Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By Belly-Up
#1595 Does anyone know how Occupational Rent is calculated and how do I find out what it would be for the area I live in and for the period that I have been belly up for?
ByDavidc
#1604
Belly-Up wrote:Does anyone know how Occupational Rent is calculated and how do I find out what it would be for the area I live in and for the period that I have been belly up for?


I do not understand why you need this but:

Occupational Rent
This is negotiated between yourself and the seller and is the monthly rent you, the buyer, would need to pay the seller if you take occupation of the property before formal transfer of ownership title has taken place at the Deeds Office. Remember that it will be paid before you move in. If transfer of the property takes place before you, as the buyer, move into the property, then the seller will need to pay you occupational rent. The amount of the occupational rent is usually included in the Offer to Purchase document and is pre-agreed between the buyer and the seller.
By Belly-Up
#1605 My question is related to proprietary interest in a property.

It is my understanding that contributions made to a mortgage post bankruptcy will not ordinarily give rise to an additional proprietary interest, since such payments are offset against the occupational rent that a trustee could otherwise charge for allowing a bankrupt and his wife to remain in occupation.

In order to determine the correct proprietary interest position, if mortgage payments are "offsett" against the occupational rent, it will be necessary to know how much the occupational rent should have been while the mortgage payments were being made.
ByDavidc
#1606
Belly-Up wrote:My question is related to proprietary interest in a property.

It is my understanding that contributions made to a mortgage post bankruptcy will not ordinarily give rise to an additional proprietary interest, since such payments are offset against the occupational rent that a trustee could otherwise charge for allowing a bankrupt and his wife to remain in occupation.

In order to determine the correct proprietary interest position, if mortgage payments are "offsett" against the occupational rent, it will be necessary to know how much the occupational rent should have been while the mortgage payments were being made.


:shock:
By Belly-Up
#1608 Not sure what your shock is about due to lack of words in your response. But to expand and refer to case law:

When calculating the bankrupt’s entitlement, the Trustee should consider the following:
“A resulting, implied or constructive trust – and it is unnecessary for the present purposes to distinguish between these classes of trust – is created by a transaction between the Trustee and the Cestui que Trust in connection with the acquisition by the Trustee of a legal interest in land, whenever the Trustee has so conducted himself it will be inequitable to allow him to deny to the Cestui que Trust a beneficial interest in the land acquired and he will be held so to have conducted himself if by his words or conduct he has induced the Cestui que Trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land”.
Was any agreement reached between the parties prior to, or as at, the date of purchase of a property (e.g.: declaration of trust – which may be evidenced by a property being held as tenants in common).
What contributions did the parties make towards the purchase price (e.g. deposit).
Direct contributions towards the purchase price are indicative of an interest in land, notwithstanding in whose name a property is registered.
If the non-bankrupt spouse did not make any direct contributions towards the purchase price, have any payments been made towards the mortgage or upkeep of the property.

Contributions made to a mortgage post bankruptcy will not ordinarily give rise to an additional proprietary interest, since such payments are offset against the occupational rent that a trustee could otherwise charge for allowing a bankrupt and his wife to remain in occupation.

In my situation the property was in my name but my spouse has made payment to the purchase price via joint bank account and substantial contributions to the mortgage after bankruptcy was declared. So to determine the extent of the beneficial inerest of the equity that the trustee can't take I need to understand how the occupational rent is actually calculated for there is just a chance that possibly more than 50% of the equity can be saved from the trustee. "Not ordinarily" does not mean never. :wink:
User avatar
By Nicky
#1609 Gosh, my brain is bursting! :D

Ok, let me get this straight. You are Bankrupt, or about to be. You have a property that is in your name, however your partner has been making contributions to the rent/mortgage, so has an interest in the equity in the property? You are wondering, if it would be possible that your partner's interest in the property may be more than 50% of the property, but in order to find this out, you are looking for what is taken into account on behalf of your partner (who you refer to when mentioning "Occupational rent")?

I'll ask if this is what you are asking before attempting to make an answer - infact, you would probably get the best answer from an Insolvency Practitioner who you can talk to without giving any personal details.

