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gratis
25-04-2005, 06:56 PM
Just wondering what the rights of an indiviual owner under tenants in
common are in QLD
The situation is that one of the owners has stopped making mortgage payments
while the other has continued
When the areas reach three monthe the mortgagee has the right oof posession
and sale
What recourse does the compling owner have aside from making up the
defaulting partners contribution
If the mortgagee exercises power of sale can the other tennat purchase the
mrotgage off the current mortgagee or does the property have to go on the
market?

The defaulting party also has other judgements against him.
What about other creditors ?

Heretic
25-04-2005, 06:56 PM
On Wed, 30 Mar 2005 09:41:50 +1000, gratis wrote:

> Just wondering what the rights of an indiviual owner under tenants in
> common are in QLD
> The situation is that one of the owners has stopped making mortgage
> payments while the other has continued
> When the areas reach three monthe the mortgagee has the right oof
> posession and sale
> What recourse does the compling owner have aside from making up the
> defaulting partners contribution
> If the mortgagee exercises power of sale can the other tennat purchase
> the mrotgage off the current mortgagee or does the property have to go on
> the market?
>
> The defaulting party also has other judgements against him. What about
> other creditors ?

You might consider a sale by the defaulting co-owner to you of their net
share in the property, so that you own both shares and take over their
responsibility under the mortgage. The sale should be genuine and be at
arm's length so that the risk of the sale being undone in the advent of
bankruptcy is reduced.

Alternatively, a meeting of creditors, including the mortgagee, might be
considered to deal with both the mortgaged property and the other debts.

Peter
25-04-2005, 06:56 PM
On Wed, 30 Mar 2005 09:41:50 +1000, "gratis" <abhall98@hotmail.com>
wrote:

>Just wondering what the rights of an indiviual owner under tenants in
>common are in QLD
>The situation is that one of the owners has stopped making mortgage payments
>while the other has continued
>When the areas reach three monthe the mortgagee has the right oof posession
>and sale
>What recourse does the compling owner have aside from making up the
>defaulting partners contribution
>If the mortgagee exercises power of sale can the other tennat purchase the
>mrotgage off the current mortgagee or does the property have to go on the
>market?
>
>The defaulting party also has other judgements against him.
>What about other creditors ?
>
There is generally nothing to stop a mortgagee selling the loan to
some one else, eg to you and the other non-defaulting tenants. The
mortgagee would most probably be delighted to sell it in this instance
and that would include the outstanding interest debt which remains
payable by the defaulter. This would most probably be permissible
right up to the time that the hammer falls to sell the property.

Tony Smith
25-04-2005, 06:56 PM
> On Wed, 30 Mar 2005 09:41:50 +1000, "gratis" <abhall98@hotmail.com>
> wrote:


Before answering (parts) of your question I must point out that in
order to protect your rights you need to undertake a series of actions
NOW. Getting yourself to someone who can both provide advice and act
for you would seem to be an urgent first step.


> > Just wondering what the rights of an indiviual owner under tenants
> > in common are in QLD

Not sure where to start, but honing in on your circumstances, a good
place to start would seem to be S.57 of the Land Title Act 1994.

57 Separate indefeasible titles for tenants in common

(1) If a lot is, or is to be held, by 2 or more registered owners as
tenants in common, the registrar may create a separate indefeasible
title for the interest of each owner by including a separate set of
particulars in the freehold land register for the interest of each
owner.

(2) The registrar may act under this section at the request of an owner.


Of course, this is really only going to be of use to you if being the
ongoing owner of 1/2 the total parcel is what you want to do.

Your choices are:-

Investigate what can be done to encourage or "force" the joint tennant
to keep up their obligations in respect of the mortgage.

Try and take over the whole of the property, bearing in mind that if
the joint tennant doesn't willingly participate in the process it can
be a bit fraught.

Sell your share to someone else and walk away.

> > The situation is that one of the owners has stopped making mortgage
> > payments while the other has continued
> > When the areas reach three monthe the mortgagee has the right oof
> > posession and sale

The first thing I'd be doing is talking to the mortgagee and explaining
the situation and what *you* propose to try and do about it. This may
or may not gain you some "wriggle room", but it is worth doing.

> > What recourse does the compling owner have aside from making up the
> > defaulting partners contribution

Again depending on what you want to do, there are a number of things
you can try or do, you need to be a bit more specific on what you want.

