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

[HP Mum]

Helping a friend:

 

A friend has a repossession hearing coming up this week and I will attend in his absence to try prevent it.

It will only be a 5 mins hearing so I just want to ask a bit of advice here

- on best presentation/argument to not repossess and allow him the time to come up with the funds.

 

He owns a lovely long lease flat in a converted listed building, with a small 100k mortgage.

He is a pensioner living off his pension but currently overseas where he also has property, taking care of family affairs.

 

He had rental commercial income overseas which was supplementing his pension.

But the rental income stopped and he hasn't found a new tenant. The upshot of this is that he has not had the funds to pay the service charges that accrue quarterly.

 

The managing agents on behalf of the freeholder have got judgment against him for unpaid service charges.

And now an imminent repossession hearing.

 

The judgment was for apx £9k but he offset £2k.

However, since serving notice and getting judgment the next set of bills became due and remain unpaid

- apx 6k

- so the lawyers have packaged those charges into the repossession hearing too

- even though they are outside the original judgment amount.

The outstanding balance is 15k against a flat value of apx £1.5m

 

There is a forfeiture clause in the terms of the lease

- if you don't pay service charges the freeholder can reclaim the lease and your property.

Even if you own it outright or barely have a mortgage.

 

It is a shocking state of affairs.

I have heard of many people

- especially oaps

- who are now being evicted from their lifelong homes because they can not pay the service charges.

Charges over which they have no control.

 

I have looked into friend's affairs/ assets here in the uk.

He has another empty property which could be sold with the proceeds being put aside to cover all service charges for years to come.

I have asked a local agent to value it in writing before the court hearing.

 

Friend also has some valuable art.

There is an important auction coming up in 3 months time which could be the vehicle used to sell the art.

Proceeds should amply cover the service charges for years too.

I intend to get the art valued properly in the next days.

 

So I guess my question is

- if I show the judge the art and other house valuations and get a letter from the friend to state he will sell them to amply provide funds to service the service charges for years to come

- would the judge accept this as an acceptable plan??

Or is he likely to side with the freeholder?

 

Grateful, on behalf of friend, for helpful hints on how i can help him.

 

Like do I need written proof from him that I am appointed to represent him in person in court?

etc etc

Edited December 1, 2018 by dx100uk
spacing

[dx100uk]

yes you will need written authority to rep him, best to get it done anyway then no-one can argue.

 

your plans appear sound to me.

 

you can show they will be paid.

[tony3x]

Look at other options of raising funds. If he sells the additional property there is the possibility of CGT, same with the art.

 

It may be worth considering a lifetime mortgage on the additional property as the amount required is so small in the grand scheme.

[HP Mum]

I have tried to help him raise funds.

His age is an issue. So too is his current absence overseas.

And then there is the 'how is he going to repay the extra borrowing' that arises. I have also found those who wonga talk 'oh yes, i can lend x as long as he pays back double or triple...' Funny how the worst side of people comes out when they sniff desperation in someone... Even his lawyer became opportunistic... sensing a huge opportunity to make £s.... and yes, he will be dumped...

 

I have tried for a long time to assist. There has been a huge element of ostrich head in the sand. Now it is 11th hour and he realises - finally - the severity of the situation. With a few days to go, I am limited with what really is possible to try and get the judge to give more time...

[sgtbush]

A friend cannot represent someone in court.

They can represent themselves, known as a litigant in person.

The litigant in person can have someone there advising them and take notes but they CANNOT address the courts directly. This is a McKenzie friend.

The courts can decide wether the litigant can have one or not.

 

The only exception is were someone has a lasting power of attorney for financial if the person is incapable. Your friend is not incapable.

 

Your friend is not in small claims court so a lay representative is not appropriate (you have to be present anyways for them to speak on your behalf)

[HP Mum]

Oh

So what do I - my friend - have to do before the court hearing?

The friend is overseas.

There is no lawyer instructed (no £s available to fund)

Is there not a way that I can turn up - to provide the paperwork to show intent to pay - in the 5 minutes hearing ??

[sgtbush]

The courts will not recognise you.

Your not the defendant.

Your not a solicitor

Your not a QC

Your friend needs to write to the court explaining they are overseas and ask for a later date or get home soon and represent themselves

[HP Mum]

oh

he can't return to the uk - certainly not in time for the court hearing.

 

So - next best steps??

