Mortgage arrears is the most common reason for repossessions. However, failure to pay secured loans, also known as second mortgages, can also result in repossession.
We all understand that a debt is a debt and at some point it needs to be repaid. There will be a case where all recourse to satisfying repayment has been exhausted and the full legal process is allowed to be completed, leading to bankruptcy, and assets will have to be realised.
This being the case, the parties bringing the action, the mortgage companies, or in the case of a second charge, a loans company or debt collections agency, would almost certainly use a solicitor and or an insolvency practitioner.
If you type ‘Property Repossession’ into an Internet Search Engine, you will see lots of links to sites offering services to help those being repossessed and also links to sites for buying repossessed properties. That is all well and good, but what about the ‘bit in the middle’, the bit between possession of the property and it being sold?
On the surface this would seem to be a simple process, the property is repossessed and then sold and the debt is satisfied. If only life was that simple.
Once a possession order is awarded, the solicitor will ask the court bailiff to taken possession of the property. Court bailiffs are directly employed by the courts and enforce court judgments and possession orders.
After due process, pre-repossession visits to deliver notice of possession etc, the bailiff will take possession of the property and hand the keys over to the solicitor or the solicitors agent.
The mortgage company is legally required to get get the best price for the property in a sale, if another party has brought the action, the court would normally set a minimum price for which it can be sold, either way the property has to be it the best possible condition before sale.
Below are some of the factors to be taken into consideration before the property is sold:
The services provided above is part of the hidden costs of property repossession, they will not be satisfied by the solicitor or the insolvency practitioner, but by a third party appointed by such.
If we highlight property insurance as a case in point. Once possessed, the onus to insure the property falls on the parties who have possess the property. Arranging this insurance is not a simple matter, the property is high risk, it being largely empty etc.
Insurance like this can require certain conditions. One being adequate heating levels to protect from damp and burst pipes. This would require utilities to be turned on and managed as well as paid for. It might also frequent reported visits to property. It could even require that the property be alarmed.
We all know how long it takes to successfully sell a property, even in a buoyant market. Looking after that property in the meanwhile can be a time consuming and complex matter. That is why Solicitors and Insolvency Practitioners use Town and Country’s Property Repossession Management Division to take the pain out of the process.
By Kevin Bishop - Senior Partner at Town and Country Legal Services LLP