What Happens if a Judge Orders a House Sale?

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What Happens if a Judge Orders a House Sale?
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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 what factors will be considered? And can a spouse refuse to comply with this order?

Keep reading for answers to these questions.

What causes a judge to order a house sale?

When property owners are behind on their mortgage repayments (also known as being in mortgage arrears), lenders usually apply to a court 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.

If the judge is satisfied that the homeowner can meet their repayments in a ‘reasonable timeframe’, the homeowner may be able to keep the house.

Similarly, if the court feels that the hardship caused (i.e., by house repossession) is disproportionate to the debt owed, they may side with the homeowner, too.

However, if the court rules in favour of the lender, then the judge will 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 slightly 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 and therefore (hopefully) repay all their debts.

There are instances where a property is sold via auctions or cash-buying companies after a court orders the sale. 

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 you (the homeowner).

As with all sales on the ‘open market,’ your 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 you 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, such as whether the property is a family home to dependent children.

They may also look at who has custody of any children (where applicable).

When applying for a court-ordered house sale during a divorce, you will usually need to demonstrate why alternatives to a sale are not feasible (e.g. transfer of deeds or buyout).

You may need to provide additional documentation, such as copies of mortgage terms, bank statements, and a property valuation.

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, the case will be heard in court.

This allows both parties to make their case. And once the court makes its decision, both parties are legally bound to comply with it. 

What is a Mesher Order?

A Mesher Order is a court order that enables you to postpone the sale of a shared home until your youngest child turns a certain age or has completed 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 your mortgage situation.

If you and your partner were married and both had your names on the mortgage, you may have to make some difficult decisions if you divorce.

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.

If only one person resides in the house moving forward, they will usually need to afford all the monthly repayments independently. This can be challenging since most mortgages are secured on a two-income basis.

You may need to remortgage your property so that the repayment terms may change altogether.

However, a judge might order a house sale if mortgage repayments are consistently unmet.

How is home equity determined in a divorce?

To determine home equity during a divorce, you must have clear information about how much equity is in the property.

If the two ex-partners disagree about the property’s value, a court can order an independent valuer to assess the house. Their valuation is then taken as the official amount.

Once they agree on the amount of home equity, the ex-partners can decide how to divide the equity between them.

If the two parties are unable to agree, a solicitor may need to be hired to negotiate a settlement. If that fails, a court order can dictate how a divorced couple divides their home equity.

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