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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 167
    • RMS2
    • By RMS2 24th May 17, 2:59 AM
    • 320 Posts
    • 157 Thanks
    RMS2
    Ok.../Users/Desktop/Form K.jpeg I don't think this will work, though…

    It's a jpeg on my desktop… perhaps it needs to be in a different format… it's an imaged I have scanned…
    D45
    Originally posted by DAKOTA45
    It wants a link, not a file.

    https://postimage.io/ or similar.
    • Choochybaby69
    • By Choochybaby69 24th May 17, 1:01 PM
    • 19 Posts
    • 0 Thanks
    Choochybaby69
    Hi Eggbox,
    Does a creditor have any obligation to keep me informed of the debt, with a charge on my property, that is accruing interest, or is it up to me to ask them for up-dates? Do they have to keep me informed of how much it is?
    Thanks, Choochy baby
    • DAKOTA45
    • By DAKOTA45 25th May 17, 7:36 AM
    • 464 Posts
    • 38 Thanks
    DAKOTA45
    Ah… seems I'm not allowed to post attachments...

    You may post new threads
    You may post replies
    You may not post attachments
    You may edit your posts
    BB code is On
    Smilies are On
    [IMG] code is On
    HTML code is Off


    D45
    • DAKOTA45
    • By DAKOTA45 25th May 17, 7:43 AM
    • 464 Posts
    • 38 Thanks
    DAKOTA45
    Deleted...
    Last edited by DAKOTA45; 01-06-2017 at 3:39 PM.
    • Googly eye
    • By Googly eye 30th May 17, 7:48 PM
    • 3 Posts
    • 0 Thanks
    Googly eye
    Hi everyone, thank you for the really great information on this thread, its just a fantastic help. My house is currently on the market and I am preparing myself for hopefully a quick sale. We have several restrictions against our property of which are either in my name or my husbands name, not joint. I recently started contacting solicitors to enquire on their knowledge of charging orders and restrictions. One solicitor has advised that to try and get a head of the game I am required to contact the creditors and advise them that we are selling the property and to obtain a letter from them to advise that they have been informed of our forth coming disposition. From reading this thread it appears that the creditor should be advised direct from our solicitor and not until we are ready to complete, please could anyone advise? If I am to contact the creditors direct I am happy to do so but maybe a little concerned on the wording I should use. Any help/advise will be greatly appreciated.
    • eggbox
    • By eggbox 30th May 17, 8:29 PM
    • 1,212 Posts
    • 617 Thanks
    eggbox
    One solicitor has advised that to try and get a head of the game I am required to contact the creditors and advise them that we are selling the property and to obtain a letter from them to advise that they have been informed of our forth coming disposition. From reading this thread it appears that the creditor should be advised direct from our solicitor
    Originally posted by Googly eye
    The solicitor giving the above advice is, almost certainly, assuming that you are going to pay the debts owed from the sale proceeds? If that is not your intention then, as the seller, you (or your solicitor) aren't required to contact any creditors involved.

    This thread also explains that, for a Standard Form K Restriction, it is the BUYER or his Solicitor that is required to inform any creditors of the sale NOT the seller.

    This is because the wording, in the terms of the Restriction, explains that it must be the Buyer (or his agent) that certifies they have informed the creditor of the sale (to the Land Registry) not the seller.
    • eggbox
    • By eggbox 30th May 17, 8:36 PM
    • 1,212 Posts
    • 617 Thanks
    eggbox
    Hi Eggbox,
    Does a creditor have any obligation to keep me informed of the debt, with a charge on my property, that is accruing interest, or is it up to me to ask them for up-dates? Do they have to keep me informed of how much it is?
    Originally posted by Choochybaby69
    Under the terms of a loan made under the Consumer Credit Act 1974, the creditor has to inform the debtor of certain details at certain times. Once a Judgement has been given on the debt, however, then the CCA 1974 no longer applies and the creditor has no obligation to update you.

    So its up to you to contact them if you require an update on the debt amount.
    • eggbox
    • By eggbox 30th May 17, 8:56 PM
    • 1,212 Posts
    • 617 Thanks
    eggbox
    I just wanted to put something on here which proves that solicitors are fully clued up about restrictions… it's a statement by Bloke Moron LLP saying that a Form K provides no security… it was used in a 'Without Notice' application to the court as a reason to request a modification to the the Form K Charging Order, as, without modification, the Judgement Creditor has no security for the debt because he is only notified after disposition.
    This firm wrote about the uselessness of Restrictions some time ago, but the link seems to have disappeared.
    I wonder if we will see more 'modifications' as time goes on?
    Originally posted by DAKOTA45
    Hi Dakota

    I think what you are referring to only proves Bloke Moron understood the implications of the Form K Restrictions limitations, not solicitors in general? We've seen posters here explain they have contacted, literally, over a dozen solicitors and discover none of them understand why a Form K is (or should be) such weak security for the creditor. So I think that proves BM were a one off?

