garnishee order

Mad_maxx

i bought a property at auction a few weeks back , sale not closed yet due to the christmas break , it was a receivership sale .

Received a phone call from an anonymous caller today, asking me if I had bought a property in a particular location , i have no idea how this person got hold of my phone number but they would not identify themselves, they demanded to know who i was from the start, i did not answer those questions as i never identify myself before the person calling does first

They did reveal however that they carried out work on the property in the past and that they would be putting a charge on it, obviously i was taken aback but the conversation confirmed nothing in terms of the identity of the person or my own as i just listened to what was said , i suspect they know my identity as they managed to get hold of my phone number. that itself is unpleasant

I phoned my solicitor afterwards and while they thought it very strange behaviour, they said the individual would find it difficult to get a charge on the property as contracts are already signed ?

Having read a number of articles online however , it appears a creditor can get a garnishee order which allows a creditor to seek - collect a debt from a third party who owes money to the debtor. in this case the balance is owed to the bankrupt debtor

While on the surface horrifying, how enforceable is such a charge in practice, i know charges have a shelf life so provided an innocent party like myself holds on to the property, can much be done in real terms?

There was no reference to this creditor in the contract for sale so my solicitor did not miss anything, the main lender was the only title charge referred to

might i be right in saying that the only way this person has any chance of succeeding here is if the sale is not yet closed , if the debtor is paid off , the creditor cannot collect from myself or put a charge on the property ?

its possible my solicitor is not experienced enough to advise on this subject , they didnt suggest we need to rush to close or anything like that.

Don’t worry about it. If he gets the charge (only possible by judgment mortgage or maybe a lien) on before the sale concludes then the charge is paid off by the vendor.

If the sale goes through first then he can’t put the charge on as the property has been sold. Although I really don’t think you’ve anything to worry about because nobody who actually had a clue what they were doing would call you like this.

Finally, none of his available options is a garnishee order so no idea why you’ve mentioned that.

Mad_maxx

Deleted User wrote: »

Don’t worry about it. If he gets the charge (only possible by judgment mortgage or maybe a lien) on before the sale concludes then the charge is paid off by the vendor.

If the sale goes through first then he can’t put the charge on as the property has been sold. Although I really don’t think you’ve anything to worry about because nobody who actually had a clue what they were doing would call you like this.

Finally, none of his available options is a garnishee order so no idea why you’ve mentioned that.

a garnishee order is where a creditor follows a third party ( me) who owes money to the creditors debtor(albeit through a receiver) , i have not as yet paid the balance on this property so i technically owe the debtor money ( albeit through the receiver ), the guy who rang me could go before a judge and get the charge slapped on the property.

which begs the question , is closing the sale as quickly as possible now an imperative ?

also , would a charge being added perhaps make the contract for sale null and void ?

I just like to develop my understanding of the legal ramifications

Mad_maxx

Mad_maxx wrote: »

a garnishee order is where a creditor follows a third party ( me) who owes money to the creditors debtor(albeit through a receiver) , i have not as yet paid the balance on this property so i technically owe the debtor money ( albeit through the receiver ), the guy who rang me could go before a judge and get the charge slapped on the property.

What sort of charge could he have “slapped” on the property, precisely? A garnishee order cannot impair your purchase of this property, it can only impair the sale proceeds received by the receiver and even then the receiver would have a very strong argument at the inter partes stage of a garnishee application to have the conditional order set aside as an attempt to interfere with a superior charge holder.

Mad_maxx

[Deleted User] wrote: »

What sort of charge could he have “slapped” on the property, precisely? A garnishee order cannot impair your purchase of this property, it can only impair the sale proceeds received by the receiver and even then the receiver would have a very strong argument at the inter partes stage of a garnishee application to have the conditional order set aside as an attempt to interfere with a superior charge holder.

I don't know what sort of charge, maybe he carried out fifty grand worth of refurbishments and wasn't paid?

Also wondering can an auction contract protect the vendor from unforeseen creditors crawling out of the woods?

One hopes my solicitor didn't overlook that kind of text in the contract, i will ask them later

You should ask them

randomrb

As has been said unless he has a charge registered before the sale you are not at risk and closing searches will show if he gets it registered or not. Either way it shouldn't affect you it can only affect were the sale price goes

Claw Hammer

If this individual has already got a judgement against the former owner he can get a garnishee order against the receiver to pay the residual equity up to the value of his debt to the claimant in preference to the owner. If he gets a judgement mortgage on before the closing of the sale, it will rank after the banks interest in the property and will have to be satisfied from the equity.

Mad_maxx

Claw Hammer wrote: »

If this individual has already got a judgement against the former owner he can get a garnishee order against the receiver to pay the residual equity up to the value of his debt to the claimant in preference to the owner. If he gets a judgement mortgage on before the closing of the sale, it will rank after the banks interest in the property and will have to be satisfied from the equity.

could it mean i have to increase the price from where the hammer fell ?

randomrb

Mad_maxx wrote: »

could it mean i have to increase the price from where the hammer fell ?