I think it may be a Friday thing :wink:
ByDavidc
#1610
Nicky wrote:Gosh, my brain is bursting! :D



Nearly made my eyes pop out :)
David
User avatar
By Nicky
#1613 LOL
By Belly-Up
#1615
Nicky wrote:Gosh, my brain is bursting! :D

Ok, let me get this straight. You are Bankrupt, or about to be. You have a property that is in your name, however your partner has been making contributions to the rent/mortgage, so has an interest in the equity in the property? You are wondering, if it would be possible that your partner's interest in the property may be more than 50% of the property, but in order to find this out, you are looking for what is taken into account on behalf of your partner (who you refer to when mentioning "Occupational rent")?

I'll ask if this is what you are asking before attempting to make an answer - infact, you would probably get the best answer from an Insolvency Practitioner who you can talk to without giving any personal details.

I think it may be a Friday thing :wink:


This is a bankruptcy forum isn't it? :?

Yes I am bankrupt and my house was just in my name. I was adjudged bankrupt pre Enterprise Act. I am quite happy that it will be found that my wife has a beneficial interest in the property. The only question is how much. The bottom line being that the more she gets the less the Trustee gets and the more we are left with to start a new life.

The deposit being paid from a joint account and provable payments from her own bank account against her own provable savings and income should take the beneficial interest percentage to 50%. But in order for it to go above that magical figure (or to determine if it is worth fighting for) I need to know the answer to my original question.
"How is Occupational Rent calculated and how do I find out what it would be for the area I live in and for the period that I have been belly up for?"

I ask this question because of the judgement texts from the Gorman, Pavlou and Byford cases which basically say that contributions made to a mortgage post bankruptcy will not ordinarily give rise to an additional proprietary interest, since such payments are offset against the occupational rent that a trustee could otherwise charge for allowing a bankrupt and his wife to remain in occupation.

So I know what occupational rent is and why it is made but I just don't know how it is calculated so that I can challenge the figures when they are presented.

And I thought it was such a simple question :roll: How silly of me :lol:
ByDavidc
#1625
Belly-Up wrote:So I know what occupational rent is and why it is made but I just don't know how it is calculated so that I can challenge the figures when they are presented.

And I thought it was such a simple question :roll: How silly of me :lol:


Don't be so Patronising
FYI . This is not a professional advice site but a forum of people seeking support/advice and sharing information and experiances.
We are not insolvancy practitioners or experts....and nothing we can offer you could be considered as more than that.
There is an "ask the expert" site associated to this forum hosted by Simon Wiggins where I suggest you post your enquiry. He has the profesional expertice and knowledge we lack to answer your question.

http://www.debtquestions.co.uk/forum/index.php3
By Belly-Up
#1626 Davidc.
Sorry if you thought I was being patronising. My original post was made in good faith and forums normally have a few experts or people that know due to prior experience. Incedentally David, I was not the one who posted a response with just an emoticon or saying I nearly made your eyes pop out which I felt somewhat patronising.

I have genuinely tried in each post I have made on this thread to clarify responses made (including your own first response) to ensure that I don't waste peoples time answering what I already know.

Until I started my research in an attempt to save my house equity, I had no idea about Rossett, Gorman, Pavlou, Citro, etc. Right now I am trying to find out about occupational rent.

Occupational rent is something that is of interest to all bankrupts who owned a home and have attempted to continue living in it post bankruptcy. Particularly for people made bankrupt pre Enterprise Act where property may have been in negative equity and their Trustee's are now trying apply for orders for sale due to the increase in property prices since declaration of bankruptcy and the need to comply with the implications of the Enterprise Act.

If I do not manage to obtain the info I want from somone who views this thread and I manage to obtain it from elsewhere I will post the answer here anyway so that anyone else in the same situation can see the answer.

So to restate my origial question in the hope that someone who views this thread knows the answer:

Does anyone know how Occupational Rent is calculated and how do I find out what it would be for the area I live in and for the period that I have been belly up for?
ByDavidc
#1627
Belly-Up wrote:Davidc.
Sorry if you thought I was being patronising. My original post was made in good faith and forums normally have a few experts or people that know due to prior experience. Incedentally David, I was not the one who posted a response with just an emoticon or saying I nearly made your eyes pop out which I felt somewhat patronising.

