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Repossession: Creditor’s charging orders take priority over a wife’s Home Rights

09 February 2015

In Fred Perry (Holdings) Ltd –v- Genis and another (“Genis”) the High Court gave priority to a commercial creditor’s charging orders over a wife’s registered home rights and made an order for the sale of the defendant’s home.The order for sale was needed to satisfy a judgment debt obtained by the Claimant following judgment against Mr Genis for selling counterfeit “Fred Perry” goods.

Mrs Genis contributed £100,000 to the purchase price of the property although the property was registered in the sole name of Mr Genis. Mrs Genis also paid the monthly instalments of the first mortgage secured on the property and registered her home rights under Section 30 of the FLA 1996. The Claimant applied for an order for sale of the property and to terminate Mrs Genis’ home rights.

The Court gave priority to the Claimant’s interests and made an order for sale of the property which would be deferred for 12 months, when Mrs Genis’ home rights terminated. The court considered it just and reasonable to terminate Mrs Genis’ home rights because giving Mrs Genis’ home rights priority over the creditor’s interests would create an anomaly which could not be justified.

Comment

A commercial creditor’s interests will usually be given priority over a family occupation of a property. Lenders should be aware that the registration of home rights is not certain to defeat the interests of a commercial creditor. Lenders should also be aware that applications for orders for sale should not be dismissed for the reasons that a home rights notice has been registered.

Wendy Miles