If the plot is sold to a creditor, do we still own the house we paid for on this plot?

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If the plot is sold to a creditor, do we still own the house we paid for on this plot?

Post by Admin1 on Thu Sep 25, 2014 8:41 am

NO: WHEN THE PLOT IS SOLD, YOU LOSE YOUR INVESTMENT

"The legislation which enabled the registration of Contracts of Sale at the Land Registry came into effect in 2008. I can confirm that your Contract was registered under the new legislation on 15/08/2008 with registration number 1473/2008.

When the legislation first came into effect, there was still some uncertainty about what actions would be prevented as a result of a Contract being registered. It was clear that once a Contract was registered, the vendor would no longer be able to sell/transfer the property to a third party without the consent of the purchaser. However, whether or not judgments could still be registered over properties and enforced against properties over which Contracts of Sale were already registered was still unclear. At that time, the courts took the view that there was nothing in the legislation preventing the registration of judgments and enforcement of judgments against properties over which Contracts of Sale were already registered and so this practice continued. Therefore, even though a number of clients (including yourself) did register their Contracts of Sale at the Land Registry under the new legislation in 2008, judgments were still given and registered over those properties and compulsory sale orders were granted against those properties by the courts.

The view has now changed and it is no longer possible to register judgments/obtain compulsory sale orders against properties over which Contracts of Sale are registered. However, these judgments and compulsory sale orders were given by the courts before that change came into effect. As mentioned in my previous email, on this basis, it may be possible to initiate proceedings to try to halt the compulsory sale. There are currently a number of similar cases going through the courts in which purchasers on other sites who have registered their contractual interests are seeking to prevent the compulsory sale by court order of their properties by third party creditors by arguing that since their Contracts of Sale were registered prior to the memorandums/compulsory sale orders, their Contracts of Sale should take priority over these.

However, the outcome of these cases is not yet clear. In addition, the total legal fees involved in such litigation could run into several thousand pounds. As mentioned in my previous email, even if we are successful, there are also other judgments which have been registered over this site and these judgment creditors may also be able to apply for a compulsory sale order and we would then have to go through the same process again to get this stopped. Moreover, this still does not resolve the problem of the fact that while the title deeds remain in the name of Belgravia Estates and subject to these judgments, it is impossible for title to pass to you and would not assist you in recovering the money which you have paid for this property. There is still, currently, no mechanism for forcing the transfer of title to you.

Unfortunately when a compulsory sale takes place in respect of a particular plot, it includes the plot and all buildings standing on the plot – it is not possible to have a separation of ownership of the land and the buildings. Therefore, it cannot be argued that only the land and not the buildings would pass to the purchaser as a result of the compulsory sale. "

So in short NO you lose any right to the property.

Fragment from an e-mail by Peter Clark

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Re: If the plot is sold to a creditor, do we still own the house we paid for on this plot?

Post by Barbie26a on Thu Sep 25, 2014 5:56 pm

Is there any idea of the date when the change of thinking mentioned in paragraph 3 took effect?

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