Repossession 2019 (for friend) ***Resolved*** then but now back in even worse situation

[honeybee13]

Hi HP Mum.

 

Sorry if I've missed something. How can the defendant be entitled to UK benefits if they live abroad?

 

HB

[HP Mum]

hi honeybee - i agree - that statement was just added in terms of the claimant writing in their claim form they have no knowledge of the defendants financial circumstances

[honeybee13]

Maybe you could type up the particulars of claim minus personal details please, HP Mum? This will help people to advise.

 

HB

[Will Goodfellow]

There are two separate issues here, the CCJ and the application for a possession order. Even without a CCJ, the freeholder can seek possession as the lease has been breached. Setting aside the CCJ will not stop the action to seek possession. The CCJ and the possession order are different judgements.

 

He will not be entitled to housing benefit as he does not live in the property, and even if he was entitled, the claim will not be backdated for more than 3 months. 1 month if he is not receiving pension credit.

[HP Mum]

just a thought:

is there a remote chance that the mortgage company will send a lawyer to the hearing on Weds?

If friend contacts them, comes clean as you dx advise, asks for the 15k to be added to his mortgage and asks if their lawyer can turn up to tell judge that they will be adding it to the mortgage.

Am I dreaming that a bank may ever act like this?

[sgtbush]

I very much doubt they bank will send a lawyer.

[HP Mum]

i guess that was wishful thinking!

 

Looking forward - does friend have time to fill in a N244 and file it before the Weds hearing?

 

And should he try to find a lawyer asap to rep him this week

Edited December 2, 2018 by dx100uk
merge

[Will Goodfellow]

Looking forward - does friend have time to fill in a N244 and file it before the Weds hearing?

 

What is it that you are trying to do?

 

There is no point submitting an N244 regarding the hearing on Wednesday as there is no judgement yet, it is a possession hearing. If he wants to try and set-aside the CCJ, you can submit an N244 but it's not clear what grounds he has to set-aside. It won't make any difference to whether or not the possession order is granted even if the CCJ is set-aside.

 

And should he try to find a lawyer asap to rep him this week

 

Either that or he needs to seek specialist housing advice.

[HP Mum]

Thank you all for your assistance yesterday. All very helpful.

And today was interesting.

 

Frustrating because no lawyer would agree to represent friend (as expected) without large sums on account.

But I did a direct approach to the freeholder's lawyer - for free - pointing out their error - that there is a mortgage and they had failed to disclose this in their Claim and to the bank. They were suitably embarrassed. They agreed to adjourn the repo hearing. A very welcome result.

 

However, the lawyers said they were going to confirm the adjournment in writing. They haven't yet. Have thus written asking them to confirm they have agreed to xyz.

What is the best next step?

Should I (friend) write to the court outlining the details of the conversation?

Can the Claim be thrown out/ set aside (whatever the term be) on the basis of their failure to do due diligence and notify the bank 1st charge?

Is there a specific form to fill in to get it thrown out/ set aside? Is that the N244?

I want to ensure everything is correctly done and in best interest of friend.

 

Whatever are the next best steps - this is a good result for today.

 

The freeholder wanted to know the name of the bank! Not about to make their life easy - so just said that there is a mortgage. They will have to ascertain and contact - all of which will take time. Which ultimately helps friend resolve raising the required funds in due course... Next job to help him with...

[dx100uk]

so the repo is sorted for the minute then?

 

as WF pointed out the CCJ and the REPO are 2 sep things.

 

now time to work on looking if the CCJ can be challenged.

 

ill review things later bit busy.

[HP Mum]

The freeholder lawyers wrote to the mortgage bank immediately - advised them of the situation/ asked them if they wish to pay off the charges and add them to the mortgage.

 

The lawyers wrote that they would ask the court for an adjournment on the basis that they had not notified the 1st charge bank.

However - The lawyers attended court, despite saying they were going to ask for an adjournment.

 

Friend had no representation so the judge who presided over the original hearing, stated that 'defendant did not attend'.

