Sequestration

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  • #22200
    lesleyb
    Participant

    We have a landlord who has been sequestrated. He has one tenant and HB is paid direct to the landlord 4-weekly by cheque.

    We have received a letter from accountants appointed by the court requesting his HB cheque be sent to them.

    Do we continue to raise a cheque in the landlord’s name, then cancel it and re-issue to accountants or would it be better to raise the cheque in the accountants name. Would there be any problems regarding overpayments?

    #7079
    peterdelamothe
    Keymaster

    I had to look this up – “A Sequestration is a Scottish legal term for personal bankruptcy where you are formally declared Bankrupt by the Court”. Possibly why you did not get many responses!

    We had a recent note about claimant bankruptcy from DWP following a C decision but I do not think it covered landlords.

    My first thought would be to consider if the HB should now be paid to the tenant for THEM to pay to the administrator. Even if the arears are more than 8 weeks I would still consider this a possibility in the circumstances.

    If you decide to still pay the landlord then you must pay the Court appointee provided the latter have the legal right to demand the monies. I see no reason why you cannot merely send them a cheque and the documentation should make it clear what this is for. The landlord has no rights here.

    BUT getting any overpayment back is always going to be tricky. You canot make the Court or their rep liable to refund any future debts owed by the claimant. The legal system just doesnt work like that!

    Also be careful that you know if/when the property is sold. If you have continued to pay HB it will not be the customers fault.

    Thirdly, draw up a clear letter to the accountant setting out what the conditions of receipt of HB are. The HB is for RENT only and not their expenses or fees! Here speaketh someone with experience with similar cases.

    #7080
    lesleyb
    Participant

    Thanks for your response Peter. I hadn’t realised ‘sequestration’ was only used ‘up here’.

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