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  • FIRST POST
    blueback
    Charging Order? The myth
    • #1
    • 26th Jul 09, 11:28 AM
    Charging Order? The myth 26th Jul 09 at 11:28 AM
    I feel that this is so important that I thought a new thread should be made to highlight the importance of understanding the law on Charging Orders and how many people are stuck with their property in the false believe that they have had a Charging Order put on their property.

    In particular the thousands of Northern Rock customers that have had unsecured debt turned into secured debt by their tactics.

    If your property is jointly owned a creditor will not be able to obtain a CO against you, they can only get what is called a restriction.

    The laws on Restrictions are totally different to Orders, the most important being there is NO OBLIGATION for you to pay any of the proceeds of the sale to the creditor.

    However, during the whole court process you go through the reference from all parties (especially the creditor) will be to charging order and NOT to restriction. This is done in order to decieve you believing you are stuck with a CO.

    However, not all solicitors are aware of the law in this regard and it is important that you raise this point with them in the first instance before proceeding with them

    Quote:

    Restriction


    The restriction which can be entered on the register where a charging order is made against one of joint proprietors is in the following form :-
    No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to [name of person with the benefit of the charging order] at [address for service], being the person with the benefit of [an interim] [a final] charging order on the beneficial interest of (name of judgment debtor) made by the (name of court) on (date) (Court reference.…).
    You are therefore correct in saying that when the Land Registry receives an application to register, for example a transfer, we will not ask to see the consent of the person who has the benefit of the charging order. We will only want a certificate from the applicant for registration or his conveyancer that the person who has the benefit of the charging order has been given written notice of the transfer.

    If both joint owners sell the land to a third party the restriction will be cancelled when the transfer to the purchasers is registered.


    So I hope I have provided benefit to everyone who has had a restriction entered against them (especially NORTHERN ROCK CUSTOMERS) who believe wrongly that they are Charging Orders.

    You now have the freedom to go and sell your houses with the knowledge that the vultures can do nothing

    I also think this VERY IMPORTANT point needs highlighting by the moderators as many many people are stuck with houses that they believe they cannot sell
Page 144
    • Eliaskash
    • By Eliaskash 5th Oct 16, 11:12 AM
    • 9 Posts
    • 0 Thanks
    Eliaskash
    Thanks LR for the fast response.
    I will email the address provided now and update the forum with any response received.
    My gut feel is that it is uncertainty by the creditors as they are in a different jurisdiction ( foreign company).
    Kind regards.
    Originally posted by Eliaskash
    I have sent the email as follows:

    Can you kindly clarify two things about the above mentioned property title please?We need to understand the restrictions and why they have been set up this way in order to know how to proceed with a potential sale.

    1)Why are there restrictions registered against both owner/party`s beneficial interest rather than them being equitable charges?

    2) Secondly will these restrictions be overreached automatically when the condition of the restrictions are complied with ? ( notification of the sale to the creditor by purchasers/conveyancer).

    Kind regards,
  • Land Registry representative
    Thanks LLR!

    Can I ask what the situation is, regarding the transfer of ownership of a property, if a creditor who has been granted a charging order, that can be registered as an equitable charge on the deeds, doesn't do so?
    Originally posted by eggbox
    You deal with what is registered - you can't register it as X and then claim benefit of Y. But don't forget the CO is still a CO in its own right so still has to be 'dealt with' I assume quite separate from the registered title which covers the legal ownership rather than the beneficial one
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
    • eggbox
    • By eggbox 5th Oct 16, 3:33 PM
    • 1,059 Posts
    • 553 Thanks
    eggbox
    Hi LLR

    Thanks for clarifying but it's the original CCJ that would still have to be dealt with as a Charging Order is only a method of enforcement on an asset.

    If the asset the Charging Order is supposed to be attached to has been disposed of them it makes it extremely difficult to recover any proceeds?

    An equitable charge registered makes recovery of proceeds extremely likely (albeit in the future) but (as I read it) what you are saying is that if a CO has been made that can be registered as equitable, but the creditor has failed to register it properly, then it's tough luck on the creditor?
  • Land Registry representative
    Hi LLR

    Thanks for clarifying but it's the original CCJ that would still have to be dealt with as a Charging Order is only a method of enforcement on an asset.

    If the asset the Charging Order is supposed to be attached to has been disposed of them it makes it extremely difficult to recover any proceeds?

