Enforced sale - right of entry, date of possession and capital management

Hello - hopefully someone will have an answer to these questions - or be able to confirm my statements! Our legal team are being very nervy about this!

Right of entry - I believe that once we have registered our charge with the Land Registry we can gain entry as of right (we are going to contact the owners one last time as recommended by most procedures). As the property is empty we don't have to get a court order, warrant etc.

We are only 'responsible' for the property once we become mortgagee in possession and we only become in possession once we have entered (or maybe physically received the keys from the owner? - unlikely but you never know). From this point on we need to insure the property, keep it secure etc.

Funds - if the owner doesn't accept the proceeds of the sale (there is a mortgage in this case but there should be a small amount left over), we would have to pay the owner at such point as they do accept the proceeds plus interest. I am advised that the Council can't set up an interest bearing account - how have other Councils dealt with this? Just 'found' the money at such point as they have to pay it out (I know interest rates are v v low at present but its still a relevant question)?

Any comments gratefully received!

Martin Cooke - Nottingham City Council martin.cooke@nottinghamcity.gov.uk


Enforced Sale

Hi Martin

You are correct in regard to the first three paragraphs

Have a look at my previous post that covers the first element of your question and the points made remains current and valid

Powers of entry for enforced sale S103 | Empty Homes Network (ehnetwork.org.uk)

The post identifies a number of approaches that can be taken. There is some risk with taking posession but this can be limited to about 4-6 weeks based on taking possession as late as possible ie undertaking viewings within two weeks of the auction date.

To be honest since Covid alot of the auctioneers sell without allowing internal viewings and just make a video clip of the internal.  This approach does not seem to have discourage people buying at auction or reducing overall prices acheived.

You have not specified the legislation used to create the charge, but I have assumed that the charge takes priority over any mortgage (Ie not Section 215 or Section 29 LG (MP) Act 1982.

As long as you have used the appropriate legislation,  your statutory charge, plus any interest outstanding, legal costs  and auctioneer costs will be in priority to the existing lender.

Anything else can be paid to the Mortgage Company and it becomes their problem to deal with any excess funds.

Alternatively, you can ask for a redemption statement from the lender based on a completion date (usually 28 days after the auction), assuming it sells.

You could pay them from the sale proceeds and any excess is held by the LA.

Your Solicitors will need to be satisfied that any excess funds are paid to the correct person  (Owner). I would normally ask the owner to provide a photo ID (passport), a current utility bill and possibly a bank statement showing which account he / she wants the funds to be paid into.

If I get no response and it is reasonable to do so. I would normally try and door step the owner to get a response, as opposed to just deal with it by written letter.

Usually, they will work with you in this regard, although may be a bit frosty after you have sold their property.

In legal terms you must hold the proceeds from the sale in perpetuity by virtue of Section 105 Law and Property Act 1925 - acting as Trustee.

The Limitation  Act 1980 does not apply in such circumstances.

You do have the ability to pay any  excess monies from the sale into Court, by virtue of  Section 63 Trustee Act 1925

However, these things usually have a habit of solving themselves.

Hope that helps.


Andrew Lavender

Housing Tranining and Consultancy Ltd

This information is for general guidance only and you should ensure that you seek your own independent legal advice.

Thanks Andrew! We're ok with the legislation - its mainly PDPA.

Martin Cooke, Nottm City Empty Homes