Repossession & Unfair relationship

[SittingDuck]

I have received a form N5c and a repossession claim set for 4 April 2014

 

In 2005 with a friend I bought a rundown shop to knock down, build a new one and turn it into a business. The Bank agreed to fund a percentage of the purchase price and to finance the build when we attained planning permission. On this basis we bought the shop!!!

 

Flat

March 2007 I bought a flat. The bank had a legal charge over this (see legal charge referred to in The Bank POC) It was my intention to let out the flat and to apply for planning permission to extend it to the side to create a small flat for me to live in.

September 2007 I attained planning permission for the small flat. I was given a further unsecured loan for £50,000

 

October 2007 the overdraft was increased for 14 days at a cost of £200 and secured without my knowledge to the flat I owned.

 

Late 2007 my friend and I attained the planning permission to knock the shop down and build a new one. We had paid the loan for a year and a half whilst we applied for planning permission. The loan repayments and planning costs were in excess of £30,000. As we now had planning permission we asked the bank manager for the agreed funds to build the shop. Our bank manager said he couldn’t fund the build, this is when the credit crunch hit. As we couldn’t therefore develop the property we were left with a rundown dilapidated shell.

 

My friends core business couldn’t therefore expand. His business was with the same Bank and they restricted his cash-flow so he didn’t have any money. I was then left paying the loan for the shop.

 

I was therefore left trying to build the flat and at the same time pay for the loan repayments on the shop. As I was paying the loan my cash-flow was affected and my current account was being charged with unpaid charges of £35.00 and referral charges of between £40 and £90. I complained to th Bank through my bank manager about these charges, he said he would look into it, he never gave me a reply. As my cash-flow was impeded the bank manager then agreed to increase my overdraft for a short period and charged me another £800.00 for doing this. I explained that this whole thing was spiraling ant that the bank were just milking charges. My Bank manager agreed told me he wasn’t happy with how the bank was changing and the things he was being asked to do, he sadly left after having a nervous breakdown. His replacement confirmed that the Bank still wouldn’t loan for the build of the shop and told us that the Bank were calling in all their property loan facilities around the country.

 

The shop had now been empty for 2 1/2 years. In its dilapidated undeveloped state we were forced by the Bank to put the shop on the market for sale, this was during the price crash at the bottom of the market. Due to this situation I became ill with depression and reactive arthritis and couldn’t work.

 

Whilst the shop was on the market for sale I continued to struggle to pay the loan repayments and referral fees were charged to my account along with the occasional £35 cheque return fee. Inevitably the overdraft increased again with a fee to cover these charges. I again complained with no response.

 

July 2008 the overdraft was increased to £60,000 for a period of 4 months with another fee.

September 2008 I was bouncing cheques again

December 2008 I paid some money in that I borrowed from a friend. the overdraft was then renewed and reduced to £50,000 This renewal was charged again at £750

 

January 2009 a bank manager I had not met before rang and wanted to meet me urgently. He came out to a tea room with two loan agreements backdated with someone else from the banks signature. I remember this and thinking this was odd. One was for the £68,000 and the other was for the £65,000 he was in a hurry and said that these had to be signed now otherwise the Bank would call in all of my facilities.

 

A few days later I then got a letter acknowledging receipt of the agreements I had signed it stated:

 

‘I note that we are yet to receive information relating to your sources of income to confirm serviceability of the interest repayments’

 

One of the agreements I signed was for a previously unsecured loan, they had now managed to secure this against my flat. These new loans were now exempt from (sections 16B and 189 (1) and (2) Consumer credit act 1974)

 

April 2009 we eventually sold the shop, the shop loan was cleared and in August 2009 my latest bank manager left as he couldn’t cope either, he left to work for one of his clients and charged another renewal fee.

 

The stress and uncertainty due to this situation was unbearable for me, I was still living with depression and couldn’t function or work properly.

 

January 2010 I was emailed by a special relationship manager to arrange a meeting with me and his colleague a Senior bank manager’s, he wanted to understand the risks to myself and the bank. I then met with them in a cafe. They knew I was struggling and offered to consolidate all of the borrowings at 5-6% over base. I was paying 2.5% over base at the moment. I explained that the overdraft was made up of unfair charges and fees. One of them then said ‘I don’t understand why you don’t want to make an agreement and risk losing everything including your family home’ I said I’m not risking it, that’s just unfair and untrue, the only reason I’m here is to discuss with you the way forward, I am happy to work with you and the Bank to move forward, but I’m not happy with these bully boy tactics and I think its unfair of you and the banks to try and mislead people into getting them to sign up to agreements with raised interest rates’

 

The next day I copied them the minutes of the meeting. I heard nothing for a month and then I received an overdraft facility written on the 27th February 2010 that expired on the 18th February 2010 signed by my Special relationship manager. This was confusing and worried me further. I rang my special relationship manager on several occasions to ask what was going on. I had no reply for a while.

 

07 June 2010 I sent a letter to the ‘Senior Bank manager’ that I’d met in January to ask what was going on. I said I was worried about the changes of managers. I explained that I didn’t understand the agreement that the special relationship manager had sent on the 27 February 2010 and that there was so many things wrong and I didn’t understand my accounts and the various agreements. I disputed the amounts as I didn’t think the figures were correct because of all the previous unfair charges and high fees and account changes.

 

09 June 2010 I received a letter dated 28th May 2010 being a formal notice of intention to file a default The Notice was served under section 76 (1) and 98 (1) of the consumer credit act 1974

for account number xxxxxx (This was the overdraft account.)

 

It stated: Your overdraft is repayable on demand being made by the bank and such demand will terminate the overdraft arrangement. The bank intends to demand payment of the total amount outstanding as set out below (if necessary by Court action) and accordingly terminate the overdraft arrangement on or after 14th June 2010 unless by that date you have made an alternative arrangement for repayment which is acceptable to the bank.

Principal sum £ xxxxxx

interest to the date shown above £ XXX

Total outstanding £ xxxxx

 

 

This gave until 14th June 2010 14 days from the 28th May. The amount was still in dispute and It did not give time to remedy

 

9th June 2010 I therefore sent a Subject Access Request to request my paperwork, various stalling tactics were used by the Data controller at the Bank in order to not send me my paperwork.