BTW, is there any form of written agreement that outlines each
joint-tennant's responsibility in respect to the mortgage payments? Is
th eother party able to pay and choosing not to? If so, why?

> > If the mortgagee exercises power of sale can the other tennat
> > purchase the mrotgage off the current mortgagee or does the
> > property have to go on the market?

Generally the mortgagee will have to make the property available to
public auction and is not able to simply sell to another "interested"
party, there will be advertising costs, charges etc.

If you wish to be sole owner, there is another path which I'll get to
shortly.

> >
> > The defaulting party also has other judgements against him.
> > What about other creditors ?
> >

Depends. If they have a registered interest in the property, the only
way to get rid of them is to pay them out. If they do not, then they
are your co-tennants problem for the moment.


The easiest solution to the frequently arising problem of tennats in
common who for whatever reason no longer wish to be co-tennants is for
one of the tennants to sell their interest to the other party, or to
someone else.

If they are unwilling to do that then you go (in QLD) to the Property
Law Act for assistance. From memory S.38 is about right for the lead in
on the Statutory trust for sale or partition stuff.

you will need to get an order of the court to make this happen, but you
can get, in the absence of a co-operative co-tennant, an order for
partition, or an order for the property to be sold. You of course would
be free to bid at such a sale (bearing in mind that I think in certain
circumstances the court can order a sale to a specific party at a
specific price and not go the public auction route at all) and the
costs overall would be likely lower than waiting for a mortgagee to go
through their own process to reach a similar end point.


Anyway, have a look at http://www.legislation.qld.gov.au I do strongly
recommend you talk to a practicioner and make decisions then.


Tony Smith

Heretic
25-04-2005, 06:56 PM
On Wed, 30 Mar 2005 11:38:35 +0000, Tony Smith wrote:

>
>> On Wed, 30 Mar 2005 09:41:50 +1000, "gratis" <abhall98@hotmail.com>
>> wrote:
>
>
> Before answering (parts) of your question I must point out that in order
> to protect your rights you need to undertake a series of actions NOW.
> Getting yourself to someone who can both provide advice and act for you
> would seem to be an urgent first step.
>
>
>> > Just wondering what the rights of an indiviual owner under tenants in
>> > common are in QLD
>
> Not sure where to start, but honing in on your circumstances, a good place
> to start would seem to be S.57 of the Land Title Act 1994.
>
> 57 Separate indefeasible titles for tenants in common
>
> (1) If a lot is, or is to be held, by 2 or more registered owners as
> tenants in common, the registrar may create a separate indefeasible title
> for the interest of each owner by including a separate set of particulars
> in the freehold land register for the interest of each owner.
>
> (2) The registrar may act under this section at the request of an owner.
>
>
> Of course, this is really only going to be of use to you if being the
> ongoing owner of 1/2 the total parcel is what you want to do.
>
> Your choices are:-
>
> Investigate what can be done to encourage or "force" the joint tennant to
> keep up their obligations in respect of the mortgage.
>
> Try and take over the whole of the property, bearing in mind that if the
> joint tennant doesn't willingly participate in the process it can be a bit
> fraught.
>
> Sell your share to someone else and walk away.
>
>> > The situation is that one of the owners has stopped making mortgage
>> > payments while the other has continued When the areas reach three
>> > monthe the mortgagee has the right oof posession and sale
>
> The first thing I'd be doing is talking to the mortgagee and explaining
> the situation and what *you* propose to try and do about it. This may or
> may not gain you some "wriggle room", but it is worth doing.
>
>> > What recourse does the compling owner have aside from making up the
>> > defaulting partners contribution
>
> Again depending on what you want to do, there are a number of things you
> can try or do, you need to be a bit more specific on what you want.
>
> BTW, is there any form of written agreement that outlines each
> joint-tennant's responsibility in respect to the mortgage payments? Is th
> eother party able to pay and choosing not to? If so, why?
>
>> > If the mortgagee exercises power of sale can the other tennat
>> > purchase the mrotgage off the current mortgagee or does the property
>> > have to go on the market?
>
> Generally the mortgagee will have to make the property available to public
> auction and is not able to simply sell to another "interested" party,
> there will be advertising costs, charges etc.
>
> If you wish to be sole owner, there is another path which I'll get to
> shortly.
>
>
>> > The defaulting party also has other judgements against him. What about
>> > other creditors ?
>> >
>> >
> Depends. If they have a registered interest in the property, the only way
> to get rid of them is to pay them out. If they do not, then they are your
> co-tennants problem for the moment.
>
>
> The easiest solution to the frequently arising problem of tennats in
> common who for whatever reason no longer wish to be co-tennants is for one
> of the tennants to sell their interest to the other party, or to someone
> else.
>
> If they are unwilling to do that then you go (in QLD) to the Property Law
> Act for assistance. From memory S.38 is about right for the lead in on the
> Statutory trust for sale or partition stuff.
>
> you will need to get an order of the court to make this happen, but you
> can get, in the absence of a co-operative co-tennant, an order for
> partition, or an order for the property to be sold. You of course would be
> free to bid at such a sale (bearing in mind that I think in certain
> circumstances the court can order a sale to a specific party at a specific
> price and not go the public auction route at all) and the costs overall
> would be likely lower than waiting for a mortgagee to go through their own
> process to reach a similar end point.
>
>
> Anyway, have a look at http://www.legislation.qld.gov.au I do strongly
> recommend you talk to a practicioner and make decisions then.

