Putting a charge on a guarantors property?
Discussion
Recently Ive had yet another non paying tenant which has resulted in me asking a guarantor to meet his obligations.The tenant owed roughly £1000 and the guarantor is currently out of work and on benefits however he does own his home outright jointly with his mother.He has offered £10 per month to pay off the £1000 which I have rejected so Im taking him to court.Ultimately I think the only chance Ive got of eventually seeing my money is to put a charge on his property.Can I do this at the same time as he is paying the £10 per month and what is the likely cost of putting a charge on and can I add the cost of doing so to the debt??
The interim charging order and final charge is going to cost around £350 - £450 depending on how long the Solicitor or junior Barrister is sitting on his or her arse waiting for the hearing.
However if the property is jointly owned and the other party is not subject to the judgement you are unlikely to get a charge placed.
However if the property is jointly owned and the other party is not subject to the judgement you are unlikely to get a charge placed.
MarsellusWallace said:
When the tenant moved in 2 years ago the guarantors circumstances were different-he at least had a job.
Looks like £10 per month is as good as it's going to get with this one...the joys of being a landlord!
Can you stick him with a statutory demand with the attendant possibility of bankruptcy? Or is he unlikely to be bothered about this eventuality?Looks like £10 per month is as good as it's going to get with this one...the joys of being a landlord!
MarsellusWallace said:
When the tenant moved in 2 years ago the guarantors circumstances were different-he at least had a job.
Then whoever is constructing your tenancy agreements needs taking outside and shooting (and if you are doing it yourself, hari kari time)! Why landlords, with all that they can lose, don't adequately cover their arses is beyond me (and, before anyone comments, I have BTL properties, so I can see this from both the landlord and legal sides).Guarantor clauses need to include a statement to the effect that, should the guarantor's circumstances change so that, in the event of tenant default, they would be unable to maintain their obligations, then a new guarantor should be sought and that, in the event that no new guarantor can be found, the tenancy will naturally terminate upon service and expiry of notice.
Given the time the tenant was at the property, the assured tenancy period had expired.
You'd be a fool to disregard the offer of £10 per month and take it to court, as the former tenant simply would have to provide evidence of an attempt to settle the debt by arrangement. Yes, a court may order a higher repayment level, but this does not make the former tenant bound to pay at this level.
As the house the tenant owns is a jointly owned property, you would not be granted a final charging order as the other mortgagor would need to consent to this, which they rarely (and with good reason) do.
fergywales said:
MarsellusWallace said:
You'd be a fool to disregard the offer of £10 per month and take it to court, as the former tenant simply would have to provide evidence of an attempt to settle the debt by arrangement. Yes, a court may order a higher repayment level, but this does not make the former tenant bound to pay at this level.
Does this not make everyone immune from repaying debts at a reasonable rate?Define reasonable...
Without going into the current income and expenditure of the debtor, you cannot make an informed judgement. Whilst a court would require the disclosure of these details, it does not guarantee that the court may find that, due to the current circumstances of the debtor, they can only reasonably afford £5 a month, for 200 months, as opposed to £10 for 100 months.
Without going into the current income and expenditure of the debtor, you cannot make an informed judgement. Whilst a court would require the disclosure of these details, it does not guarantee that the court may find that, due to the current circumstances of the debtor, they can only reasonably afford £5 a month, for 200 months, as opposed to £10 for 100 months.
fergywales said:
Define reasonable...
Without going into the current income and expenditure of the debtor, you cannot make an informed judgement. Whilst a court would require the disclosure of these details, it does not guarantee that the court may find that, due to the current circumstances of the debtor, they can only reasonably afford £5 a month, for 200 months, as opposed to £10 for 100 months.
Sure. Without going into the current income and expenditure of the debtor, you cannot make an informed judgement. Whilst a court would require the disclosure of these details, it does not guarantee that the court may find that, due to the current circumstances of the debtor, they can only reasonably afford £5 a month, for 200 months, as opposed to £10 for 100 months.