I have genuinely tried in each post I have made on this thread to clarify responses made (including your own first response) to ensure that I don't waste peoples time answering what I already know.

Until I started my research in an attempt to save my house equity, I had no idea about Rossett, Gorman, Pavlou, Citro, etc. Right now I am trying to find out about occupational rent.

Occupational rent is something that is of interest to all bankrupts who owned a home and have attempted to continue living in it post bankruptcy. Particularly for people made bankrupt pre Enterprise Act where property may have been in negative equity and their Trustee's are now trying apply for orders for sale due to the increase in property prices since declaration of bankruptcy and the need to comply with the implications of the Enterprise Act.

If I do not manage to obtain the info I want from somone who views this thread and I manage to obtain it from elsewhere I will post the answer here anyway so that anyone else in the same situation can see the answer.

So to restate my origial question in the hope that someone who views this thread knows the answer:

Does anyone know how Occupational Rent is calculated and how do I find out what it would be for the area I live in and for the period that I have been belly up for?


I have provided you with the link at the bottom of my previous post to the "Ask an Expert" site . Ask Simon and I have no doubt he will be able to help you...or point you in the direction to go.
David
User avatar
By JaneClack
#1631 Yes, Simon should be able to help but you could think about how much each of you pay towards the mortgage and how long you have done so - this is the kind of question you will be asked. If she pays half and paid half the deposit it will be 50%. If she pays more - look at your relevant incomes over the period - then she will have more but you will need to prove it.
As it was a pre-Enterprise Act bankruptcy and there was negative equity in the property when you went bankrupt, it is one of the ones the Protracted Realisations Unit is dealing with now as they have to have done something by 31st March 2007.
The Official Receiver will now be looking to get back his fees as well as any other monies etc which could be quite large. You really do need to get some professional advice here as you are one of many people in this boat but I do not think there is any way that you will find your partner has more than 50% of the equity.
Occupational rent - go to your local newspaper and see what the rents are for comparable properties in the area but I do not really think you will have much joy moving up from the figure of 50% and may even have problems getting to that figure.
By Belly-Up
#1646 Thanks Sarah.
Unfortunately Simon can't help on this one. I took the advice of Davidc and posted on the Ask the Expert but Simon deleted it and sent me a reply by e-mail saying he couldn't help. Shame cbecause he is a top bloke and has been a big help on another question I asked.

The idea of checking the newspapers is a good one and I'll compile a month by month comparitive rent to mortgage spreadsheet for the bankruptcy period (library here I come).

I have a feeling that the calculation will be a bit more complex in the end but it will be good to have the proof of what rents actually were. Bearing in mind that my wife was making the mortgage payment, I have the feeling that half of the occupational rent will be deducted from her mortgage payment each month but I am only guessing and really wish I knew the actual calculation.
User avatar
By Nicky
#1649 Bankruptcy, The Matrimonial Home

I don't know if that link will be of any use to you at all.

I asked the question regarding how Occupational Rent is calculated with someone who is in the know, it sounds like, whatever way you might approach it, you will have a bit of a battle on your hands. I was told: -

Occupational rent is officially calculated by reference to what similar properties in the area are being rented out for, in practice however it is balanced off against the interest element of the mortgage payments.

If you are both still living in the property, you both have enjoyment of the property, so your partner might have a beneficial interest in the property and would be better fighting on that ground, she would need a good insolvency solicitor.

The calculation depends on alot of factors. When the property was bought, why is it in your sole name only, your intentions at the time. It will also depend on how you held the property out to creditors in the past. Considering your partner was not named on the mortgage she could be lucky to get away with 50%. It could even be less. It is unlikely she will get away with more than 50%.

At the end of the day, it will all be down to the judge it goes before if you want to fight it. You should be aware however, that if you fight it and loose, it will cost your partner alot of money.

I hope that makes sense to you.