 

11 June 2010 I then received a letter from the senior bank manager acknowledging my letter and complaint of the 7th June 2010.

 

25th June 10 I received a letter dated 21 June 2010 stating that ‘where your accounts are regulated by the consumer credit act you have failed to comply with the requirements set out in the recent default notice/termination notices served on you. By this further notice we are terminating all banking facilities, please now make alternative banking arrangements. Your current account will only be available to accept credit payments to reduce/repay the debt.

We now demand that you pay no later than 7 days from the date of this letter the total amount outstanding on the accounts as detailed above.

 

26 June 2010 I then received a letter from another bank manager, this had a slightly different and softer tone saying they’ll give me 8 months more time to build and that I should pay the tenants rent into the overdraft account. (This is the one they terminated)

 

9th September 2010, 90 days after the original subject access request and after further persistence, I eventually received incomplete paperwork

 

I do feel that things would have got much worse if I hadn’t recorded conversations and then notified the Bank of this fact.

 

I started again to build the property on the side of the flat. However I had to stop again and reapply for planning. I explained this to the Bank.

 

They left me alone for a time whilst I have been building. However for the last 9 months the Bank has been sending me 15 day possession notices.

 

January 2013 The Bank wrote to me confirming formal demand for the total sum of the overdraft and two loans was made in June 2010 and that they had not received satisfactory repayment proposals.

 

January 2013 I wrote back and said I have outstanding complaints and asked what settlement they would be happy with.

 

February 2013 They wrote back and said there wasn’t any outstanding complaint.

March 2013 I rang and complained that they didn’t recognize my complaints, and asked if they would freeze interest whilst they were looking into my complaint. The lady said no. I asked what proposal was acceptable she said you must pay the balance of all of the money within 7 years minimum.

March 2014 The bank sent a letter saying they were going to send a Surveyor to value the property.

March 2014 I received a 15 day notice of possession Proceedings Notice.

April 2013 I complained again and told the Bank that they were deliberately ignoring my complaint. I explained I was paying the rent into the overdraft account. I offered to pay the rent into the account for 7 years (their default would have dropped off) and then I would remortgage. I asked them to confirm if this was acceptable.

 

June 2013 The bank wrote bank and said 'they were not able to agree with my complaint. I am sorry I am also unable to agree with your complaint about the closure of your accounts being unfair treatment. This is because your accounts are not closed, but open and non-operational in line with Bank policy.'

They ‘acknowledged my comments about being treated unfairly and agreements being forced upon people. They replied ‘ that all new applications/products are offered in line with stringent application processes that are regulated by the FSA. Furthermore each application is provided on the basis of completed affordability checks as well as other assessments. I must now advise that unless you’re in a position to make continued monthly repayments of £2355.82 the bank will enforce debt recovery against xxxxRoad (the flat) This is a non-negotiable figure.

 

January 2014 the Banks Solicitors wrote to me stating: they were going to issue court proceedings.

 

They said the following options are available to you:

 

1 Repay the full amount outstanding or refinance

2 Put forward alternative proposals you may wish our clients to consider

 

 

Jan 2014 I sent a letter to the Bank and complained again about the charges on the overdraft and the way I was treated with my accounts being closed and defaulted. I offered a full and final settlement figure of £ 65,000 (offered to me by a family member) I had no reply from the bank so I rang them and they said they were not taking further action. I have still to this day not received a reply to my offer of settlement.

 

27 January 2014 I sent a Subject Access Request to understand my position. I’m still awaiting to this day for my data.

 

24 February 2014 I received a N5c Claim for possession form from the Court

 

 

 

I have been living in a campervan and have spent every spare penny on this flat. Even though not all the services are connected I now stay in the flat when I’m working there and intend to finish this in 6 months (cash permitting). To this day I have continued to pay all of the rent into the overdraft account. This is the account I cannot use as it is terminated, this is the account made up of all of the unfair charges. The balance has reduced marginally in 4 years due to the rent payments.

 

All the money I earn I have used to continue the building, for weeks I’ve had nothing. It is not easy building with your bank account being unuseable. As I have a default issued against me I cannot get finance and I have continuously hanging over my head the threat of knowing that at any point the Bank can step in and take the property.

 

The Bank has been waiting for me to create value with the intention of taking the property has been sole destroying. I do believe I have been treated unfairly and that for 7 years I have been caught in a dark place. A place made up of them promising to lend and then changing their mind and then for 7 years paying their fees that are a consequence of their actions.

 

Now the Bank has had the flat valued and have seen it is almost built and only needs a few thousand pounds to finish it off the Bank have sent a possession notice. I have continually made offers in writing and on the phone and have complained that the figures are unfair and incorrect and in dispute. They ignore the complaint and tell me whatever I offer is not enough. I have even asked them what they would accept. They have told me that they require the whole lot paid back in 7 years, this works out at more than £2355pcm and is ‘non-negotiable.’ The rent is only £350pcm. They know I cannot afford this. The Bank relies on the fact that as they have issued a default notice I cannot borrow elsewhere over a longer more affordable period. As per the Lawrence Tomlinson Report he accused RBS of operating like a "hit squad" by withdrawing lines of credit from healthy firms and burdening them with huge fees so they could seize the businesses assets, normally property, at discount prices.

 

All I have tried to do is to build myself a property, If the bank repossess I have been through this nightmare for 6 years for nothing, The tenant in the flat I own next door to the one I am building is vulnerable and doesn’t work due to mental health reasons. She has a six month tenancy agreement and we get on really well, she doesn’t want to leave.

 

This forum has given me hope and I now feel I may have options, I can see that numerous other people and small businesses also had facilities chopped and changed, or stopped. It is now evident that during the credit crunch Government banks in particular needed to shore up their balance sheets and manage down exposure for certain assets, property related in particular. Escalating loan charges, and repossession had become profitable for these banks. Many small businesses were manipulated and treated unfairly by the banks. The banks have disproportionate power in their relationship with their business customers, small businesses are unable to fight back. I do not know how to move forward or deal with them so I am looking for help.

 

 

1) Do I defend the repossession and deal with the unfair relationship and claim back the unfair charges and costs during this defence?