    An equitable charge registered makes recovery of proceeds extremely likely (albeit in the future) but (as I read it) what you are saying is that if a CO has been made that can be registered as equitable, but the creditor has failed to register it properly, then it's tough luck on the creditor?
    Originally posted by eggbox
    You deal with what is registered as far as the title is concerned. So you have two restrictions to comply with.
    Can't see how the creditor can look to move the goalposts unless they now apply to note the CO as an equitable charge for example. You can't register it as a restriction and then expect it to be treated as something else from a registration perspective

    Hopefully the specifics around this example will offer a clue as to what's what but in my experience the details registered with us are no more than the application form itself
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
    • Eliaskash
    • By Eliaskash 5th Oct 16, 4:17 PM
    • 9 Posts
    • 0 Thanks
    Eliaskash
    You deal with what is registered as far as the title is concerned. So you have two restrictions to comply with.
    Can't see how the creditor can look to move the goalposts unless they now apply to note the CO as an equitable charge for example. You can't register it as a restriction and then expect it to be treated as something else from a registration perspective

    Hopefully the specifics around this example will offer a clue as to what's what but in my experience the details registered with us are no more than the application form itself
    Originally posted by Land Registry representative

    OK , LLR that makes sense.
    Then it seems like good fortune that this "mistake" has happened ( if that is what it is).
    • DAKOTA45
    • By DAKOTA45 5th Oct 16, 4:48 PM
    • 380 Posts
    • 34 Thanks
    DAKOTA45
    Hmmm… I have a question for LRR, too… I recently looked online to see who owned the surrounding land alongside my garden as I had my suspicions that it had been sold recently. I was right, it has.

    I'm a bit confused, as my neighbour, (who has two separate COs against my property to secure a debt), recently sold a piece of land adjacent to my property. In the deeds, there is no mention of his address, but he refers to my property as "The retained land"… I'm completely at a loss as to what this can mean… why is my property 'retained'? It's as though it is me that's selling the land…and retaining my garden.
    This neighbour has a history of tax evasion and I'm wondering if he is trying to avoid CGT, the land being agricultural and not part of his garden…or it could be so that the buyer can easily get planning permission by saying it used to be part of my garden...

    I am worried he is doing something weird…I could PM you a copy of this title deed…

    Hope you can help, please?

    D45
    Last edited by DAKOTA45; 05-10-2016 at 4:51 PM.
  • Land Registry representative
    DAKOTA45 - deeds will often have a set of defined terms to make it easier to follow. A bit like you being D45 or DAKOTA45

    What he's called it makes no wider difference re it's use, CGT or planning or anything as it is still just a piece of land for those purposes

    The definition 'retained land' is only relevant to the deed itself as that is where it is defined and then used
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
    • DAKOTA45
    • By DAKOTA45 6th Oct 16, 8:17 AM
    • 380 Posts
    • 34 Thanks
    DAKOTA45
    Many thanks, LRR! I just wondered why he didn't attach it to his own property… we share a boundary and the sold land attaches to his own property as well as mine. He is the one selling off pieces of his land and I would have expected the 'retained' land as being that which he has not yet sold… that's all it was.

    D45
  • Land Registry representative
    Eliaskash - just to confirm that the COs were registered as form K restrictions as that is what the solicitor applied for.
    As such if there has been a transfer for money by two or more proprietors to a third party, and the restrictions have been complied with, they will be overreached and automatically cancelled
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
    • Eliaskash
    • By Eliaskash 6th Oct 16, 9:58 AM
    • 9 Posts
    • 0 Thanks
    Eliaskash
    Find below the response received this morning from Land registry customer service with regard to the restrictions.
    They are in line with what we have been thinking ( that it was an oversight from the creditors ) and say exactly what LR Rep has mentioned previously.

    ------- ---- ---- --------------------------------------------------------------------------------

    Dear EXX,

    Thank you for your emails.

    The restrictions have been registered as these are what the applicant applied for at the time. They did not apply to note the charging orders as equitable charges but as form K restrictions.
    As such if there is a transfer for money by two or more proprietors to a third party then the restrictions can be overreached and automatically cancelled when the transfer is registered and providing they have been complied with.
    regards
    XXXXXX
    Customer Policy and Handling
    • Eliaskash
    • By Eliaskash 6th Oct 16, 11:21 AM
    • 9 Posts
    • 0 Thanks
    Eliaskash
    Eliaskash - just to confirm that the COs were registered as form K restrictions as that is what the solicitor applied for.
    As such if there has been a transfer for money by two or more proprietors to a third party, and the restrictions have been complied with, they will be overreached and automatically cancelled
    Originally posted by Land Registry representative
    Just saw now that you posted your reply almost the same time as me.
    My lawyer is not agreeing that the creditors do not have to pay the debt first .

    I have suggested the lawyer rings Land Registry to check for themselves and update their knowledge .

