Am i fighting a loosing battle?

BROKEBUT4HOPE

Dear all,

I really hope somebody can advice me on whether I should let go or fight for my home. I filed bankruptcy in Novemebr 2009.

As a result my property became an interest to the state and a charged was placed on it by the company Accurra who had the right to sell the house to release equity for my creditors, this trustee in bankruptcy has up to 3 years to sell the house from the date of Bankruptcy.(I will refer to them as A from now on).
However, as you may know, I was also given the option of getting a family member or friend to save the property by purchasing the equitable interest if there is any -
so I have been trying to negotiate this amount ever since.

There have been several offers and counteroffers going back and thro over a last two years and whilst initially I was trying to get A to agree to an amount that was affordable but now basically the bone of contention is that I just disagree with the amount that they want.

Initially both I and A obtained valuations of the property to get the current market value of the property and assess the equity and there were disagreements on the market value as I didnt believe that A's valuation took into account the actual condition of the flat or the short lease.

Eventually, I got A to agree on a sum of £5500 on the basis of three things
1)the decreasing length of the lease (now stands at 65 years) would significantly reduce the level of the actual selling price of the property
2) the actual mortgage balance had increased since ground rent and service charges arrears had been added and
3)this reflected a discount of £500 of overpayment on IPA charges whilst I was unemployment.

At the moment the mortgage balance stands at around £140,665.00 and the last valuation I got was around £140,000.00 although I bought the property for £151,000.00 in 2008 this was off course when the general market was in a better situation and the lease length was standing around 69 years.

I am not sure what valuation A got but I believe that initiallly they stated that it was valued at around £151,000.000 and therefore believed there was an equity of £9,000. They have NOW REFERRED THE CASE TO THEIR SOLICITORS and adhered to the original valuation and have said they would accept £7000.00 going back on their last offer of £5,500.00.

The reason why I hadnt confirmed the £5,500.00. was because the person who could pay the equity got into a difficult financial situation and also was of the mind that again this final amount did not actually reflect true equity in the property.

This is because of a couple of reasons
1) it has been realised that there is a further £2000.00 of services charge and ground rent arrears to be added to the mortgage balance taking up the mortgage balance to around £143,000.00.
2) the lease is now decreasing further to 64 years
3) the property has arising damp and condesation which needs repair work up to the value of around £2000.00

The above points we believe significantly reduced the actual equity value and we feel that A are asking too much.

I would like to ask what your opinion would be of the current position as outlined in the letter written to me by the solicitors who are now acting on A's behalf?

In my view, I would argue how they obtained a value of £9,000 in equity and have they just made up that amount by subtracting the mortgage balance from the purchase price (151k-141k).
Do they have to take into fact that the actual market price will reflect lease value, property condition and service charge arrears.

I personally do not think that as it stands with the above points taken into consideration that the property has any equitable interest- do you think I am in a position to even argue this or at this point do I need to offer an amount.( An offer of around £2500.00?)

I honestly believe that there is not anything like 7k or even anything more than £3000.00 available in the property. This will only decrease with the decreasing lease value.

I really need to get back to the solicitors by Wednesday the 15th of August - yes this wednesday otherwise they will be applying for a sales order from the court asking for me to leave my home within 28 days.

Also do I have the right to put these arguments across in court.

Am i fighting a loosing battle? Should I just give it all up and just rent?

Please help, it will be so much appreciated.
Please let me know if there is anything else i can clarify?
Many thanks

PippaGirl_2

I am sure someone with more knowledge and experience will come along but just wanted to say, given the figures you've quoted if it were me I would make a full and final offer of £3000 if you really believe the property is worth that to you, and accept that if they turn this full and final offer down you will just let it go and find something to rent elsewhere. That would be my decision. In a way a decision like that removes the 'stress' and the 'fight' and leaves the ball in their court and you go with what they decide. But the boundariers were fair and were yours.

BROKEBUT4HOPE

Thank you so much Pippagirl.
I am of that mind too, I Just feel sad about it and feel that I will never get a mortgage again - not that, that really matters in the scheme of life itself but hey hard to fight the conditioning!

Thanks again P and look forward to another suggestions or advice!

skintandfat

In Scotland the IP has to fill in a form seeking permission from the AIB (Accountant in Bankruptcy- Scottish Insolvency Service) to get permission to sell a house
This has to be done before being taken to court

You have it all to gain and nothing to lose- let them go to court and offer a reasonable full and final settlement, then you have done all you can

You could even argue to the judge to throw out their forced sale and accept your offer.