But you say above, "a court may order a higher repayment level, but this does not make the former tenant bound to pay at this level."
Which suggests that even if the court orders a higher payment, the order can be ignored.
Manks said:
fergywales said:
Define reasonable...
Without going into the current income and expenditure of the debtor, you cannot make an informed judgement. Whilst a court would require the disclosure of these details, it does not guarantee that the court may find that, due to the current circumstances of the debtor, they can only reasonably afford £5 a month, for 200 months, as opposed to £10 for 100 months.
Sure. Without going into the current income and expenditure of the debtor, you cannot make an informed judgement. Whilst a court would require the disclosure of these details, it does not guarantee that the court may find that, due to the current circumstances of the debtor, they can only reasonably afford £5 a month, for 200 months, as opposed to £10 for 100 months.
But you say above, "a court may order a higher repayment level, but this does not make the former tenant bound to pay at this level."
Which suggests that even if the court orders a higher payment, the order can be ignored.
If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
fergywales said:
Of course it does not. Just because you take a debtor to court and you receive judgement against them, it does not automatically mean the debtor will abide by the judgement. You will then have to enforce the judgement, throwing more good money after bad. This normally erodes any benefit to repayments being made and will ultimately result in the claimant being further out of pocket.
If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
Perhaps I misunderstood the word "bound".If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
Do you think a statutory demand is a possible route?
Manks said:
fergywales said:
Of course it does not. Just because you take a debtor to court and you receive judgement against them, it does not automatically mean the debtor will abide by the judgement. You will then have to enforce the judgement, throwing more good money after bad. This normally erodes any benefit to repayments being made and will ultimately result in the claimant being further out of pocket.
If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
Perhaps I misunderstood the word "bound".If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
Do you think a statutory demand is a possible route?
No, unless the SD petitioner is willing to spend the £750 minimum on bankrupting the individual served AND has every bit of evidence needed to follow through with the threat AND knows that no other creditor currently in an arrangement will not oppose the petition, it is an abuse of process. With a debt for £1k, a jointly owned property and unknown assets, more good money after bad IMHO (IANAL).
Harsh truth: Take the offered arrangement, suck up the f
k up on the tenancy agreement being substandard and, if needed, get proper legal advice when letting in future (this means pay for it, don't google AST and download a template).Edited by fergywales on Saturday 14th May 10:17
Edited by fergywales on Saturday 14th May 10:18
fergywales said:
Manks said:
fergywales said:
Of course it does not. Just because you take a debtor to court and you receive judgement against them, it does not automatically mean the debtor will abide by the judgement. You will then have to enforce the judgement, throwing more good money after bad. This normally erodes any benefit to repayments being made and will ultimately result in the claimant being further out of pocket.
If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
Perhaps I misunderstood the word "bound".If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
Do you think a statutory demand is a possible route?
Manks said:
fergywales said:
Manks said:
fergywales said:
Of course it does not. Just because you take a debtor to court and you receive judgement against them, it does not automatically mean the debtor will abide by the judgement. You will then have to enforce the judgement, throwing more good money after bad. This normally erodes any benefit to repayments being made and will ultimately result in the claimant being further out of pocket.
If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
Perhaps I misunderstood the word "bound".If a debtor makes an offer, however low, for what, in this circumstance, is a low level debt anyway (sorry to trivialise OP, but that is a fact) then it should be accepted. If you waste your time, the debtor's time and (potentially) the court's time, you are ultimately diluting the debt. Take what is offered, learn from the mistake which gave rise to the debt (landlords negligence to have a proper guarantor in place to cover default of tenant) and move on.
Do you think a statutory demand is a possible route?
If you serve a debtor with an SD and do not intend to follow through with the threat, this is an abuse of process. The second and third points are factors that may hinder a petitioner if/when the matter gets to court.
fergywales said:
Sorry, badly written.
If you serve a debtor with an SD and do not intend to follow through with the threat, this is an abuse of process. The second and third points are factors that may hinder a petitioner if/when the matter gets to court.