 

or

 

2) Do I put in a separate claim for unfair relationship?

 

3) I do not know how to defend this repossession or challenge the agreements and unfair charges.

 

Thank you

 

Kind regards,

 

SittingDuck

Edited March 13, 2014 by SittingDuck

[f16]

SittingDuck, Welcome to CAG.

I've read your post and I know what you are saying about the banks. Been there, Done it, Got the tee shirt and made the film !

The banks keep making out that they are "Helping you". All they are doing is "lining their own pockets".

I know it's hard and difficult (Trust me, I can hear you saying: To put it mildly )

The advice on this CAG is first class. Good luck with this. Others will advise how best to move forward.

F16

[SittingDuck]

F16

 

Thank you for your kind words of support, hopefully someone will be along today. I am worried that I need to give a reply to the court today. I do not want to miss this deadline or put in the wrong thing!!!

 

Kind regards,

 

Sittingduck

[Ell-enn]

Hi, don't stress about getting the defence to court 14 days before. That's what's on the court forms but courts will accept the week before (and even the day before) - you need to get the defence right. I am at work and pretty busy at the moment but will get back to you later and perhaps someone else will be able to point you in the right direction in the meantime.

[SittingDuck]

Ell-enn

 

Phew, pressure off for today. Thank you,I hope you have a great day!

 

Kind regards,

Sittingduck

[honeybee13]

3) When I rang the court they said I had to reply to them with a defense within 14 days. Is this correct? IF SO I NEED SOME HELP BY TODAY! CAN SOMEONE PLEASE EMAIL ADMIN AS MY MESSAGES SAY THEY ARE FULL AND THEY ARE NOT!I CANNOT SEND A LINK TO THIS THREAD BY PRIVATE MESSAGE TO PEOPLE THAT CAN HELP.

 

Hello again.

 

I've alerted the site team to your thread in case anyone can add anything, but Ell-enn replied while I was doing that. She's a very good repos person and you're in good hands.

 

You don't have enough posts to PM anyone but site team at this stage, I'm afraid.

 

HB

[Lea_HTH]

Sounds like an all monies charge to me.

 

Redact personal information from the claim form and PoC and post them up.

[SittingDuck]

Thank you everyone.

 

Here is the Claim for possession:

 

In the Eastbourne County Court

 

 

1. The Claimant has a right to possession of:

 

 

9, xxxxxxxxx Road, XXX XXX (being all that property composed in Title number ESX xxxxx

 

About the mortgage

 

2. On 5th March 2007 the Claimant and the Defendant entered into a mortgage of the above premises. A copy of the Mortgage is served herewith.

 

3. To the best of the claimants knowledge the following persons are in possession of the property:

 

The defendant remains in legal possession of the property but it may be occupied.

 

4 (b) The agreement for the loan secured by the mortgage is not a regulated consumer credit agreement.

 

5. The claimant is asking for possession on the following ground (s):

 

(a) the defendant has not paid the agreed repayments of the loan and interest.

 

The said Legal Charge also provided:-

 

(a) That the property was charged by the defendant by way of Legal Mortgage to secure the discharge on demand to the Claimant Bank of the Defendants’ obligations to the Bank (“the Mortgagor’s obligations) together with interest at the date of discharge and expenses.

(b) The said Legal Charge also provided:-

 

(1) the Mortgagor was the Defendant:

(2) the Bank was the Claimant:

(3) interest was the rate charged to the Mortgagor by the Bank:

(4) the Mortgagor’s obligations were all the Mortgagor’s liabilities to the Bank of any kind (whether present or future, actual or contingent and whether incurred alone or jointly with another) including banking charges and commission:

(5) interest will be calculated both before and after demand or Judgment on a daily basis and compounded quarterly on such days as the Bank may select.

 

(b) because:

 

The Mortgage secures all the Defendants’ liabilities to the Claimant of any kind, and is repayable on demand.

 

6. The amount loaned was all monies loaned to the Defendant by the Claimant are secured by and repayable under the terms of the Mortgage. The sums secured and repayable at the date hereof are as follows:-

 

Account Balance Daily rate of interest

(Bus overdraft acc number xxx) £57k £X.XX

(Bus loan acc number xxx) £68K £X.XX

(Bus loan acc number xxx) £65K £X.XX

 

TOTAL £190K £X.XX

(b) The current terms of repayment are: (include any periodic repayment and any current payment of interest)

 

1. On demand

2. In the event of any other breach of the terms of the Mortgage or Loan Agreement.

 

© The total amount required to repay the mortgage in full as at the date hereof (not more than 14 days after the claim was issued) would be £190,575 taking into account any adjustment for early settlement. This includes £575.00 payable for solicitor’s costs and administration charges.

 

(d) The following additional payments are also required under the terms of the mortgage.

 

£NONE for (not) included in 6 (b)

 

(e) Of the payments in paragraph 6(d), the following are in arrears:

 

arrears of £ NONE

 

(f) this next bit is crossed out The total amount outstanding under the regulated loan agreement secured by the mortgage is.

 

(g) Interest rates which have been applied to the mortgage:

 

Account (this is the business overdraft account number)

(1) at the start of the mortgage 7.25% p.a

(2) immediately before any

(3) at the start of the claim 2.50% p.a.

Being the contractual rate above the Claimants Base Rate from time to time in force namely 2.00% ABR

 

Account (this is the 1st business loan number)

(1) at the start of the mortgage 7.25% p.a

(2) immediately before any

(3) at the start of the claim 2.50% p.a.

Being the contractual rate above the Claimants Base Rate from time to time in force namely 2.00% ABR

 

Account (this is the 2nd business loan number)

(1) at the start of the mortgage 7.25% p.a

(2) immediately before any

(3) at the start of the claim 2.50% p.a.

Being the contractual rate above the Claimants Base Rate from time to time in force namely 2.00% ABR

 

7. The following steps have already been taken to recover the money secured by the mortgage.

The Claimant has fully complied with the Mortgage Pre-Action Protocol in so far as it relates to these proceedings and has commenced action against the Defendant as the protocol has achieved no resolution of matters with the Defendant. Copy correspondence is served herewith.

