Charging Orders and Judgments Payable by Instalments.

Charging Orders and Judgments Payable by Instalments.

An update for landlords and letting agents pursuing arrears against a guarantor, or an evicted tenant that now has property.

This note is really aimed at those with some experience of recovering debts.  If that isn’t you, please feel free to get in touch at

http:www.sjvsolicitors.co.uk/landlord_services.co.uk or email us at info@sjvsolicitors.co.uk, we’ll be happy to help.

Where a tenant has been subject to eviction by the landlord, it may be that the landlord has a money judgment from the court.  The debt can then be enforced against the evicted tenant or a ultimately, a guarantor if there is one.

It should usually the case that as well as an order for possession, the landlord obtains an occupation charge, a money judgement including interest on the arrears, and the appropriate order for costs.

If the tenant who was subject to eviction,  now has a property or a guarantor is available, a charging order is one of a number of ways for the landlord to enforce the judgment.

It used to be that if the court ordered a judgment to be paid by instalments, the landlord had a very time consuming and somewhat uncertain path to obtaining a charging order against the tenant.  The court now has a discretion to make a charging order were the underlying judgment orders a debt to be paid by instalments, and there has been no breach of the instalment order.

Section 93 of the Tribunals Courts and Enforcement Act 2007

came into force on 01.10.12. Section 93 (2), (3) & (4) amends the Charging Order Act 1979.

Note that the court is still not obliged to make a charging order where landlord has an instalment order against the evicted tenant, it now has discretion.

The court “must” take account of the absence of default when deciding whether to make a charging order final.  The landlord cannot enforce the charging order against the evicted tenant until there has been default.  The changes are not retrospective so judgments made before 01.10.12 are not affected.

The interim charging order will continue to be made without a hearing and any issues left to be resolved at the final charging order hearing.  A possible exception is where the judge considering the interim charging order judges the amount of the debt to be too small and decides that a charging order would be disproportionate.  There is no minimum amount which makes applying for charging orders for smaller sums a bit uncertain.  The Tribunals, Courts and Enforcement Act 2007 allows a minimum figure to be set, however, at the time of writing, the figure has yet to be settled.  We recently made an application based on a debt of £600.  The application was made with fingers crossed.  Happily, the charging order was made on that occasion.

There is no need now to make an application for redetermination in order to obtain a charging order where an instalment order has been made.

It remains to be seen how courts will use their new discretion.  When the landlord or agent is before the district judge, the usual arguments should apply.  The principle points under consideration will be the size of the debt and the length of time it will take to be repaid.  If the judgment debtor must wait a long time for their money, then it is reasonable for them to have security.

The court should also be reminded that the charging order cannot be enforced whilst there are no arrears under the instalment order.  This may be somewhat academic as an application to the court must be made by the landlord in order to enforce the charging order against the tenant and experience suggests that rarely will a court be persuaded to order sale of a family home based on a charging order.

The charging order is in reality more a device to obtain security than to obtain immediate payment.  Other forms of enforcement may be pursued by the landlord against the evicted tenant simultaneously with the charging order.  Further points that might be argued in support of the application are that: the former tenant may take the debt more seriously if it is secured, the landlord may be more forbearing if they are secured and that if the landlord is denied a charging order, they may pursue less benign forms of enforcement.

As always, feedback and experience is welcomed.

Simon Vollans LL.M (Bristol) Barrister and Solicitor – 29.10.12

Welcome to the New interactive blog from SJV Solicitors.co.uk

This blog will contain lots of information about the Landlord legal services, Letting Agents legal services and Tenant legal services on offer from SJV Solicitors as well as useful information and news about Landlord Law including Property Law and Tenant Law including Tenant Eviction as well as other things of interest to Landlords, Tenants and those dealing with the law around evictions, rent arears, disputes and disrepair.

This blog will be providing regular posts and news on Landlord and Tenant legal and law issues so please follow the blog or keep coming back and hopefully you will find something of use or of interest to you.

If you want to see more about the Legal Services we can provide to Landlords, Letting Agents and Housing Associations please see our main website: http://www.sjvsolicitors.co.uk/landlord_services.html

More about SJV Solicitors – Landlord & Tenant Solicitors in England & Wales

Our principal, Simon Vollans, was formerly a barrister, having been called to the bar in 2001. Since then, Simon has personally assisted clients with more than 3,500 matters. Clients have included individuals, small and large businesses, banks, building societies and insurance companies.”

Simon provides advocacy training and consultancy to other law firms. He has been involved in high profile land disputes and has had considerable media exposure in local and national news, as well as appearances on programmes such as GMTV, Richard and Judy and Neighbours from Hell.

More recently, Simon cross qualified as a solicitor in order to found this firm.

Simon has been chair of a Housing Association and currently chairs a legal action group.

Areas covered by our Landlord & Tenant Solicitors in England & Wales

Wales

We can provide Landlord & Tenant Solicitor services, including Tenant Eviction, Rent Arrears Recovery and Debt Collection to Landlords, Letting Agents and Housing Associations in all of Wales including, South Wales, South West Wales, South East Wales, Mid Wales and North Wales.  This includes Landlord & Tenant Solicitor services, including Tenant Eviction, Rent Arrears Recovery and Debt Collection to Landlords, Letting Agents and Housing Associations in Carmarthen, Llanelli, Swansea, Neath, Portalbot, Bridgend, Vale of Glamorgan, RCT, Caerphilly, Cardiff, Newport, Cwmbran, Pontypool, Chepstow, Monmouth, Abergavenny, Mertrhyr, Brecon, Powys, Wrexham, Bangor, Rhyl etc.

England

We can provide Landlord & Tenant Solicitor services, including Tenant Eviction, Rent Arrears Recovery and Debt Collection to Landlords, Letting Agents and Housing Associations in all of England including, South West England, South East England, West Midlands, East Midlands, North West England and North East England including Landlord & Tenant Solicitor services, including Tenant Eviction, Rent Arrears Recovery and Debt Collection to Landlords, Letting Agents and Housing Associations in Bristol, Gloucester, Reading, London, Brighton, Southampton, Portsmouth, Birmingham, Derby, Leicester, Nottingham, Stoke, Manchester, Liverpool, Leeds, York, Newcastle etc.