The columnist Earl Wilson once wrote:
If you think nobody cares you’re alive, try missing a couple of car payments.
The same could be said of mortgage repayments. If you fail to meet them, your lender can apply to a court to repossess your house.
So, what exactly is the process of a judge ordering a house sale? Is there a way you can delay the process? And can a spouse refuse to comply?
Keep reading for answers to these questions.
What causes a judge to order a house sale?
Property owners sometimes fall behind on mortgage repayments. (This is also known as being in mortgage arrears).
When they do, lenders an apply to the courts to repossess the house.
A court will hear each case with both parties present.
The homeowner can submit an N244 form and explain why they feel the house should not be repossessed. This form should include a clear plan for meeting all financial repayments.
Several outcomes are possible at this stage, for example:
- The homeowner might prove that they meet repayments in a ‘reasonable timeframe’. If the court is satisfied with this, the homeowner may be able to keep the house
- Court might rule that house repossession is unnecessary. This might be because hardship caused by it is disproportionate to debt owed
- The court might rule in favour of the lender and order the house to be sold.
A judge may also order a house sale in a divorce case. We have explained more about this below.
Can you delay a house sale ordered by a judge?
Once the house sale is ordered, it is possible to delay when this happens.
The court must consider all circumstances, including:
- Children’s welfare (the judge may give the family a window of time to sort out other living arrangements)
- A family’s financial resources
- The behaviour of the spouse in matters related to mortgage repayments
How will the house sale be carried out?
Typically, your house will be sold via an estate agent. This enables the lender to get the maximum amount of money back on it.
There are instances where properties are sold via property auctionsor cash-buying companies.
Who gets the proceeds from a judge-ordered house sale?
The money from a house sale will go to the lender. If cash remains after the debt is paid off, it will go to the homeowner.
As with all sales on the ‘open market,’ estate agent will also take a percentage commission on the proceeds.
Depending on the estate agent’s fees, this is typically between 1% and 3% of the final selling price.
Can a spouse get a court order to sell during a divorce?
If you are going through a divorce, you can apply to a court for a sale to be forced on a jointly owned house. A judge will then review the situation and hear both sides of the argument.
The court will consider several factors regarding your circumstances. For example, whether the property is a family home to dependent children.
They may also look at who has custody of any children (where applicable).
Applicants of court-ordered house sale must demonstrate that alternative options are not feasible. These alternatives might include transfer of deeds or buyout.
Proving this requires documentation, such as:
- Mortgage terms
- Bank statements
- A property valuation by an objective third party.
A qualified solicitor can provide more guidance in this area.
Can a spouse refuse to comply with a court-ordered house sale?
When one of the partners applies to force a house sale, both parties will make their case in court.
Both parties must comply with the court’s ruling.
What is a Mesher Order?
A Mesher Order is a court order that to postpone the sale of a shared home until a child turns a certain age. This age is often when they complete education.
It typically enables one party to remain in the house with the children. They will still be responsible for the mortgage repayments.
Can divorce affect your mortgage?
A divorce can affect homeowner’s mortgage situations.
Divorcing partners with a shared mortgage may have to make some difficult decisions. There are several choices.
One party buying the other party out
Firstly, one person can buy the other out (in other words, purchase their share of equity in the property).
However, this can often be expensive, so you are not guaranteed to be able to afford it.
Remortgaging
If only one person stays in the house, they will usually need to afford all the monthly repayments. This can be challenging since most mortgages are secured on a two-income basis.
To do this, they may need to remortgage the property. If they can’t, or if mortgage repayments are consistently unmet, judge might order a house sale.
How is home equity determined in a divorce?
Establishing the details of home equity is essential during a divorce.
Both parties disagree about the property’s value. If so, a court can order an independent valuer to assess the house. Their valuation is then taken as the official amount.
Once the property’s value is known, the ex-partners can decide how to divide it.
If the two parties are unable to agree, a solicitor may need to negotiate a settlement. If that fails, a court order can dictate how a divorced couple divides their home equity.