 

About the Defendant (s)

 

8. The following information is known about the defendants’ circumstances:

(in particular say whether the defendant is in receipt of social security benefits and whether any payments are made direct to the claimant)

The Claimant has no information about the Defendants’ circumstances which could aid the court.

 

(Delete either (a) or (b) as appropriate)

 

9 (a) There is no one who should be given notice of these proceedings because of a registered interest in the property under section 31 (10) of the Family Law Act 1996 or section 2(8) 0r 8(3) of the Matrimonial Homes Act 1967 (copy served herewith)

 

(b) this next bit is crossed out Notice of these proceedings will be given to who has a registered interest in the property.

 

Tenancy

 

(Delete if appropriate)

 

10. this next bit is crossed out A tenancy was entered into between the mortgagor and the mortgagee on A notice was served on .

 

What the court is being asked to do

 

11. The claimant asks the court to order that the Defendant:

(a) give the Claimant possession of the premises:

(b) pay to the Claimant the total amount outstanding under the mortgage.

 

Statement of Truth

 

*(The Claimant believes) that the facts stated in these particulars of claim are true

 

* I am duly authorised by the Claimant to sign this statement.

signed XXXXX date

 

Full name xxxxx

 

Name of Claimants Solicitors firm xxxx

 

Position of office held PARTNER

 

 

Then there is microfiche copy of a legal charge. Here is part:

 

Powers of the Bank

4.1 The bank may without restriction grant or accept surrender of leases of the Property and the Charged Assets

4.2 Section103 of the Law of Property Act 1925 shall not apple and the Bank may exercise its power of sale and other powers under that or any other Act or this deed at any time after the date of this deed.

4.3 The Bank may under the hand of any official or manager or by deed appoint or remove a Receiver or Receivers of the Property Charged Assets and the Goodwill and may fix and pay the fees of a Receiver but any Receiver shall be deemed to be the agent of the Mortgagor and the Mortgagor shall be solely responsible for the Receiver’s acts defaults and remuneration.

4.4 All or any of the powers conferred on a Receiver by Clause 5 may be exercised by the Bank without first appointing a Receiver or notwithstanding any appointment

4.5 The Bank will not be liable to account to the Mortgagor as mortgagee in possession for any money not actually received by the Bank

4.6 Section 93(1) of the Law of Property Act 1925 shall not apply to this deed.

4.7In addition to any lien or right to which the Bank may be entitled by law the Bank may from time to time without notice and both before and after demand set off the whole or any part of the Mortgagor’s Obligations against any deposit or credit balance on any account of the Mortgagor with the Bank (whether or not that deposit or balance is due to the Mortgagor)

4.8 Despite any term to the contrary in relation to any deposit or credit balance on any account of the Mortgagor with the Bank that deposit or balance will not be capable of being assigned dealt with mortgaged or charged and will not be repayable to the Mortgagor before all the Mortgagors Obligations have been discharged but the Bank may without prejudice to this deed permit the Mortgagor to make withdrawals from time to time.

4.9 The Bank may exchange or convert to the Required Currency any currency held or received

 

It then goes on about receivers powers.

Note this is not the page I signed

On the bottom of the page it is overtyped:’This official copy is incomplete without the proceeding notes page.

 

 

Official notes Page then states:

 

These are the notes referred to on the following official copy

Title number xxxxx

The electronic official copy of the document follows this message.

This copy may not be the same size as the original.

Please note that this is the only official copy we will issue. We will not issue a paper official copy.

 

After this separately is my signature on a page titled: In Witness of which this deed has been duly executed

 

Kind regards,

 

SittingDuck

[Lea_HTH]

As suspected it's an all monies charge - you will need to see a solicitor, because this type of repossession isn't the same as the standard ones that are usually dealt with on this forum.

 

It's not an impossible fight, it's just a slightly more difficult one than usual (there is caselaw and statute involved) and the court still has the power to suspend or adjourn a respossession.

 

Use a SOLICITOR not one of the many repossession claim companies that advertise online (or anywhere else), most of them don't know anything but the straightforward stuff.

 

In preparation, do an income and expenditure form, show what you can afford to pay and how long it will take to pay it off (I noted the bank allowed 7 years, which is quite a lot for an all monies charge which is payable on demand).

 

 

 

For others who may read this thread: NEVER have all your borrowings lodged with one bank - virtually every type of credit agreement contains an all monies charge of some description, which means if you default on one credit agreement, if it's non-secure, it can become secure, and every penny owed to the bank can become repayable. Spread your borrowings out.

[Ell-enn]

Affixed is a budget sheet you might find useful - it calculates as you fill it in

[SittingDuck]

Hi, Thank you,

 

'Use a SOLICITOR not one of the many repossession claim companies that advertise online (or anywhere else), most of them don't know anything but the straightforward stuff.'

 

Unfortunately I do not have the luxury of being able to use a Solicitor. I feel that the amount claimed is made up of unfair charges and as the Bank have not complied with my Subject Access Request or given a breakdown of the claim how can we agree a figure.

 

I am going to ask the bank If they will accept £140k over 7 years

The first year being interest only and I pay the rent from the tenanted flat to reduce the £140k.

By the 2nd to 7 year I would have finished building my flat and may then be in a position to remortgage or sell the tenanted flat.

Am I better offering this to the bank or waiting until the Court date and asking the judge to make an order? The reason I ask is that the bank could agree, wait for me to finish the build and then when value is maximised repossess. A court ordering they accept this offer would give me and the tenant security.

 

Any suggestions on how I should broker this deal is much appreciated.

 

Thank you.

[Lea_HTH]

It's a business loan, so you don't have consumer protection.

 

As I said, a solicitor is your best bet. It is your choice whether to take the advice or not. You are not in a position to bargain, nor is the judge in a position (he/she will have no jurisdiction) to reschedule your loan or the repayment period. They may be able to agree repayment in the seven years as that is what you were told previously - so long as you have written proof of this. A very experienced judge may take the view that he will give you longer - but he has no jurisdiction to do so (but it is unlikely a bank will appeal such a decision so long as they receive the monies) - but you cannot guarantee getting such a judge on the day of your hearing, you may get a deputy who is still doing everything strictly by the book.

