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Ask Clare Your Own Question
Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 34105
Experience:  I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
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I'm going through an ancillary proceedings and I own a property

Customer Question

I'm going through an ancillary proceedings and I own a property in my name only. My ex currently lives there and there is a home rights notice on the land registry. There is a mortgage on the property that I'm liable for and around 5% equity. There is a first charge on the property secured against that loan. The loan is with a bank but it's an offshore bank and is secured against a trust.
My question is can the family court just assign the property to my ex. The bank representative is saying they would need their permission. The court wants me to secure the housing in a slightly different way but I'm not agreed because they won't give me a clean break so it's at a slight stalemate except I'm thinking they maybe able to just override the loan and assign it to my ex to break that stalemate. The loan is a deferred interest loan so it's at HMRC benefit in kind rate but I don't have to pay it back until the property is sold but it happens that house prices over many years have increased more than this rate compounded.
Submitted: 2 years ago.
Category: Family Law
Expert:  Clare replied 2 years ago.
Hi
Thank you for your question.
My name is ***** *****
I will do my best to help you but I need some further information first.
How do the court wish you to deal with the matter?
Clare
Customer: replied 2 years ago.

They want some 3rd party which is another trust but UK based to purchase the property outright so there is no mortgage against the property. They have accepted they have no authority to order the trustee's of this trust to do this but have requested. The trustee's are not going to do this as they don't feel it's in the trusts interest. So I'm thinking they will force me to hold onto the mortgage or sign a deed of trust or just hand over the property to my ex if they can which is what I'm really asking. I would prefer to hand back the property to the bank rather than sign a deed of trust under the terms they are stating and I've told them as much.

Expert:  Clare replied 2 years ago.
Hi
The Court can certainly Order that you continue to pay the mortgage and that the property is held on trsut for your ex alone so that as and when it is eventually sold she alone will receive the equity.
I hope this deals with your query
Clare
Customer: replied 2 years ago.

To be clear then, they cannot just "transfer" over the property to her without the lender who holds the charge's permission ?

They can force me to continue paying the mortgage, although this is at the lenders discretion as the lender may not believe that I can service the mortgage if it is in negative equity.

The property could be held in trust so as when it is sold or the loan called in any equity in the property would be given to my ex ?

Expert:  Clare replied 2 years ago.
Hi
Yes the Court can Order that the ownership of the property is transferred to your ex - but that transfer cannot be registered at the Land Registry without the agreement of the mortgage company
The payment of the mortgage is not at the lenders discretion - if you are paying it then the mortgage stands - after all there is no benefit to them in repossessing a property in negative equity
Clare
Clare and 2 other Family Law Specialists are ready to help you
Customer: replied 2 years ago.

The mortgage is differed interest so I don't month to month pay the mortgage it is added up compound over many years at HMRC's benefit in kind rate. The house value is currently about 5% greater than the loan value. There is a clause in the agreement that states they can call in the loan if they are concerned they will not get the money returned. So if the loan was greater than the value I'm thinking they would be required by the terms of the loan agreement to call in the loan and force a sale of the property. Does that sound reasonable.

Expert:  Clare replied 2 years ago.
Hi
Actually no I am afraid not - in fact it sounds very likely to annoy the court
Clare
Customer: replied 2 years ago.

lol I think they are already annoyed so it makes no difference to be honest but I don't believe a bank can be forced to continue to lend me money if I've broken one of the loans clauses. I will check with the lender, thanks.

Expert:  Clare replied 2 years ago.
Hi
I woudl warn you that if you do that the financial consequences are likely to be horrendous to you but it is of course your choice
Clare
Customer: replied 2 years ago.

Essentially they are taking everything from me personally and have assigned me all costs with the expectation that the trust will step in to help me out which it never has in the past but I get their logic. The consequence for them of there not being anything in this situation for me personally is that I don't care what the court say's or does and I am just looking for ways to frustrate their process without being found in contempt.

Expert:  Clare replied 2 years ago.
Hi
Frankly from what you have said there is no way of doing this - and attempting to do so will impact most on your children
Clare

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