 

I can produce the info that will show the other property value and the art value in time for the court hearing. Should I tell friend he must appoint the cheapest lawyer possible to attend the 5 mins hearing - with the evidence presentation I have put together for him? I guess I can try find a local lawyer tomorrow who could attend? He is very broke so it has to be a cheap lawyer.

 

Or can he give me legal power of attorney in 1-2 days? I suspect that may be optimistic to achieve in such a short time and thus impossible solution...

[sgtbush]

He can write to the court.

Lasting power of attorney will not help you. That only kicks in in law when someone becomes incapable medically. Your friend is not incapable in that sense

 

Couple of questions.

Why cant he return to the UK?

If there is valuable art you could sell it tomorrow to a dealer to raise cash

Why cannot a bridging loan be taken out if the art cannot be sold asap?

There is a huge LTV in the property

[dx100uk]

just one point.....

 

did they knew and had been informed in writing before that he is resident outside the UK

if so.. I do believe they shouldn't of been allowed to get a CCJ?? thus the now repo order? set-aside time?

[sgtbush]

Dx, the person does not reside outside the uk. They are just abroad at the moment

[HP Mum]

Actually - I wrote currently outside the UK loosely He has been away 10 years. And yes the managing agents and the freeholder know that.

I also think, but hope it is not the case, that he has beginnings of dementia

[dx100uk]

aw yea sorry it does explain why...sad state of affairs.

 

could the court not simply be asked to postpone the hearing ?

if its serious family matters i'm sure they would?

 

why doesn't he ring the court directly and tell them/ask?

[dx100uk]

ah again...hes been away 10yrs!!

surely that counts and they must have known he was,

and the whole thing could be set aside back to day one?

 

why did he not contest the CCJ at all?

head in sand?

[sgtbush]

HP MUM, there is so much you haven't told us to make an informed assessment and therefore give the best advice.

 

Does the bank know that he has been outside the UK for ten years but still has a mortgage on a 1.5 million property? Who lives in this property?

Who lives in the property abroad?

Is it a state pension?

I take it That the country he is residing in has a pension agreement, like Spain, to pay the pension at the rate of ten years ago (as it does not increase and you say he has been out the country for ten years)

[HP Mum]

Dx - that sounds a hopeful course of action.

The managing agents and their lawyers absolutely know he has been away all this time.

What happens is there is a high turnover of staff in the head office of the agents so info like this does not get passed on to the next person responsible for the area and my friend's flat.

 

There have been all sorts of issues with the block

- mismanagement, flooding, damage caused to friend's flat etc etc

- but that is a separate issue/ future counterclaim against the managing agents/ freeholder.

During some of the incidents, the managing agents liaised with me on behalf of the owner, so even 5 years ago they knew he was an absent owner.

 

He originally travelled for a few weeks but then got embroiled in huge family issues (apparently) and got sick © and subsequently has had no money to travel.

 

I am not privy to his financial situation

- I just accept what he tells me

- which is that he has been too busy, too sick and too broke to return to the UK.

 

If there is a chance to get the ccj set aside because the Claimant knows he is residing overseas - then that is brilliant potential help

Edited December 2, 2018 by dx100uk
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[sgtbush]

Not possible.

Too many ties to the UK.

You said they had a commercial income overseas and that was supplementing his pension.

What pension is this? A uk state pension?

 

This Is what I'm getting from all of this....

 

Your friend is claiming uk state pension supplimented by income from another property abroad.

He has a mortgage on the UK property and for the banks, dwp and hmrc purposes states he lives in the UK.

BUT

In reality he lives in the property abroad and rents out the uk property but has no tenant anymore therefore cannot pay the service charges.

If that is true, and i strongly believe it is, then he cannot have it both ways.

[HP Mum]

The property is empty.

It has always been a property that he lived in half a year; the other half overseas.

Just the last 10y he has not returned at all.

 

I have been taking care/ collecting mail all this time (as a friend).

He was supposed to return within a few weeks - he just never did.

 

I have no idea on where his pension comes from.

He is the other side of the world; not close to uk.

 

I have been the only person helping him

- but I struggle to get info out of him.

 

I have been suggesting for years that he sells the other unencumbered property.

Finally he seems to be listening.

 

The property (ies) abroad, I think, are long term properties owned by his family for many generations.

 

He did write to the court and ask for an adjounrnment/ to be aside

- I don't know the contents of the letter

- but he wrote to me to say they had advised he needed to fill in a n244 form.

I told him to do that then.