The claim lawyers did not advise the judge that he lives overseas currently and has no legal rep

 

Received an on order from that judge which states:

The lawyers have asked for another hearing at the earliest possible date, after next Wednesday.

 

I suspect, but wont depend on this, that the courts will be too busy before xmas for there to be a slot for another hearing so quickly??

 

In the meantime, I have urged friend to borrow.

A broker is in the frame and hopefully a loan in principle will be in writing by mid next week.

 

What else can I do to help?

[HP Mum]

Update to this:

The bank stepped in to protect their interest and paid the service charges owed & 6m in advance

- added to friend's mortgage.

Amazing result for friend.

Although clearly need to ensure there's provision for future charges so friend doesn't end up in same situation again...

Thanks for assistance 

 

 

 

[HP Mum]

This situation has reared its head again

Friend had such luck (through my efforts) at the start of the year to get the bank to clear the service charge debts and add them to the mortgage. Friend ended up having a slightly larger mortgage but at really low interest rate. And the freeholder got their service charge money.

 

But friend has had head in sand all year.  And has now failed to pay the bank one payment all year!! 

It is so infuriating.    With costs, friend now owes apx £1500.

 

So the bank re-opened the original claim of the freeholders - which they paid off - and have now got a Judgment against friend.  With a repossession hearing in a few weeks....

The value is apx £1.5m.   The mortgage is like £100k.   (About £100/m).   Now Judgment for owing £1500 on a £1.5m property.

 

I have been telling friend all year to make payments.  Now friend really needs to make a payment.   Still absent overseas.

 

Additionally - another set of service charges are due now

 

I won't let these people take the property - but I don't know how to help.

 

I told friend to pay the mortgage and ask the bank to pay the service charges again.  And in the meantime find a better solution - such as selling an asset.  But nothing has been done at all in the last 9 months.

 

Any good suggestions?

 

 

 

[unclebulgaria67]

Tell the friend that the Bank may be able to sell the house, after repossession is granted and could sell it for a much reduced price. Your friend could stand to lose hundreds of thousands of pounds.

 

Why does your friend not borrow the money or sell goods to raise the money ? Are there goods in the house, such as furniture, that could be sold to raise money ?

[HP Mum]

Thank you.  I am pulling my hair out over this...  I don't know how friend survives - but doesn't work, is retired.  Because of age, being overseas and no uk income, friend has found it almost impossible to borrow (other than the usual sharks circling, wanting to charge 25%...)  There are some things that could be sold, but a) the property is pretty empty and not much of value and b) despite handling mail and such matters as this, I can't be selling things quick w/o approval.

 

The interesting situation though - is that the freeholder is now re-threatening legal action for non-payment of service charges.  But this time they can't action the forfeiture clause and go for repo claim - because the bank has already got an Order and are waiting for the next available repossession hearing.  So the bank with the smaller debt has jumped ahead of the freeholder with the much larger debt....  The freeholder doesn't know yet....

 

I am trying to speak to friend.

I know friend doesn't have enough £s to pay the annual service charge fees.  But has emailed me suggesting the £s for the bank can soon be transferred...    It seems friend needs to communicate with bank - asap.  In an ideal world bank will cover the s/c for next year.  Because otherwise the minute the bank arrears are cleared, the path is then cleared for the freeholder to make a legal challenge - which would again jeopardise the bank's security/ position...

I sincerely hope that bank sees that. And agrees to add freeholder's s/c to the mortgage.  Of course, equity is being eroded by increasing the mortgage - but the mortgage would still be under 10% ltv.  

fingers crossed...

Edited September 17, 2019 by HP Mum

[tony3x]

Is your friend still a UK resident. If so he may be able to get a Lifetime Mortgage to replace the current mortgage and raise enough for the outstanding fees, and also receive an income that could pay the annual service charges. Would have to come back into the UK though.

[HP Mum]

Well - friend still has empty property  in the uk - but has not been here for years...  Won't rent them out.  Has a very low interest mortgage.  And when bank added s/c on to mortgage start of year, this was the cheapest and best solution for friend.  Mortgage does expire in a few years though... 

