Insolvency Act 1986 s.313A – Low value home: application for sale, possession or charge

(1)This section applies where—

(a)property comprised in the bankrupt’s estate consists of an interest in a dwelling-house which at the date of the bankruptcy was the sole or principal residence of—

(i)the bankrupt,

(ii)the bankrupt’s spouse [^F826 or civil partner^F826] , or

(iii)a former spouse [^F827 or former civil partner^F827] of the bankrupt, and

(b)the trustee applies for an order for the sale of the property, for an order for possession of the property or for an order under section 313 in respect of the property.

(2)The court shall dismiss the application if the value of the interest is below the amount prescribed for the purposes of this subsection.

(3)In determining the value of an interest for the purposes of this section the court shall disregard any matter which it is required to disregard by the order which prescribes the amount for the purposes of subsection (2).^F825]

Cases considering section 313A 3

Lewis & Anor v Metropolitan Property Realisations Ltd

[2009] EWCA Civ 448 · 12 June 2009

The section prevents enforcement against an interest below the prescribed value and requires applications for sale, possession or a charging order to be dismissed. After three years, subsequent increases in value therefore accrue to the bankrupt (see paras [21]-[22]).

Wood v Lowe & Ors

[2016] EWHC 1010 (Ch) · 5 May 2016

The court held that the provision did not apply to The Grange because it was not occupied by the bankrupt as his sole or principal residence at the relevant date. (see paras [49]-[50])

Mekarska v Ruiz & Anor

[2011] EWCA Civ 1646 · 2 December 2011Limits

The court considered the restriction on possession and sale of low-value homes in section 313A but found it irrelevant to the appeal. It also stated that the relevant value concerned the interest in the house rather than the house itself. (see para [27])

What each judgment says about section 313A is in the case-law panel in the full Act.

Amendments and notes

4 notes from legislation.gov.uk

Amendments

F825S. 313A inserted (1.4.2004) by 2002 c. 40, ss. 261(3), 279 (with s. 249(6)); S.I. 2003/2093, art. 2(2), Sch. 2 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))
F826Words in s. 313A(1)(a)(ii) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 115(a); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))
F827Words in s. 313A(1)(a)(iii) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 115(b); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

Modifications

C1036S. 313A modified (1.7.2005) by S.I. 1994/2421, Sch. 4 Pt. II para. 29A (as inserted (1.7.2005) by S.I. 2005/1516, art. 9(5))