You have taken the step to secure your debt by way of a charging order but what next? You want your money but despite notifying the debtor of your intention to obtain a charging order and having notified the debtor the charging order has been obtained, payment remains outstanding. An application for an order for sale of the property is an option you may want to consider.
Once a final charging order has been obtained you have the option to leave the charge in place and the debt will accrue 8% interest per annum. But what if you want your money now and the judgment debtor is still ignoring your requests for payment? Well the next step would be to make an application to the court for an order for sale of the property with a view to obtaining a court order to force the sale of the property to enable payment of the debt owed.
When considering whether to make an application for an order for sale, it is important that some investigation work is carried out to ascertain if there is likely to be sufficient equity in the property to satisfy the judgment debt.
The starting point of the investigation is to review the Office Copy Entry that is held at the Land Registry. This will reveal the date the property was purchased and in some instances the price paid. The Office Copy Entry will also reveal if there is a mortgage or any other charges on the property. However, it will not reveal the amount owed under the charges. We would consider the date when the property was purchased and the purchase price alongside an estimate of the current value of the property. As a rule of thumb, if the property was purchased several years ago it would usually have increased in value and therefore have equity in the property, particularly if the only charge on the Office Copy Entry is a mortgage on the date the property was purchased.
Often the application for an Order for Sale will prompt the Judgment debtor to contact you and make payment or enter into an agreeable payment proposal to avoid the sale of the property being ordered by the court. Any agreement reach would include an agreement that the costs of the order for sale application be paid by the debtor.
What is an order for sale?
A court order that forces the sale of the debtor’s property that is subject to a charging order.
What is the benefit of apply for an order for sale?
To prompt payment of the debt secured by the charging order. This could be by the debtor making full payment or by agreeing a repayment schedule or by the court granting an order that the property be sold.
Can you force the sale of a jointly owned property if only one of the owners is a judgment debtor?
Yes. In this instance you will need to apply under the Trusts of Land and Appointment of Trustees Act 1996.
What factors are relevant when the court decide to grant or refuse an order for sale?
An order for sale is granted at the courts discretion. It is unclear exactly what the scope of the discretion is but the information required on the application indicates the court will consider any prior charges over the property, the sums owed to the judgment creditor, the value of the property, the judgment debtors interest in the property and the ages of the occupants of the property and any other Human Rights issues.
I have obtained a County Court Judgment that the court ordered be paid by instalments and I have obtained a Charging Order to secure the debt. The Judgment debtor has made payments in accordance with the instalment order. Can I still apply for an application for an order for sale?
No, you cannot enforce the charging order if the judgment debtor is up to date with instalments.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.