This is all well and good, but it is expensive. And it does not deal
with the possible bankruptcy of the defaulting co-tenant with the
implications it has for the mortgagee.

If the defaulting co-tenant is co-operative and reasonable, a meeting of
creditors (if they are co-operative and reasonable) with the land owners
and the mortgagee to attempt to get an agreed is the fastest and cheapest
way to resolve this mess created by the defaulting co-tenant. If that
can't be done, and the lawyers get involved, you can expect money to drain
away for no good purpose, and everyone but the lawyers will be the losers.

Tony Smith
25-04-2005, 06:57 PM
Heretic wrote:

>
> This is all well and good, but it is expensive. And it does not deal
> with the possible bankruptcy of the defaulting co-tenant with the
> implications it has for the mortgagee.
>
Being well aware of the trustee in bankruptcy's powers was why my very
first recommendation was to talk to the holders of registered charges.

I do agree that co-operation from the defaulting common tennant is the
only way that the whole confection isn't going to cost, but then the OP
has to make decisions that may not be entirely based on economics (it
might for example be a block with unique qualities or emotional
significance etc.).

In any event, if the creditors agree to hold off (and there is no
reason they would not as they could very easily arrange for their
interests to be protected at settlement), a statutory order for
partition or sale (preferably a non-public sale) is probably going to
hurt less fnancially than having to pick up the mortgagee's costs on
top of a public sale, along with the risks involved in that process.

Other options that haven't been canvassed, such as partition may also
be viable depending of course on multiple factors that the OP has not
addressed.

Finally.
Whilst the Bankruptcy issue is obviously a possibility, we don;'t yet
know why the other party has stopped paying, whilst prima-facie not
paying the mortgage for 3 months is an apparent "act of bankruptcy" we
do not know the actual resources the person has.




Tony Smith

Heretic
25-04-2005, 06:57 PM
On Wed, 30 Mar 2005 21:32:31 +0000, Tony Smith wrote:

> Heretic wrote:
>
>
>> This is all well and good, but it is expensive. And it does not deal
>> with the possible bankruptcy of the defaulting co-tenant with the
>> implications it has for the mortgagee.
>>
> Being well aware of the trustee in bankruptcy's powers was why my very
> first recommendation was to talk to the holders of registered charges.

Which registered charges?

> I do agree that co-operation from the defaulting common tennant is the
> only way that the whole confection isn't going to cost, but then the OP
> has to make decisions that may not be entirely based on economics (it
> might for example be a block with unique qualities or emotional
> significance etc.).

In Queensland? Come off it!

> In any event, if the creditors agree to hold off (and there is no reason
> they would not as they could very easily arrange for their interests to be
> protected at settlement), a statutory order for partition or sale
> (preferably a non-public sale) is probably going to hurt less fnancially
> than having to pick up the mortgagee's costs on top of a public sale,
> along with the risks involved in that process.

It would be surprising if the morgagee had not dealt with this issue in
the mortgage documents.

> Other options that haven't been canvassed, such as partition may also be
> viable depending of course on multiple factors that the OP has not
> addressed.
>
> Finally.
> Whilst the Bankruptcy issue is obviously a possibility, we don;'t yet
> know why the other party has stopped paying, whilst prima-facie not
> paying the mortgage for 3 months is an apparent "act of bankruptcy" we
> do not know the actual resources the person has.