 

Not finding the money for a solicitor may turn out to be an expensive mistake, but there is nothing stopping you from negotiating with the mortgagee to see if they will agree your proposal.

[SittingDuck]

Lea-HTH Thank you.

 

I would get a Solicitor if I could. I have no money. I can not get money unless I am guaranteed that the property can be finished. So I am here for help.

 

There are many, many people in the same position as me that have been manipulated by the bank on commercial terms and have had massive fees charged to them so they are stressed financially so the banks can eventually take their assets (google Lawrence Tomlinson). So any help here is gratefully received and I'm sure my journey will help others too.

 

'They may be able to agree repayment in the seven years as that is what you were told previously'.

 

Sorry if I'm being thick; when you say 'they' do you mean the Judge, the Bank or the Solicitor.

 

If the Judge agrees 7 years or longer does this still count as a repossession and will it be entered against my credit file as such?

I do have it in writing the 7 years. I however cannot afford £2500 pcm whilst continuing the build.

 

Any recommendations on structuring an offer to the bank or Court on this repossession with an all monies charge is useful.

 

Thank you.

 

Kind regards

 

Sitting Duck

Edited March 20, 2014 by SittingDuck

[Lea_HTH]

Unfortunately sometimes the help is being told to get a solicitor.

 

The all monies charge is a clause in all your borrowing from the same bank - since it was a business loan/overdraft you are not protected by consumer laws.

 

My concern is that despite my statement being in writing, you haven't been able to work out that the statement you query is directly related to the statement before that, which talks about the 'judge'...I could have said he/she, but it is common parlance to use 'they' instead. That, to me, is a simple thing - and I am telling you that challenging an all monies charge is NOT a simple thing - so I think that you should see if you can find the funds for a solicitor, not to do so is a false economy.

 

The alternative, as I said, is to hope you get an experienced judge.

 

Or, again alternatively, do some research on all monies charges and challenges in court - you can start a BAILII.org for case law searches.

[citizenB]

SD, shelter has some information regarding Legal aid for repossession situations on its website. The link below should take you directly to the page

 

https://england.shelter.org.uk/get_advice/finding_legal_advice/advice_and_representation

 

Some Solicitors will still give either free or reduced rate initial hearings I think you should probably be able to find a list in at your nearest CAB office.

[SittingDuck]

Hi

 

Thank you for your input, Lea_HTH thank you for pointing out my ineptitude, I get your point and am aware, this is a symptom of my distress, I apologise.

I am not using a Solicitor. I have resigned myself to repossession and if need be intend living outside the banking hall with a placard.

 

In the meantime, I am going to make one last ditch attempt at seeing if the bank will accept an offer of repayment for a slightly smaller amount than their claim. My offer is based on the fact that the figure is the claim amount less the unfair charges.The offer: (see post 11) I am going to ask for the repayment to be over 7 years. The first year I pay the rent to the bank and the second year start making repayments or sell/remortgage.

 

I have read each repossession costs circa £30k and with this in the mix if they refuse my offer, repossess and sell they will recover less than the amount I offer.

 

 

As I am defending myself I do have some questions:

1) In the particulars of claim they have not given a statement/full breakdown. Can they gain possession on this basis?

2) The unfair charges include overdraft renewal fees for £800 for six weeks renewal. Note they had security on this all monies charge and knew I was financially struggling at this point. After repossession Can I claim back unfair charges or claim under unfair relationship?

3) If they refuse my offer and sell for less than this, can they claim the shortfall from the sale price if less than my offer?

 

Thank you,

 

SittingDuck

Edited March 24, 2014 by SittingDuck

[Lea_HTH]

1. The particulars of claim should include the statements and a full breakdown, including what are actual arrears and what are charges (listed separately and detailing interest accrued separately). 'Unfair charges' is a consumer term, not a business to business one. If you don't have a full breakdown, request one either from the solicitors involved or directly from the bank.
   
2. As I believe I have said, business to business transactions do not have the same protection as business to consumer transactions.
   
3. Of course they can claim the shortfall from you.
   

[SittingDuck]

Lea_HTH

 

Thank you, I am now beginning to understand. I feel I do not have a chance. I am trying to work out what cases an experienced Solicitor would cite.

 

I cannot see what a Solicitor could do apart from rack up my bill.

 

Now it is damage limitation and the offer. Any negotiation tips?

 

Kind regards,

 

SittingDuck

[Lea_HTH]

But you do have a chance - it's just that it's going to be a bit of an uphill struggle to get all your case law in order and explain to the judge why he/she should apply such in your circumstances.

 

Negotiation is for those in a position to negotiate - all you're doing is offering and hoping they will accept. Don't forget to keep a written record of everything - the judge will be interested to know what if anything you've done to try to resolve matters.

[SittingDuck]

Lea_HTH those words were positive, supportive and appreciated. I can see that you are managing my expectations.

Your comment on negotiation I agree with and get that my chances are slim against the imbalance of the financial and legal might of the bank. My thoughts are also that if I come to an agreement with the Bank they can renege. If the Judge gives an order they cannot.

 

I have a very large folder of correspondence in chronological order with transcripts of recordings of telephone calls with the bank. These are not transcripts supplied by them. They've not furnished me with information requested via my Subject Access Request sent recorded delivery on the 17 January 2014.

 

I will now trawl through case law at BAILII.org. Does anyone have any cases that they feel may be relevant to repossession on an all monies charge? If anyone else knows of relevant case law please point me in the right direction.

 

Thank you

[Lea_HTH]

This isn’t straightforward, so I hesitate at providing you with information you may not understand, but I suppose something is better than nothing.

 

The key to an all monies charge is whether there is ‘deferment of principle’ in the agreement. If there is, then the court has the discretion to suspend or adjourn. If the loan was taken out for the purpose of buying a house with payments of principal and interest, the mortgage is covered by s8 of the Administration of Justice Act 1973. A loan that is taken out for a fixed period which is interest only with the sum repayable at the end, is also covered by the same section of the AJA 1973 (Confirmed by Bank of Scotland v Grimes [1985]). If a loan is for a fixed period with repayment of the principle at maturity - (this is usually a business loan with a balloon payment), s8 also applies (Royal Bank of Scotland v Miller [2002]). Therefore, if a business loan is secured on a residential home with payment of interest and principle, then that is also covered by s8 as there is provision for deferment of principal by instalments.