And is there any penalty for such abuse of the process? In practice I mean.If you serve a debtor with an SD and do not intend to follow through with the threat, this is an abuse of process. The second and third points are factors that may hinder a petitioner if/when the matter gets to court.
Manks said:
fergywales said:
Sorry, badly written.
If you serve a debtor with an SD and do not intend to follow through with the threat, this is an abuse of process. The second and third points are factors that may hinder a petitioner if/when the matter gets to court.
And is there any penalty for such abuse of the process? In practice I mean.If you serve a debtor with an SD and do not intend to follow through with the threat, this is an abuse of process. The second and third points are factors that may hinder a petitioner if/when the matter gets to court.
fergywales said:
Off the top of my head, I believe it is up to the maximum fine of £5k for multiple offences. See unlawful harrassment (S.40) of Administration of Justice Act 1970 for full text.
I have had a look at it but am not clear which section covers not proceeding after issuing an SD.Manks said:
fergywales said:
Off the top of my head, I believe it is up to the maximum fine of £5k for multiple offences. See unlawful harrassment (S.40) of Administration of Justice Act 1970 for full text.
I have had a look at it but am not clear which section covers not proceeding after issuing an SD.Administration of Justice Act 1970 said:
40 Punishment for unlawful harassment of debtors..
(1)A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract, he—.
(a)harasses the other with demands for payment which, in respect of their frequency or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation,...
(d)utters a document falsely represented by him to have some official character or purporting to have some official character which he knows it has not.
To serve a statutory demand without the intention to petition for the bankruptcy of the debtor is viewed as an intention to cause distress to the debtor to induce payment. If the party serving the statutory demand does not intend to follow through with the threat, they are causing unnecessary distress for the debtor. A statutory demand is falsely represented if the party serving it does not intend to bankrupt the debtor should the debt not be discharged during the notice period, the debtor does not successfully have the statutory demand set aside or an arrangement of repayment is not reached and agreed formally and the statutory demand is withdrawn.(1)A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract, he—.
(a)harasses the other with demands for payment which, in respect of their frequency or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation,...
(d)utters a document falsely represented by him to have some official character or purporting to have some official character which he knows it has not.
fergywales said:
To serve a statutory demand without the intention to petition for the bankruptcy of the debtor is viewed as an intention to cause distress to the debtor to induce payment. If the party serving the statutory demand does not intend to follow through with the threat, they are causing unnecessary distress for the debtor. A statutory demand is falsely represented if the party serving it does not intend to bankrupt the debtor should the debt not be discharged during the notice period, the debtor does not successfully have the statutory demand set aside or an arrangement of repayment is not reached and agreed formally and the statutory demand is withdrawn.
Interesting.I would have thought on this basis the debt recovery agents used by energy companies are committing a criminal offence every day of the week. Their stock in trade seems to be to cause distress to induce payment.
Come to think of it, is HMRC exempt from this law? They have recently been threatening to send bailiffs to take peoples possessions where that individual was already in a payment arrangement.
Manks said:
fergywales said:
To serve a statutory demand without the intention to petition for the bankruptcy of the debtor is viewed as an intention to cause distress to the debtor to induce payment. If the party serving the statutory demand does not intend to follow through with the threat, they are causing unnecessary distress for the debtor. A statutory demand is falsely represented if the party serving it does not intend to bankrupt the debtor should the debt not be discharged during the notice period, the debtor does not successfully have the statutory demand set aside or an arrangement of repayment is not reached and agreed formally and the statutory demand is withdrawn.
Interesting.I would have thought on this basis the debt recovery agents used by energy companies are committing a criminal offence every day of the week. Their stock in trade seems to be to cause distress to induce payment.
Come to think of it, is HMRC exempt from this law? They have recently been threatening to send bailiffs to take peoples possessions where that individual was already in a payment arrangement.
What do you refer to regarding HMRC? Taxation enforcement is a whole different kettle of fish, and the circumstances and definition of the debtor (personal or business) is important in the actions available.
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