Q&As

Where a trustee in bankruptcy obtains a possession and sale order in respect of a jointly-owned property, and the order appoints the trustee in the non-bankrupt co-owner’s place under section 41 of the Trustee Act 1925 to execute all necessary deeds, documents and instruments relating to a sale of that property, do the bankrupt and the co-owner need to be parties to the sale contract and can the trustee execute the transfer deed on their behalf?

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Produced in partnership with XXIV Old Buildings
Published on LexisPSL on 26/06/2019

The following Restructuring & Insolvency Q&A produced in partnership with XXIV Old Buildings provides comprehensive and up to date legal information covering:

  • Where a trustee in bankruptcy obtains a possession and sale order in respect of a jointly-owned property, and the order appoints the trustee in the non-bankrupt co-owner’s place under section 41 of the Trustee Act 1925 to execute all necessary deeds, documents and instruments relating to a sale of that property, do the bankrupt and the co-owner need to be parties to the sale contract and can the trustee execute the transfer deed on their behalf?

Where a trustee in bankruptcy obtains a possession and sale order in respect of a jointly-owned property, and the order appoints the trustee in the non-bankrupt co-owner’s place under section 41 of the Trustee Act 1925 to execute all necessary deeds, documents and instruments relating to a sale of that property, do the bankrupt and the co-owner need to be parties to the sale contract and can the trustee execute the transfer deed on their behalf?

Where a real property is jointly owned and one of the joint owners is made bankrupt, the bankrupt’s beneficial interest under the trust vests in the trustee in bankruptcy, but the legal estate remains vested in the bankrupt and the non-bankrupt joint owner (see section 283(3)(a) of the Insolvency Act 1986, Re McCarthy and Re Amin; Abdulla v Whelan). See also Practice Note: Property that vests in the trustee in bankruptcy on bankruptcy and how the trustee in bankruptcy ascertains the extent of their interest in it. Bankruptcy is a ground for replacing a person as trustee under section 41(1) of the Trustee Act 1925. It is not necessary to replace the non-bankrupt co-owner who would remain a trustee with the trustee in bankruptcy. The question here presupposes that the trustee in bankruptcy has replaced the non-bankrupt co-owner as well, so that the trustee in bankruptcy is the sole

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