In the last article, we discussed what happens when you give a mortgage over your land. Essentially, you give what is otherwise called a “charge” against your property and you are the sole person responsible for doing so.
When someone has a charge against your property, it means that they have an interest in your property, even if that person’s name does not appear on any title deed for the property.
In order to create a charge by a mortgage, you must agree or take certain positive acts, for example, sign a mortgage deed or deliver your title deeds to the property to the lender.
However, there are charges which can be created without any positive action on your part; in fact, it may be because of your failure to act, something many persons do when they receive court papers. A judgment charge is one of those. It is created by law, not your act.
When someone brings an action against you in the High court, if the court orders you to pay a sum of money, no matter how small, the sum of money automatically attaches to any property you own, creating a judgment charge, and giving that person (called a “judgment creditor”) an interest in your property.
A judgment creditor does not need to do anything else to secure his interest in your land. The entry of the order for the sum of money triggers the creation of the judgment charge in accordance with section 23 of the Civil Procedure Act, Cap. 55 of the 2010 Continuous Revised Laws of Grenada (available on www.laws.gov.gd).
Upon compliance with a more complicated procedure, a judgment for a sum of money in the magistrate’s court can also become a judgment charge against property owned by you.
The usual manner in which someone is able to find out whether there are any judgment charges against your land is by conducting a search in the judgment book at the Supreme Court Registry.
For at least 12 years after the entry of such a judgment, if you wish to do anything with your property — give a mortgage, sell it, or even do a gift of it to your loved one, you need to clear the judgment charge by paying off the sum awarded under the judgment. You may wish to note that the judgment sum will attract interest, at a minimum statutory rate of 6% per annum.
If the judgment sum is not paid off, and you transfer the property to anyone else, that person too can become responsible for paying the judgment charge to the judgment creditor, with interest.
The ultimate right that the judgment charge gives to the judgment creditor is the right to apply to the court for an order that your property be sold in order for him to recover the judgment sum, plus interest and costs. This right exists whether you are still the owner of the property or you have passed it on to someone else.
Grenada Bar Association