 

The usual s36 AJA 1970 doesn’t apply where principle is payable on default - this is the usual basis for a defence to possession.

 

Grimes and Miller referred to above are cases in which an all monies charge applied and the court found that s8 applied.

 

The court will also look at whether or not the loan can be repaid in a ‘reasonable time’.

[SittingDuck]

Thanks Lea-HTH

 

Very useful. Here is my original agreement:

 

Interest Interest at the rate (S) charged to the Mortgagor by the Bank from time to time

Charged assets The Assets charged by clause 1.2

 

Goodwill The present and future goodwill of any business carried on at the Property by or on behalf of the Mortgagor

 

Mortgagors Obligations All the Mortgagors liabilities to the Bank of any kind and in any currency (whether present or future actual or contingent and whether incurred alone or jointly with another) together with the Bank’s charges and commission Interest and Expenses

 

Expenses All expenses (on a full indemnity basis) incurred by the Bank or any Receiver at any time in connection with the Property the Charged Assets the Goodwill or the Mortgagors’s obligations or in taking or perfecting this deed or in preserving defending or enforcing the security created by this deed or in exercising any power under this deded or otherwise withInterest from the date theyare incurred

Required Currency The currency or currencies in which the Mortgagor’s Obligations are expressed from time to time.

 

Charge

 

1 The Mortgagor covenants to discharge on demand the Mortgagors Obligations and as a continuing security for such discharge and with full title guarantee charges to the Bank:

1.1 By way of legal mortgage of all legal interests and otherwise by way of fixed charge the Property (to the full extent of the Mortgagor’s interests in the Property or its proceeds of sale)

1.2 By way of fixed charge if the Mortgagor is not an individual

1.2.1 All the fixtures and fittings of the Mortgagor from time to time attached to the Property

1.2.2 All the plant and machinery vehicles and computer equipment of the Mortgagor present and future at the Property not regularly disposed of in the ordinary course of business and all associated warranties and maintenance contracts

1.2.3 All furniture furnishings equipment tools and other chattels of the Mortgagor now and in the future at the Property and not regularly disposed of in the ordinary course of business

1.3 By way of fixed charge the Goodwill all rents receivable from any lease granted out of the Property and the proceeds of any insurance from time to time affecting the Property or the Charged Assets.

 

Appropriation

7.1 Subject to clause 7.2 the Bank may appropriate all payments received for the accounts of the Mortgagor in reduction of any part of the Mortgagors Obligations as the bank decides

7.2 The bank may open a new account or accounts upon the bank receiving actual or constructive notice of any charge or interest affecting the Property the Charged Assets or the Goodwill. Whether or not the Bank opens any such account no payment received by the Bank after receiving such notice shall (if followed by any payment out of or debit to the relevant account) be appropriated towards or have the effect of discharging any part of the Mortgagors Obligations outstanding at the time of receiving such notice

 

Business loans were taken out on this Residential home.

 

I am now going to read all case law and get valuations on the property. I feel with the rent coming in from the flat I can show I can afford payments.

 

I do not know if this has relevance; I have documents between the Bank and the Solicitors that acted for me headed:

First Legal Charge over Non Residential Property Non Corporate. The property description is then Flat x, xxx Road

 

Thank you.

[Lea_HTH]

I have given you as much help as I can afford to give - it's too time-consuming, and I made my suggestion more than once as to the appropriate route: a solicitor.

 

If you are insistent on ignoring the advice, then I'd suggest you seek the assistance of CAB, or perhaps even the pro bono unit (to whom you'll need a referral from an appropriate agency).

 

I do, however, believe (based on experience) that the judge will give you an opportunity to repay over a reasonable time - so make sure your proposal is realistic and shows true affordability, not airy fairy stuff.

[SittingDuck]

Lea_HTH

 

Thank you so much for all that you have given. You've given me direction and hope.

 

Kind regards,

 

Sitting Duck

 

If anyone else has any useful advice on how to approach the Court and to fight this, everything is appreciated.

[SittingDuck]

Information for anyone else in my position, I have found this useful:

 

Although some mortgages are regulated by the Consumer Credit Act 1974, most mortgage possession proceedings are governed by the provisions of the Administration of Justice Acts 1970 and 1973.

 

Power to suspend or to delay date for possession

At common law, "the court has no jurisdiction to decline to make a possession order or to adjourn the hearing, whether on terms of keeping up payments or paying arrears, if the mortgagee cannot be persuaded to agree to this course" (Birmingham Citizens Permanent Building Society v Caunt [1962] Ch 883, ChD.) In Caunt Russell J stated that the sole exception to this rule is that possession proceedings

"may be adjourned for a short time to afford the mortgagor a chance of paying off the mortgagee in full or otherwise satisfying him; but this should not be done if there is no reasonable prospect of this occurring. When I say the sole exception, I do not, of course, intend to exclude adjournments which in the ordinary course of procedure may be desirable in circumstances such as temporary inability of a party to attend, and so forth". (p912)

 

However Administration of Justice Act 1970 s36(1) provides:

Where the mortgagee under a mortgage of land which consists of or includes a dwelling‑house brings an action in which he claims possession . . . (not being an action for foreclosure in which a claim for possession . . . is also made) the court may exercise any of [its] powers . . . if it appears to the court that in the event of its exercising the power the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage or to remedy a default consisting of a breach of any other obligation arising under or by virtue of the mortgage.

 

Section 36(2) provides that the court:

(a) may adjourn the proceedings, or

(b) on giving judgment, or making an order, for delivery of possession . . . or at any time before execution of such judgment or order may:

(i) stay or suspend execution of the judgment or order, or

(ii) postpone the date for delivery of possession

for such period or periods as the court thinks reasonable.

 

The court's powers under s36 apply equally to repayment mortgages and endowment mortgages (Bank of Scotland v Grimes [1985] 2 All ER 254, CA).

 

In Royal Bank of Scotland v Miller [2001] EWCA Civ 344, [2002] QB 255, CA it was held that (1) the relevant time for determining whether land consists of or includes a dwelling-house within the meaning of s36 is the time when the mortgagee claims possession, not the date when the legal charge is entered into; and (2) breach of a term of the mortgage (e.g. occupation by a third party without consent) does not prevent s36 from applying.