    Thanks for all your help.
    • eggbox
    • By eggbox 6th Oct 16, 12:27 PM
    • 1,059 Posts
    • 553 Thanks
    eggbox
    Eliaskash

    We do now have a Solicitor who understands that a Form K Restriction poses no obligation to pay the debt. If you need his details please pm me.
    • Eliaskash
    • By Eliaskash 6th Oct 16, 1:09 PM
    • 9 Posts
    • 0 Thanks
    Eliaskash
    Eggbox,

    I will see what my lawyers have to say first as after some emails the case has been passed on to the senior lawyers to check that what I am saying is correct.I have sent them all the details and also the link to this forum.

    If no dice then I will request details .

    I do not even think the people selling us the house know about this .I would tell them but they do not really communicate with me and I have a suspicion the suggestion will also meet with resistance from their lawyer.

    The more lawyers we get on board the better for the good of all people who need this help.


    kind regards
    • eggbox
    • By eggbox 7th Oct 16, 9:26 AM
    • 1,059 Posts
    • 553 Thanks
    eggbox
    Hi Eliaskash

    It would be interesting to know your Solicitors response after taking on board the info you have sent them?

    Yes it would be nice to have more Solicitors who understand the limitations of a Form K Restriction, however; whilst we do have one willing to help I'm not sure I'd put to much effort into converting those who seem to want to ignore those limitations?
    • Eliaskash
    • By Eliaskash 7th Oct 16, 5:18 PM
    • 9 Posts
    • 0 Thanks
    Eliaskash
    Hi Eggbox,

    I agree with your point but as I have paid for their services I will give them some time before I assess the situation again.

    I will update when I have a response .
    • gchads
    • By gchads 10th Oct 16, 4:17 PM
    • 10 Posts
    • 0 Thanks
    gchads
    gchads

    Mortgage lenders will, unfortunately, only lend if they have the first charge on the mortgage due to the Power of Sale required in the event of you defaulting on the loan.

    So any new lender would, therefore, require the Restriction you have to be removed prior to lending to enable being the first (by date) registration on the deeds?

    The Land Registry records aren't always updated of an FCO happening so your creditor could may have an FCO. But with jointly owned property there is little difference in the effect an FCO has over an ICO?
    Originally posted by eggbox
    Hi Eggbox,
    Thanks for the reply. I need to remortgage and the Creditor with ICO wants the full amount . I've tried to come to a F&F but there not budging. Half the amount I owe is down to interest and charges and these blood suckers don't care. Seems like I'm gonna have to pay them off unless you know any way else. I was under the impression. Pre 2012 debt they could t obtain a FCO on a property that was held jointly.


    Thanks

    gchads
    • eggbox
    • By eggbox 10th Oct 16, 4:28 PM
    • 1,059 Posts
    • 553 Thanks
    eggbox
    Gchads

    The only advice I can give (if you don't want to sell) is to look for a secured loan?

    The criteria for being the first chargee is not essential for those types of loans.

    Not sure whether that helps or not?
    • gchads
    • By gchads 11th Oct 16, 7:32 PM
    • 10 Posts
    • 0 Thanks
    gchads
    Hi Eggbox,
    Thanks for trying. What's your thoughts on filling out a SEV ( severance of joint ownership) go for tenancy in common and transfer bulk of equity to wife? And keep 1% myself. So when the remortgage goes through they can keep 1% of equitable share? Any chance you could send me the solicitors details please?

    Thanks

    gchads
    • eggbox
    • By eggbox 12th Oct 16, 11:52 AM
    • 1,059 Posts
    • 553 Thanks
    eggbox
    gchads

    Unfortunately, you became tenants in common when the CO was granted. This is because you can't "charge" only one half of a "joint" tenancy arrangements.

    So in the eyes of the Law you and your partner own 50% each of the equity in the property (under a joint tenancy you both own 100%)

    So transferring wouldn't make any difference as the CO would take preference by virtue of the date registered on the deeds on your "share".

    But I have sent a pm regarding the Solicitor.
    • DAKOTA45
    • By DAKOTA45 13th Oct 16, 7:02 AM
    • 380 Posts
    • 34 Thanks
    DAKOTA45
    Hi Eggbox,
    Thanks for the reply. I need to remortgage and the Creditor with ICO wants the full amount . I've tried to come to a F&F but there not budging. Half the amount I owe is down to interest and charges and these blood suckers don't care. Seems like I'm gonna have to pay them off unless you know any way else. I was under the impression. Pre 2012 debt they could t obtain a FCO on a property that was held jointly.


    Thanks

    gchads
    Originally posted by gchads
    What about a Bridging Loan? D45
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