But he then said he can't send money from abroad without it costing him £100 in bank transfer fees

- so he didn't fill it in.

 

He didn't seem to grasp that for an extra £100 in bank transfer fees he could get the case set aside/ adjourned....

It is quiet a desperate situation and not much time left.

 

So with 2 business days - I - on his behalf - am now really struggling to act fast to prevent repossession.

If I can't represent him - then I need to find the best solution in next 2 days.

(I am busy with my own life, but will try as hard as I can to help him)

 

The commercial premises are overseas.

They were rented to a corporation.

But the corporation moved out and those premises have stayed empty ever since.

 

He has no rental income in the UK. Both properties are empty.

The uk mortgage he got nearly 30y ago - ends in a couple years, i think

 

I am not privy to his tax status/ where he is registered/ from which country he gets a pension.

I just know he doesn't earn any money in the uk and hasn't done for almost 2 decades...

 

So:

If I can persuade friend to fill in a N244 and pay the £255 (+ the international bank transfer fee) today to set aside due to being overseas / adjourned whilst he raises the money from the sale of other house/ art - will that be filed in time for the repo hearing on Wednesday?

Or do I need to find him a local lawyer to quickly do all this for him?

 

DX - can he call the court and ask them to adjourn without paying any fees??

Edited December 2, 2018 by dx100uk
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[Will Goodfellow]

If there is a chance to get the ccj set aside because the Claimant knows he is residing overseas - then that is brilliant potential help

 

Is the freeholder seeking possession as enforcement action after a CCJ or for breaking the terms of the lease? You need to know on what grounds the freeholder is seeking possession.

[HP Mum]

for breaking the terms of the lease - ie not paying the service charges. Actioning the forfeiture clause in the lease.

 

the freeholder obtained a ccj for non-payment of the service charges. Because the judgment wasnt paid now they have gone for a repossession hearing

[sgtbush]

Hpmum, I think you haven't been told everything and your really trying to help someone who doesn't want help and your opening a can of worms.

But dint worry, even with a ccj , he wont lose a 1.5 mill property over a 15k ccj.

 

In most cases if there is a mortgage on the property it is likely that the mortgage provider will be given a further opportunity by your solicitor to protect the mortgagee’s interest and pay on behalf of the leaseholder the full amount owing including the solicitor’s costs, interest, administration charges and, of course, all the arrears of service charges and ground rent.

 

If payment still remains outstanding following the court’s determination a number of the following enforcement measures are available:-

 

* “Warrant of Execution” by the courts bailiff to seize goods to the value of the debt; * Attachment of Earnings Order – where monies are deducted regularly from the debtors salary; * Charging Order – where the debt is secured against land or shres in which the debtor has an interest; * Third Party Debt Order, requesting the monies to be paid by a third party who owes money to the debtor (often banks or building societies)

[dx100uk]

yes im surprised the mortgage firm has not stepped in

p'haps they don't know of the proceedings.

 

typically we see them pay it off here before in threads about service charges and add it to the mortgage and that's the end of it here.

 

later he could try and unravel things by N244 etc, but that could be a can of worms you don't want to be involved with I suspect.

 

unless WF advises otherwise i'd be contacting the mortgage supplier and get it sorted, £15k is not going to harm him in the long run and will be amply paid by him selling assets later as you say?

 

dx

[HP Mum]

dx you are correct.

I saw in their claim papers that the freeholder lawyers stated there was no known mortgage.

There is.

 

One issue though - and I could throttle the friend - is that he is in arrears with the mortgage. Only £900. But given his low monthly payments this is many months in arrears. He has also been just sent on Friday a sols letter advising he needs to pay the arrears within 7 days.

I suspect that the bank wont be happy that he is in arrears and has a ccj for non-payment of the service charges.

 

However, if the bank can be called and advised of the situation - then maybe this is a possible route for friend????

[dx100uk]

no known mortgage...because they didn't look!!

done on purpose to get the CCJ and go for repo by the backdoor

 

the mortgage company wont allow that to happen and lose their massive asset.

get onto them, come clean, get an arrangement of low payments going until the assets mature or are sold.

 

simplest way in my eyes.

see what the true experts say.

[HP Mum]

I just checked the Claim

Specifically the claim states under the forfeiture clause - that 'there are no mortgages entitled to claim relief from forfeiture'.

There is a mortgage.

 

The claim also states they have no knowledge of the defendant's financial circumstances. They have not been informed that the defendant is entitled to or has applied for housing benefit.