Q&As

Can a buyer rely on the Insolvency Act 1994 where the seller of the property was a party to a transaction at an undervalue when the property was transferred from joint names of the seller, X, and Y, into names of the seller and X?

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Published on LexisPSL on 10/01/2019

The following Property Q&A provides comprehensive and up to date legal information covering:

  • Can a buyer rely on the Insolvency Act 1994 where the seller of the property was a party to a transaction at an undervalue when the property was transferred from joint names of the seller, X, and Y, into names of the seller and X?
  • Transactions at an undervalue
  • Transactions defrauding creditors

For the purpose of answering this Q&A, it is assumed that the sellers, X and Y are all individuals, and that none of them are corporate entities.

Transactions at an undervalue

Where an individual is adjudged bankrupt, their trustee in bankruptcy (trustee) can seek to challenge any transaction entered into by that individual in the five-year period prior to the presentation of the bankruptcy petition or making of the bankruptcy application for which the individual receives no or insufficient consideration—see sections 339 and 341 of the Insolvency Act 1986 (IA 1986). Other conditions also apply. For further reading, see Practice Note: Unwinding unlawful transaction

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