Better to have tried and failed rather than not to have tried atall

I think the way it's done in England and Wales is poor- in Scotland they have to value the house in the first 3 months and deal with the equity at the 6 month period.
It cost me £515.00 to get our house back as it was in negative equity.

BROKEBUT4HOPE

Thank you Skintandfat.
I have a few further questions that I hope you dont mind looking out.
1) should I make an offer before it goes to the courts as if it does eventually go there, wont the courts be of the mind that I didnt even try to negotiate.
2)Do you think there will lots of charges in court

I have looked at my whole case again over the weekend and can see that a while back I asked for freeholder of the block of flats what it would cost to renew the lease. They quoted (and this was back in 2008) that it would cost 20k plus admin charges. I have been since that this only increases as the length of the lease decreases!

Do you think this can be knoocked of the actual market price and if this is the case then I would actually be in negative equity!

Therefore I am still of the mind that there is absolutely no equity in the property yet I am too afraid not to offer anything as they may just play hardball and i get chucked on the streets!

Thank you for any thoughts!

silvercar

I have looked at my whole case again over the weekend and can see that a while back I asked for freeholder of the block of flats what it would cost to renew the lease. They quoted (and this was back in 2008) that it would cost 20k plus admin charges. I have been since that this only increases as the length of the lease decreases

You could ask again and present the updated information to the court as further evidence that there is no equity in the property.

Do you think this can be knoocked of the actual market price and if this is the case then I would actually be in negative equity!

Compare like with like, either:
1. equity = value with extended lease less the cost of lease extension and less outstanding mortgage.
2. equity = value with short lease less outstanding mortgage.

Generally there should be more equity (or less negative equity) with the first calculation because that makes the property more mortgagable and involves less hassle for a buyer. But if you have trouble convincing people that the value is limited by the short lease then the first calculation may be the way to go.

debtinfo

Well the obvious way to agree a value for the property is to ask them to agree to a mutually acceptable chartered surveyor with his value whatever it is being binding

BROKEBUT4HOPE

Thank you for all the great advice. Silver car, not sure how I would calculate the value of the property once the lease had been renewed- any help there please.
Debt info - I need to come up with an offer or something before the solicitors appy for repossession order this Wednesday the 15.
Do you think I should for a consideration to this or let it go to court.
I am also worried about court costs. Of course I cannot afford a lawyer and will be making all my own representations
Thank you again everybody - all of your suggestions really are helping me out.

debtinfo

well you can ask them for more time to get that valuation, the court costs would not be awarded against you they would be taken out of the property if sold of the amount paid over if an agreement is reached

BROKEBUT4HOPE

Thank you again Silvercar and Debtinfo.

Upon your suggestions I can now do three things:

1) List the reasons why I feel that there is no equity in the property i.e short lease, increasing mortgage balance with the addition of service charge arrears and condition of property
and then I could offer £2000 in full and final and this is really what I would really hope to work to make them go away as simplistic and haphazard as this sounds- I really hate this hanging over me!
2)List the above and maintain that there is no equity- though I feel that they will not accept this and take me to court- which as stated above continues this and is really the last way to go.
3) as debtinfo suggested, request a mutual chartered surveyor and more time for this- again this prolongs this matter as this has been going for 2.5 years since i declared B.

I know that you guys cannot tell me what to do but I am just hoping that by putting this out you may have similar experiences or expertise to tell what has worked the best with similar cases!

The clock is clickinhg and the pressure is mounting and i really really appreciate everybodys time and support here!
THANK YOU:eek::o:o

BROKEBUT4HOPE

BROKEBUT4HOPE wrote: »

Thank you again Silvercar and Debtinfo.
Sorry I have re-postin this as i am hoping for any other ideas!
Upon your suggestions I can now do three things:

1) List the reasons why I feel that there is no equity in the property i.e short lease, increasing mortgage balance with the addition of service charge arrears and condition of property
and then I could offer £2000 in full and final and this is really what I would really hope to work to make them go away as simplistic and haphazard as this sounds- I really hate this hanging over me!
2)List the above and maintain that there is no equity- though I feel that they will not accept this and take me to court- which as stated above continues this and is really the last way to go.
3) as debtinfo suggested, request a mutual chartered surveyor and more time for this- again this prolongs this matter as this has been going for 2.5 years since i declared B.

I know that you guys cannot tell me what to do but I am just hoping that by putting this out you may have similar experiences or expertise to tell what has worked the best with similar cases!

The clock is clickinhg and the pressure is mounting and i really really appreciate everybodys time and support here!
THANK YOU so much everybody for taking the time to read and consider this!:eek::o:o

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