I was thinking more of the implications of giving a preference to one
creditor over others, if an arrangement was made just between the
co-owners and the motgagee. There may not be any such preference, but it
could be expensive to determine that.

It seems at least possible that the reason that the defaulting co-owner
has stopped paying their share of the mortgage is that they can't pay.

Tony Smith
25-04-2005, 06:57 PM
Heretic wrote:

> >>
> > Being well aware of the trustee in bankruptcy's powers was why my
> > very first recommendation was to talk to the holders of registered
> > charges.
>
> Which registered charges?

Charges that are a registered interest in the land of course.....What
else would you think?


>
> > I do agree that co-operation from the defaulting common tennant is
> > the only way that the whole confection isn't going to cost, but
> > then the OP has to make decisions that may not be entirely based on
> > economics (it might for example be a block with unique qualities or
> > emotional significance etc.).
>
> In Queensland? Come off it!


Ah! A jealous cockroach are we? :-)

>
> > In any event, if the creditors agree to hold off (and there is no
> > reason they would not as they could very easily arrange for their
> > interests to be protected at settlement), a statutory order for
> > partition or sale (preferably a non-public sale) is probably going
> > to hurt less fnancially than having to pick up the mortgagee's
> > costs on top of a public sale, along with the risks involved in
> > that process.
>
> It would be surprising if the morgagee had not dealt with this issue
> in the mortgage documents.

Which part of the word "statutory" is a problem for you? Also the
relevant bit of the PLA excludes the operation of any other law or
argeement. The right to apply for a trustee for sale or partition,
albeit subject to any registered interest in the subject land, cannot
be excluded.


>
>
> I was thinking more of the implications of giving a preference to one
> creditor over others, if an arrangement was made just between the
> co-owners and the motgagee. There may not be any such preference,
> but it could be expensive to determine that.

Any disagrerement between debtor and creditor or between creditors
following the sale of the land, not subject to a registered interest
would not concern the purchaser. What the existing tennant in common
did with the proceeds in relation to paying his/her personal creditors
might very well attract such implications.


On the other hand. If the creditor in question had been smart enough to
register a charge against the land, and they got paid out at settlement
from the proceeds the (and I doubt it's a live one anyway) issue in
relation to unfair preference would be between the debtor, the creditor
that got paid and the other creditors. That's the beauty and power of
the words "indefeasible title".
>
> It seems at least possible that the reason that the defaulting
> co-owner has stopped paying their share of the mortgage is that they
> can't pay.

Having an "off" day are we?



Tony Smith

nemer
25-04-2005, 06:58 PM
Tony Smith wrote:
>>
>>It would be surprising if the morgagee had not dealt with this issue
>>in the mortgage documents.
>
>
> Which part of the word "statutory" is a problem for you? Also the
> relevant bit of the PLA excludes the operation of any other law or
> argeement. The right to apply for a trustee for sale or partition,
> albeit subject to any registered interest in the subject land, cannot
> be excluded.
>
Although in theory it is possible to mortgage your portion of a tenancy
in common it simply never happens in practice.

Banks will just not accept a mortgage of a share of a tenancy in common.

Before a bank will advance money it will insist on all tenants in common
being parties to the mortgage. Even if one tenant in common agrees with
other tenant in common that he will make all repayments.

Banks are acutely aware of the potential traps with a tenancy in common
and they obtain a mortgage from all owners to avoid this exact
situation. Thus if both tenants in common are parties to the mortgage
then both are in default.

The bank doesnt need to deal with this situation in the mortgage
documents once both are mortgagors. And a separation will not have any
practical effect as both mortgagors are still in default under same
mortgage. There is no splitting of the mortgage obviously.

You cant beat the banks.

Tony Smith
25-04-2005, 06:58 PM
nemer wrote:

> Tony Smith wrote:
> > >
> > > It would be surprising if the morgagee had not dealt with this
> > > issue in the mortgage documents.
> >
> >
> > Which part of the word "statutory" is a problem for you? Also the
> > relevant bit of the PLA excludes the operation of any other law or
> > argeement. The right to apply for a trustee for sale or partition,
> > albeit subject to any registered interest in the subject land,
> > cannot be excluded.
> >
> Although in theory it is possible to mortgage your portion of a
> tenancy in common it simply never happens in practice.

I don't think there is, or has been, any suggestion that such
arrangements exist in this case, but thank you for succinctly covering
it anyway.
>

Tony Smith

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