www.iva.co.uk

Hi,
I am in a bit of a quandary here & hoping that anyone with legal knowledge of the workings of the IVA system can help me with my issue.
Briefly, here is my story & the position I find myself in:
I completed my 5 year IVA contract on March 1st 2021 when my final payment was made. FYI, a property I owned 50/50 with my mum, was named in the IVA and a charge placed on the deeds.
The terms of my IVA stated that if at my final financial review the house was valued with equity greater than £5000, a further 12 months payments would be due to the IVA agreement. Pretty standard clause from what I have gathered for other IVA's.
I provided them with a valuation by a local property agent with my final I & E report, which indicated that there was less than the £5000 equity in the house. The company emailed me confirming that as there was insufficient equity, it was to be removed under the terms of the IVA & would no longer be considered under the agreement.
I was informed at that time that my completion certificate & report could take up to 6 months to be concluded.
Anyway, in June my mother decided that she wanted to sell the house. She was moving into a care home, due to her dementia. She knew a lady that had been looking for a house to buy or her disabled daughter and had been searching for a very long time for a suitable house. Mum's house was ideal & because she knew mum had been looking for, but was unable to find one, she offered £10,000 more than the market value in order to secure it and stop mum putting it on the market with an agent.
So the wheels were set in motion with solicitors, but it was discovered that there was a charge on the deeds and the buyer wanted this removed before they would complete. My solicitor contacted the IVA company to request that they remove the charge and they then said that they were going to rescind the house as a consideration because this lady had offered more than the earlier valuation ! You can only imagine my horror at this.
They are claiming the additional monies due under the windfall clause attached to the mortgage and refused to issue my completion certificate until the monies had been settled.
That was until I today received my completion certificate by secure login and and on it it doesn't mention anything at all about the house sale. In fact it states like before that the house was removed as consideration because the equity was less than £5000 and the closing financial statement didn't contain any reference to any monies relating to the house sale either.
I have asked my solicitor to hold off on the completion until I get advice, so I'm hoping desperately that someone here can really help me decide what to do next and where I stand legally!
Thank you
Stu

Until the end of your post I would have said that, as the completion certificate had not been issued, the IP was within his or her rights to rescind, as the sale was, technically, during the IVA. However, now that the certificate HAS been issued the IVA is complete and the sale is not taking place during the arrangement. The IP should remove the restriction immediately as per the declaration that the property is excluded and the arrangement formally completed.

Before going to the (not inconsiderable) expense of seeking legal advice I would simply, politely, request that the IP now removes the restriction in the light of the arrangement having been formally concluded. They might well have, having reconsidered, simply decided 'to hell with it and close'.

Thank you so very much for your much needed advice Foggy.

I was much of the same mind as you, but wasn't sure if the windfall clause that seem to be indigenous to most IVA's would cover the sale of the house because it was started within the period that my IVA agreement wasn't 'legally' finalised with the issue of my certificate and closing financial statement.
As you say though, they have now issued the certificate and that should be the end of it as far as I'm concerned.

In the first instance, when my solicitor approached the IVA company to request the removal of the deed condition, she was told, by them, that my portion of the profit from the sale of the house would have to be paid to them as a condition to the removal of the claim on the house deeds. This is the premise that we have been working on whilst waiting for them to agree to remove the charge and my solicitor also requested the issue of my closure certificate at the same time as the whole exchange on the house sale.
Obviously, the issue of my certificate, prior to the exchange of contracts, was a bit of a shock. I had to login to a docslink account to view it and I downloaded a copy to send to my solicitor. The following day, I logged into the account again & the certificate file had been removed! Being a bit jittery about that, I then emailed the IVA company to ask why it had been removed (thinking the obvious, in that they had maybe realised that they had possibly made a mistake in issuing it prematurely and without the inclusion of the house sale profit) and today I received a response from them with the identical certificate attached to the email, which went on to congratulate me for completing my IVA agreement!

Do you at all think that any of this could be an issue moving forward?
In other words, would you think that the IVA company could still legally refuse to agree to removal of the charge or possibly take me to court in order to claim any monies, in retrospect that an agreement to the house sale was made during the period that followed my final payment & up until when the certificate was actually issued, therefore being subject to the windfall clause?
I know it's a bit of a long shot and a quite convoluted question (I hope you can understand what I'm trying to ask!?), but I just didn't want to instruct my solicitor to go ahead and refuse to pay any monies to them if they still insisted, but citing the fact that my closure certificate had now been issued without any inclusion of the aforementioned profits from the house sale.
I suppose what I'm really asking is, Are the IVA company allowed to deny or withhold the removal of the condition on the deeds until I pay them any monies from the house sale?
There is mention on the closure certificate that monies can still be paid to my creditors even though the certificate has been issued. But it doesn't specify anything to do with this particular situation itself. Just a generic statement.
Maybe I should instruct her to wait a short while to see if the charge is removed as a matter of course?

Sorry to be such a pain! I must sound like a really paranoid lunatic!!
It's just that this past year has been a real strain on my mental health and I've been very depressed with my mum's deteriorating dementia, the house clearance and the sale itself, along with this added pressure with the IVA issue.

I do REALLY thank you from the bottom of my heart for your support.
Stu

You have it in writing and your completion certificate- they cannot change their minds again and the restriction should be lifted immediately for you so the sale can proceed.

Onwards and upwards as they say !

Check with the Land Registry to make sure the restriction has been removed and also keep checking with the Insolvency Register to make sure your name has been removed from there. It can take up to 3 months for that to happen.

With regards to the windfall clause and timing: Assuming that you are in England or Wales the conveyancing process for selling property is not legally enforceable until 'exchange of contracts' -- until that takes place everything is hypothetical. The transaction does not legally exist and you have no money from the sale to call yours. In my mind (Bearing in mind that I am not professionally qualified and this is merely opinion) if exchange and subsequent completion occurs after the date of the completion certificate, it is outside of the arrangement.

Regarding payment of monies into the arrangement post formal completion: An IVA sets up a trust for this purpose (sometimes called a Gallagher Trust after the case this was ruled on a few years ago and recently re-ratified in the courts in the Wright case). An IP will utilise this trust to accept and distribute monies due to be paid in after formal completion of the arrangement --- this usually applies, these days, to PPI and the like, but is limited to monies that would have been due during the term of the IVA, had they been known about at the time. Going forward this could cover, as well as those PPI refunds, the house sale, if it had occurred before the formal completion, Great Aunt Maud popping off during your IVA and leaving you her prized Picasso, which you have only just found out about, or that multi-million winning lottery ticket lurking in the bottom of the laundry basket for a pre-completion date draw !

Thank you SO very much again for your wise words Foggy!
You have soothed my mind and I am now happy that I have all the info I need moving forward.
Thanks again
Stu