final, yet. The hearing is in couple of weeks, however, I am concerned regarding attending the court as I am disabled and have been suffering agoraphobia for a few years now and this is how I got myself into this situation as I could not attend court at the first hearing so found my only option was to agree to the CO.

 

The Judge did attach conditions restricting the sale of our property, I have just read the paperwork properly without panic clouding everything.

 

I believe that my best option would be to use the relevant arguments you pointed out to ensure that the claimant cannot force me to sell my home, and then to begin my own case against them regarding their breachnof the lease, if I am not entitled to appeal the current judgment.

 

I have already sent in a defence and counterclaim to the court, along with copies of my evidence that I do not owe the amount the landlord is claiming. Is there a way I can strike that out and instead inform the judge of my reasons for not being forced to sell my house, and that I intend to start proceedings against Zionstone for my claim against them? I guess I was just a little too hasty, I panicked because of the time limits etc....

[Annette1973]

Annette I am right to assume that this is a joint debt, both yours and hubby's name on the initial judgment?

 

Regards

 

Andy

 

It is supposed to be a joint debt, Andy, however, the judgment is only in my husbands name. The tenancy agreement is in both names. I questioned this and was told by the claimants solicitor that the court only allowed one persons name on the paperwork.

[Ganymede]

Thanks Andy, this is extremely helpful, you have put my mind at rest a little. The CO is not final, yet. The hearing is in couple of weeks, however, I am concerned regarding attending the court as I am disabled and have been suffering agoraphobia for a few years now and this is how I got myself into this situation as I could not attend court at the first hearing so found my only option was to agree to the CO.

 

The Judge did attach conditions restricting the sale of our property, I have just read the paperwork properly without panic clouding everything.

 

I believe that my best option would be to use the relevant arguments you pointed out to ensure that the claimant cannot force me to sell my home, and then to begin my own case against them regarding their breachnof the lease, if I am not entitled to appeal the current judgment.

 

I have already sent in a defence and counterclaim to the court, along with copies of my evidence that I do not owe the amount the landlord is claiming. Is there a way I can strike that out and instead inform the judge of my reasons for not being forced to sell my house, and that I intend to start proceedings against Zionstone for my claim against them? I guess I was just a little too hasty, I panicked because of the time limits etc....

 

 

 

This doesn't help as you seem to contradict yourself again regarding the Charging Order.

 

Do you have copies of the Court Orders?

 

 

IF, and it is a big IF, the hearing is for a FCO you cannot start going on about the debt amount being wrong as there is a CCJ for £X and that is the debt at the moment. The DJ will no go behind the figure in the original CCJ.

 

You need to make an application to set aside the CCJ to be heard immediately before the FCO hearing if this is the case. But as you agreed to the CCJ amount (and Charging Order by the sounds of it) it is unlikely you will get a set aside.