When is an Order for Sale used?
An order for sale is used to enforce a charging order. However, in practice the courts rarely make orders for sale if the property is the judgment debtor’s home and it is occupied by children.
Before making an application it is worth considering whether there is likely to be sufficient equity in the property to discharge the judgment sum if an order for sale is made. If there is not sufficient equity obtaining an order for sale will be a pointless and expensive exercise.
Office copies will confirm the price paid for the property if it was purchased after December 1994 and whether there are any mortgages, charges or other charging orders on the property. An office copy will not, however, state the amount owing under any mortgage or charge. For this reason it is not possible to be sure whether there is any equity in the property. Generally if a property was purchased some time ago and a mortgage or charge has not been registered recently it is fairly safe to assume that there will be some equity in the property. However, if property prices have plummeted since the property was purchased that may not be the case. Information as to the prices of properties recently sold in the same area is readily obtainable from the Land Registry’s website. However, such information should be treated with some caution as the property in question may be very different to the other properties which have recently been sold in the same area.
How is an Order for Sale obtained?
Generally applications for an order for sale should be made to the court which made the charging order. The application should be made by way of a fresh set of court proceedings which should be made in accordance with Part 8 of the Civil Procedure Rules. A copy of the charging order should accompany the Claim Form as should a witness statement which should contain the following information:
Identify the charging order and the property to which the application for an order for sale relates;
The amount owed by the judgment debtor when the charging order was made and the amount owed at the date of issue of the claim;
Confirm, so far as is known, that the judgment debtor owns the property (up to date “office copies” which can be obtained from the Land Registry will generally suffice);
Confirm the names and addresses of any other creditors who the judgment creditor knows have prior charges or other security over the property (the office copies will generally suffice);
An estimate of the price which is likely be obtained on the sale of the property (this will generally involve obtaining a “drive by” valuation from an estate agent);
Details of every person whom to the best of the judgment creditor’s knowledge is in possession of the property;
In the case of residential property, a statement as to whether a Class F land charge or notice under section 31(10) of the Family Law Act 1996, or under any provision of a previous act has been registered. If it has it should be stated on whose behalf the charge or notice has been registered and confirm that the judgment creditor will serve notice on that person.
The judgment creditor is required to take all reasonable steps to obtain the information set out above before making an application for an order for sale. If a judge takes the view that the judgment creditor has not taken all reasonable steps an order for sale is unlikely to be granted.