 

The court's power under s36 to adjourn mortgage possession proceedings, stay or suspend execution or postpone the date for delivery of possession ceases after a warrant has been executed. (Cheltenham and Gloucester Building Society v Obi (1996) 28 HLR 22, CA.)

 

A bankrupt has locus standi to make an application to the court for relief under Administration of Justice Acts 1970 and 1973 (Nationwide BS v Purvis [1998] BPIR 625, CA).

.

 

Criteria and Evidence

The borrower must, on the balance of probabilities satisfy the court that it is likely that the arrears will be cleared within a reasonable period. The court cannot suspend an order for possession under s36, however hard the circumstances, if there is no prospect of the borrower reducing the arrears. (Abbey National Mortgages v Bernard (1995) 71 P&CR 257, CA)

 

The defendant need not always produce evidence in the normal formal sense (e.g. witness statement, affidavit or on oath). In Cheltenham and Gloucester Building Society v Grant (1994) 26 HLR 703, CA where the building society unsuccessfully challenged the common practice of district judges exercising their discretion under AJA 1970 without hearing sworn evidence from borrowers, Nourse LJ stated that:

"it must be possible for [judges] to act without evidence, especially where, as here, the mortgagor was present in court and available to be questioned and no objection to the reception of informal material is made by the mortgagee. Clearly, it will sometimes be prudent for the mortgagor to put in an affidavit before the hearing." (p707)

The Court of Appeal declined to lay down rigid rules as to how "busy district judges" should satisfy themselves as to the requirements in s36 and upheld the original order made by the district judge that a possession order should not be enforced without leave of the court while regular payments were made.

 

Reasonable period

One crucial question which has to be answered in every case is "What is a reasonable period?" The phrase is not defined by the Administration of Justice Act.

 

In Centrax Trustees v Ross [1979] 2 All ER 952, ChD, Goulding J stated that in assessing how long a reasonable period might be, the court must "bear in mind the rights and obligations of both parties, including [the lender's] right to recover their money by selling the property, if necessary, and the full past history of the security."

 

In First Middlesbrough Trading and Mortgage Co Ltd v Cunningham (1974) 28 P&CR 69, CA, Scarman LJ, when considering what is a "reasonable period" within s36, stated:

"since the object of the installment mortgage was, with the consent of the mortgagee, to give the mortgagor the period of the mortgage to repay the capital sum and interest, one begins with a powerful presumption of fact in favour of the period of the mortgage being the 'reasonable period'". (p75)

 

In Western Bank v Schindler [1977] Ch 1; [1976] 2 All ER 393, CA Buckley LJ stated:

"What must be reasonable must depend on the circumstances of the case. . . . In a suitable case the specified period might even be the whole remaining prospective life of the mortgage". ([1976] 2 All ER at p400)

 

These passages were obiter but were followed by the Court of Appeal in Cheltenham and Gloucester Building Society v Norgan [1996] 1 All ER 449, CA. Waite LJ stated that in determining "a reasonable period"

"the court should take as its starting point the full term of the mortgage and pose at the outset the question: would it be possible for the mortgagor to maintain payment-off of the arrears by installments over that period?" (p458)

 

In Norgan there had been a history of arrears. In May 1990, when arrears stood at £7,216, the building society obtained a possession order suspended for 28 days. In December 1990 the terms of the suspension were varied, but not complied with, and the building society obtained a warrant. The warrant was twice suspended on terms, but when the borrower failed to comply, the building society applied to reissue the warrant and the borrower cross–applied for a further suspension. The district judge gave leave to reissue the warrant and refused any further suspension. By the time the appeal came on before the circuit judge the arrears were in the region of £20,000. He dismissed the borrower's appeal and she appealed to the Court of Appeal. The Court of Appeal allowed her appeal.

 

Evans LJ set out a number of considerations which are likely to be relevant when establishing what is a reasonable period. They include:

"(a) How much can the borrower reasonably afford to pay, both now and in the future? (b) If the borrower has a temporary difficulty in meeting his obligations, how long is the difficulty likely to last? © What was the reason for the arrears which have accumulated? (d) How much remains of the original term? (e) What are the relevant contractual terms, and what type of mortgage is it, ie when is the principal due to be repaid?"

Other matters which may be relevant include family circumstances and the income of other members of the family. If arrears have accrued as a result of matrimonial breakdown, are any proceedings for ancillary relief likely to result in an order which will enable arrears to be paid off? Is the Benefits Agency (or should it be) paying anything towards the interest due on the mortgage?

 

Security at risk

Norgan was a case where the lender's security was not at risk. Courts are likely to be far more cautious about exercising s36 powers where there is already negative equity or where there is a risk of negative equity. In Norgan Waite LJ recognised that there would be cases where evidence might "be required to see if and when the lender's security will become liable to be put at risk as a result of imposing postponement of payments in arrear". (p459) Evans LJ indicated that courts should ask "Are there any reasons affecting the security which should influence the period for payment?" (p463) Similarly in First Middlesbrough Trading and Mortgage Co Ltd v Cunningham the Court of Appeal stated that when exercising its AJA discretion, one of the "relevant surrounding circumstances" which the court is entitled to take into account is the fact that the debt might be inadequately secured. Sometimes borrowers produce letters from estate agents in order to satisfy the court about the value of the property in comparison with the amount of the loan outstanding, but in Bristol and West BS v Ellis (1997) 29 HLR 282, CA the Court of Appeal stated that judges should approach such estimates with "reserve". If a borrower's valuation is disputed, it may be necessary for there to be an adjournment for an independent valuation so that the court can determine whether the lender's security is at risk.

 

Sale of the property

In most cases borrowers try to satisfy the court that it is likely that the arrears will cleared within a reasonable period by giving evidence about their income and expenditure. However, where borrowers' income is not sufficient to repay arrears, they may seek time in which to sell the property so that the outstanding balance (including arrears) can be paid from the proceeds of sale.