No

John Hutton

The person went bankrupt? It was a unsecured debt?

The creditor can only seek money through the bankruptcy estate. Basically he is **** out of luck

Don't worry about it and contact the official assignee if he continues to contact you.

Mad_maxx

John Hutton wrote: »

The person went bankrupt? It was a unsecured debt?

The creditor can only seek money through the bankruptcy estate. Basically he is **** out of luck

Don't worry about it and contact the official assignee if he continues to contact you.

in other words the guy was a grade A chancer ?

Graham

Or got his legal advice by Googling for it.

Mad_maxx

Graham wrote: »

Or got his legal advice by Googling for it.

might be a fabricated story designed to spook the buyer, perhaps the original owner put him up to it ?

people who have their properties repossessed can be spiteful ?

Graham

I wouldn't waste any time thinking about, certainly not after talking to a legal professional if I was any way concerned.

Mad_maxx

Graham wrote: »

I wouldn't waste any time thinking about, certainly not after talking to a legal professional if I was any way concerned.

i just asked my solicitor if there was anything in the contract which shielded the vendor from a creditor crawling out of the woods ?

im not sure how wide a contract can be drafted , to protect against all sorts of nasty surprise things arising post signing ?

perhaps no such clause options exist ?

Mad_maxx

Mad_maxx wrote: »

i just asked my solicitor if there was anything in the contract which shielded the vendor from a creditor crawling out of the woods ?

im not sure how wide a contract can be drafted , to protect against all sorts of nasty surprise things arising post signing ?

perhaps no such clause options exist ?

Your solicitor answered presumably so no need to double-check with strangers on the internet.

Mad_maxx

Deleted User wrote: »

Your solicitor answered presumably so no need to double-check with strangers on the internet.

no , actually , they didnt answer unequivocally , they said they thought it would be difficult for this guy to get a charge on the property , they said no more than that , the comments on this thread have been much more definitive

i just asked them if they missed anything in the contract pre auction , they were unlikely to say they did miss something but hopefully they were on top of their game

Graham

Mad_maxx wrote: »

i just asked my solicitor if there was anything in the contract which shielded the vendor from a creditor crawling out of the woods ?

On what basis do you think somebody else's creditor might have a claim on what would be your property once the sale is completed?

Seth Brundle

Mad_maxx wrote: »

no , actually , they didnt answer unequivocally , they said they thought it would be difficult for this guy to get a charge on the property , they said no more than that , the comments on this thread have been much more definitive

i just asked them if they missed anything in the contract pre auction , they were unlikely to say they did miss something but hopefully they were on top of their game

My view would be that if the person on the phone was serious and was able to have a charge put on the property then they would have had no problem identifying themselves.

That they kept asking you who you were is odd. Could they have been a disgruntled bidder?

As for how they got your number, it is probably out there to find quite easily. Many people freely give away their personal data without much thought. They could also have chanced their arm asking the estate agent or someone involved in the sale who the winning bidder was.

If they call again and again refuse to identify themselves, I'd tell them where to go in a rather uncivil manner before hanging up on them!

Mad_maxx

Seth Brundle wrote: »

My view would be that if the person on the phone was serious and was able to have a charge put on the property then they would have had no problem identifying themselves.

That they kept asking you who you were is odd. Could they have been a disgruntled bidder?

As for how they got your number, it is probably out there to find quite easily. Many people freely give away their personal data without much thought. They could also have chanced their arm asking the estate agent or someone involved in the sale who the winning bidder was.

If they call again and again refuse to identify themselves, I'd tell them where to go in a rather uncivil manner before hanging up on them!

If the estate agent leaked my information, that's a data privacy violation

Graham

Seth Brundle wrote: »

My view would be that if the person on the phone was serious and was able to have a charge put on the property then they would have had no problem identifying themselves.

My view would be they'd already have done it. They wouldn't be calling complete strangers to talk about it.

Mad_maxx

Graham wrote: »

On what basis do you think somebody else's creditor might have a claim on what would be your property once the sale is completed?

Sale isn't completed yet, deposit paid ten days before Xmas, my solicitor took a break and was late back at work so things only getting back on track now

Thought perhaps the period between auction and closing might allow unforseen events arising which is why I asked the solicitor if the vendor drafted anything to cover their ar5se against potential nasty surprises

if someone tells you they plan to put a charge on a property , you begin to ask questions as to what options are available during an interim period

seems they were just full of sh1t .

randomrb

Graham wrote: »

My view would be they'd already have done it. They wouldn't be calling complete strangers to talk about it.

This is spot on, If you were in a situation of trying to get a charge registered before a sale finalises you aren't going to give them a heads up...

Mad_maxx

OK I'm satisfied that i have no loss to fear personally.

If this guy manages to get a charge and it shows up prior to close, could it delay closing and allow me to serve a completion notice?

Might i be able to recover my deposit if closing was delayed for a few months in light of this?

That's not my intention right now but I've read about such scenarios