Enforcement action: taking control of goods (TCoG): events after taking control of goods
Time to pay arrangements
At any time in this process, you should be prepared to discuss payment options or arrangements and be aware that you may enter into a time to pay (TTP) agreement up to the date of sale. Any TTP negotiations should include any fees payable up to the point of the agreement (any fees must be cleared first before any head of duty debts) and you should follow national TTP guidance.
If a TTP agreement is breached, then enforcement (of the amount of debt covered by the Notice of Enforcement) can continue from the point that enforcement was suspended. You can recommence the enforcement action from the date of the TTP breach (the due date of the instalment payment that was missed) up to a maximum of 12 months from the date of the TTP breach. Where the next action would be to remove goods already held under a Controlled Goods Agreement, before attending to remove the goods, you must first ensure that a ‘Notice of intention to re-enter premises’ is served on the debtor.
Allocation of payments and proceeds from sale of goods
Any proceeds from the sale of goods (and any payments received from the debtor as a result of the enforcement action) must be allocated in the following order.
- The co-owner must be paid a share of the proceeds of those goods proportionate to his interest.
- Payment of the auctioneer’s costs.
- The £75 compliance fee.
- Any remaining amounts recoverable in respect of fees and disbursements payable in accordance with the fee regulations.
- The principal sum to be recovered.
Where the payment has been allocated:
- you should ensure that the fees have been cleared and then arrange to reallocate any overpayment to the head of duty charge
- to the head of duty debt, you should consider if a reallocation is necessary; if the payment was received:
- prior to the issue of the Notice of Enforcement, the payment should be left on the head of duty debt and the fees should be vacated
- after the issue of the Notice of Enforcement, you should reallocate to clear the fees and pursue any outstanding head of duty balance.
If a debtor objects to you allocating their payment to cover the fees in preference to the principal debt, you should:
- advise them that we are legally obliged to allocate to clear the fees first
- if necessary, refer them to Regulation 13(5) of The Taking Control of Goods (Fees) Regulations 2014).
Do not agree to reallocate any monies to the head of duty debt in priority to the fee unless the payment was received prior to the issue of the Notice of Enforcement.
Challenges following taking control of goods
Actions may be challenged at any time in the process. These will often involve a third party claiming full title to the seized goods, but challenges may be received from co-owners.
Treat all claims of title to the goods from third parties as with distraint. These will include financial claims such as:
- retention of title
- hire purchase
- lease purchase
- bills of sale
where the third party will claim exclusive title to the goods. Treat each case based on the evidence provided.
Where the claimant has co-ownership, or joint ownership of the seized goods, he or she has a genuine claim but only to the extent or proportion of their interest in the goods. Remember that the new regulations allow an enforcement agent to remove and sell co-owned goods.
Abandonment of goods after immobilisation or removal
There are specific rules surrounding the abandonment of goods which are made available for collection by the debtor; however, this action is appropriate to the auctioneer so is not covered in this manual.
Insolvency after taking control of goods action commenced
Advice received from our solicitors and counsel indicates that the precedents set under distraint can still be applied under TCoG. Please therefore continue to maintain our stance on insolvency issues. Please remember that TCoG action commences with the issue of the Notice of Enforcement as this notice ‘binds’ the debtors goods.
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