 

I have suggested buying share of fh and removing the onerous annual s/c   But an asset would have to be sold - and in this poor sales market friend refuses....

 

 

 

[tony3x]

Something else that may be an issue here. If friend has a mortgage they will have to have buildings insurance and I am sure that one of the questions relates to the property being empty for extended periods. Has this been addressed, if not and there is a claim there will be a good chance of it being refused.

 

Not sure what you mean with regards a poor sales market, if its regarding property its not that bad and will not grow by any large amounts anytime soon.

[HP Mum]

as far as i am aware the freeholder pays the building insurance.

the s/c fees contribute to the building maintenance

contents insurance is separate

 

the property market is on an incredible low.  so friend would not sell now.

[tony3x]

Not sure where the flat is but the property market is not that low. Prices have plateaued in the SE with some decreases for high value properties in London, the rest of the country is generally seeing some small increases.

 

Seems your friend is between a rock and a hard place. He has a flat he cannot afford to maintain costs on but will not sell as he thinks that prices will rise albeit not knowing when.

[HP Mum]

Thanks.

This posting isn't about selling friend's property.   It was bought decades ago; there's a tiny mortgage on it and more than 90% equity.   Friend has been silly by not paying the mortgage.  But hope that can now get resolved - as it is such a tiny amount.  Needs to sort this directly with the bank.

  

The main affordability issue is the high service charges that have to be paid on leasehold flats.

 

In friend's particular case - there's no concierge, no lift, no garden; each tenant is responsible for their windows and interiors, a cleaner cleans the small communal hall and stairs over 6 floors.  And for that the freeholder charges each leaseholder over £12kpa.  So >£72kpa.   

 

I don't know any house owners who spend that amount annually on maintenance.... 

When pensioners have paid off their mortgage and should be enjoying their old age, they run the risk of losing their flats due to non-payment of such ridiculously high service charges... 

 

[tony3x]

It seems to me he is relying on the fact that there is a lot of equity that the lender will not try to repossess, quite a risky thing to do. The service charges would have been in the original lease so must have been agreed at the time it was bought. Not justifying the amount as that seems very high.

 

You mention it was bought decades ago - depending on the length of the remaining lease this could possibly be another issue as the shorter a lease gets the more expensive it is to renew. May be worth checking and hopefully it was on a very long lease originally.

 

Regardless of the rights or wrongs it looks like the problem with the ongoing service charge will always be there and will rear its ugly head every year. As I said a lifetime mortgage that provides a lump sum to clear the outstanding debts and an income to pay the service charge seems like a sensible way out unless your friend has other ways of finding the funds.

 

A lot will also depend on whether your friend intends to come back to the UK, if not I think selling would be a sensible thing to consider as the funds released could be used to generate an income which could be more useful than a property sitting there not producing any sort of return, or actually a loss to be honest. Other option would be to consider letting the property to generate an income to cover the fees and mortgage and probably a bit extra. 

 

I realise that the selling or letting is not ideal but the situation could end up getting out of hand if it carries on. If a lender does repossess it would not be unrealistic for it to be sold at less than 75% of the true value which is not good in any way.

[aesmith]

Just another point of view here, especially as your friend doesn't seem to be prepared to do a lot for himself.  If the bank repossesses and sell, your friend is going to end up with something like 3/4 million in cash, in addition to all his other properties.  That's quite a lot of wealth by many peoples' standards, although I understand that your friend may have higher expectations.

[HP Mum]

An update on this issue:

Friend - eventually - paid off the mortgage arrears in full. 

But their solicitors have since written saying they will write to the courts asking for the liberty to keep the claim open.

 

Is there something friend can do to prevent that?

 

It seems weird that a Claim can be settled in full, yet the solicitors want the Claim # left "open" on file so they can open it again whenever they want ("just in case" friend may miss payments again). 

It would seem a bias against friend.

What to do?

 

[dx100uk]

no ,..I bet it says at liberty to restore.

which is quite correct

you cant just get an SPO removed because its been paid

 

poss after 6mts he might be able to get it quashed

but I believe this will cost £255 via an N244 I think

with no guarantee