 

In National and Provincial Building Society v Lloyd [1996] 1 All ER 630, CA, the Court of Appeal considered an appeal against a decision to suspend a possession order to give the borrower time to sell premises and so clear mortgage arrears. The building society argued that any such suspension should only be for a short period. Neill LJ rejected this submission. If there is clear evidence that completion of the sale of a property "could take place in six or nine months or even a year", there was no reason why the court could not come to the conclusion that it was likely that the arrears would be repaid within a reasonable period. What is "a reasonable period" is a question for the court in each individual case. However, in Lloyd there was insufficient evidence before the judge to show that the arrears would be paid within a reasonable period. Much of it was "a mere expression of hope" and accordingly the building society's appeal against the suspension was allowed.

 

In Bristol and West BS v Ellis (1997) 29 HLR 282, CA, the Court of Appeal confirmed that what is a reasonable period for sale depends on the individual circumstances of each case, particularly the extent to which the mortgage and arrears are secured by the value of the property. In Ellis the Court of Appeal allowed a lender's appeal against an order which would have allowed the borrower three to five years (when her children would have finished university education) to sell because there was insufficient evidence that Mrs Ellis could or would sell the property within that period or that the proceeds of sale would be sufficient to discharge the mortgage debt and arrears. The Court stated that the comments by Neill LJ in National and Provincial BS v Lloyd [1996] 1 All ER 630 that sale "could take place in six or nine months or even a year" did not establish a year as the maximum period "as a rule of law or as a matter of general guidance". (See too Cheltenham and Gloucester BS v Johnson (1996) 28 HLR 885, CA where Lloyd was followed.)

 

In most cases where the security is not at risk, the court will adjourn or make a suspended order to allow the borrowers to arrange a sale. It is generally accepted that borrowers occupying premises achieve a better price on sale than lenders through "forced sales". For example in Target Home Loans v Clothier [1994] 1 All ER 439, CA borrowers paid no mortgage installments for over 15 months and when possession proceedings came to court there were arrears of £46,000. The lenders sought an immediate possession order, but the district judge adjourned for 56 days under s36. When the Court of Appeal heard the appeal, there was a letter from estate agents indicating that an offer of £450,000 for the house had been received. Nolan LJ, after asking whether there was a prospect of an early sale, stated:

If so, is it better in the interests of all concerned for that to be effected by [the borrower] and his wife or by the mortgage company? If the view is that the prospects of an early sale for the mortgagees as well as for [the borrower] are best served by deferring an order for possession, then it seems to me that that is a solid reason for making such an order . . . ([1994] 1 All ER at p447)

The Court of Appeal made a possession order to take effect in three months.

 

Even if the power to suspend execution under Administration of Justice Act 1970 s36 cannot be exercised because it is unlikely that the borrower can repay arrears within a reasonable period, the county court still has a residual inherent jurisdiction to defer the giving up of possession in order to enable the lender to sell the property (Cheltenham and Gloucester plc v Booker (1997) 29 HLR 634, CA.) In such circumstances the court may give conduct of the sale of premises to the lender while postponing execution of a warrant for possession until completion of the sale, thus allowing the borrower to remain in occupation. There is no reason in principle for the court to accede to a lender's insistence upon immediate possession if

(a) possession will only be required on completion;

(b) the presence of the borrowers pending completion will enhance, or at least not depress, the sale price;

© the borrowers will cooperate in the sale; and

(d) they will give possession to the purchasers on completion.

However in Booker Millett LJ stated these conditions are seldom likely to be satisfied and the circumstances in which such a course would be appropriate are hard to imagine. Such an order would "certainly be a rarity".

 

If a lender does not agree to a borrower selling premises, the borrower may apply for an order for sale under Law of Property Act 1925 s91(2). Such an application may be made in a county court if "the amount owing in respect of the mortgage or charge at the commencement of the proceedings does not exceed £30,000" (The High Court and County Courts Jurisdiction Order 1991, para 2(4)). If the amount owing is more than £30,000 a section 91 application has to be made in the High Court. In Cheltenham and Gloucester BS v Krausz [1997] 1 All ER 21, CA, the Court of Appeal held that a district judge in the county court has no jurisdiction to suspend a warrant in these circumstances. Phillips LJ did not consider "that the County Court, as part of its inherent jurisdiction, can properly suspend an order or warrant for possession in order to enable a mortgagor to apply to the High Court for an order under section 91. It [is] incumbent on the mortgagor to seek from the High Court any relief which the court is empowered to give before the warrant takes effect." He noted that s36 makes it clear that parliament did not intend that the court should have power to curtail mortgagees' rights to possession unless the proceeds of sale were likely to discharge the mortgage debt.

 

Mortgage Pre-Action Protocol

A new pre-action protocol for possession claims based on residential mortgage arrears came into force on 19 November 2008. See White Book 2009, C*-**** and the annotations thereto. The Protocol does not alter the parties’ contractual or statutory rights and obligations, but does describe the behaviour the court will normally expect of the parties prior to the start of possession claims. It aims to ensure that lenders and borrowers act fairly and reasonably with each other in resolving any matter concerning mortgages and encourages more pre-action contact between lenders and borrowers in an effort to seek agreement, and where this cannot be reached, to enable efficient use of the court’s time and resources. For example, it provides that

lenders should consider reasonable requests from borrowers to change the date of regular payment or the method of payment;

lenders should respond promptly to any proposal for payment made by borrowers. If lenders do not agree to such a proposal they should give reasons in writing;

if lenders submit proposals for payment, borrowers should be given a reasonable period of time in which to consider such proposals; and

if borrowers can demonstrate that reasonable steps have been or will be taken to market the property at an appropriate price in accordance with reasonable professional advice, lenders should consider postponing starting possession claims.

The Protocol does not contain any specific sanctions, but concludes “Parties should be able, if requested by the court, to explain the actions that they have taken to comply with this protocol.” However, if non-compliance has led to the commencement of proceedings which might otherwise not have needed to be commenced, or has led to costs being incurred in the proceedings that might otherwise not have been incurred, the court has the power to make the orders in relation to costs and interest set out in para 2.3 of the Practice Direction on Protocols (see White Book, C1-002), although when doing so, the court should bear in mind the contractual rights and obligations of the parties under the mortgage deed.

 

Sittingduck