    Also, the passage you refer to that BM wrote, explaining for the legal community exactly why a Form K is (or, again, should be) useless to the creditor, disappeared when debtors began using the information provided to their advantage and began selling without paying up.

    The passage you refer to did, actually, sway the solicitor used by Brightonian (a fellow poster on here who sold without settling the CO's) as it was a Law firm explaining the weakness of the Form K Restriction?

    But with regard to the "modifications" you refer to; I'd keep quiet about those as any Solicitors reading this thread may not realise they can be applied for?
    • Googly eye
    • By Googly eye 30th May 17, 10:58 PM
    • 3 Posts
    • 0 Thanks
    Googly eye
    Thank you Eggbox, hopefully I will find a solicitor that understands that.
    • Googly eye
    • By Googly eye 30th May 17, 11:04 PM
    • 3 Posts
    • 0 Thanks
    Googly eye
    The solicitor giving the above advice is, almost certainly, assuming that you are going to pay the debts owed from the sale proceeds? If that is not your intention then, as the seller, you (or your solicitor) aren't required to contact any creditors involved.

    This thread also explains that, for a Standard Form K Restriction, it is the BUYER or his Solicitor that is required to inform any creditors of the sale NOT the seller.

    This is because the wording, in the terms of the Restriction, explains that it must be the Buyer (or his agent) that certifies they have informed the creditor of the sale (to the Land Registry) not the seller.
    Originally posted by eggbox
    Sorry one more question and probably an obvious answer but one must ask - What if the buyer or his agent refuses to make contact with the creditors, I am presuming the sale will fall through? If that is the case is there anything I could do to intervene, apart from paying off the restrictions, which I cant do? Thanks
    • eggbox
    • By eggbox 30th May 17, 11:16 PM
    • 1,212 Posts
    • 617 Thanks
    eggbox
    Sorry one more question and probably an obvious answer but one must ask - What if the buyer or his agent refuses to make contact with the creditors, I am presuming the sale will fall through? If that is the case is there anything I could do to intervene, apart from paying off the restrictions, which I cant do? Thanks
    Originally posted by Googly eye
    There isn't any logical reason why a buyer wouldn't want to comply with a Restriction as it facilitates the house purchase. But to answer the question, in that scenario only paying off the debt (to allow you to remove the Restriction) would probably be the only way to proceed with the sale.
    • Hootin_Heck
    • By Hootin_Heck 19th Jun 17, 8:30 AM
    • 23 Posts
    • 10 Thanks
    Hootin_Heck
    Quick Update....
    Not a lot being happening the last few weeks, but no major problems encountered just yet.

    The only issue we are concerned about is to do with the way the mortgage was structured when we took it out 12 years ago. It was a "Together Mortgage" which means there was a secured amount and an unsecured amount borrowed.
    We are trying to ensure that we only pay the secured element of the mortgage when the sale completes. We need the unsecured part to be "de-linked" (which will mean a higher interest rate) and luckily we have found the original paperwork which states that the unsecured and secured elements are to be treated separately. One is regulated by the FSA and the other by the CCA 1974...so we need to get this to the solicitor today as the lender is including the unsecured element in the redemption figure.

    We also discovered that we have being paying PPI on all elements of the mortgage..so we are going to get the solicitor to look at that too.

    We are hoping to confirm a completion date in the first 2 weeks of July, so hopefully will be able to update on progress regarding the funds soon.
    • eggbox
    • By eggbox 19th Jun 17, 9:08 AM
    • 1,212 Posts
    • 617 Thanks
    eggbox
    I've never come across this type of mortgage and I'm trying to get my head around how a lender would allow "unsecured" borrowing as part of the mortgage loan? But its good you have the original paperwork detailing the lending as separate.

    And if you have discovered there was PPI on the loan that, potentially, could be a big help in making a settlement of the mortgage on the terms you want?
    • Hootin_Heck
    • By Hootin_Heck 19th Jun 17, 2:41 PM
    • 23 Posts
    • 10 Thanks
    Hootin_Heck
    yeah...back in the day, NRAM used to offer 120% credit, consisting of main mortgage, and an unsecured amount not above £20k...literally threw cash at people back then!!...but profited most from the PPI they lumped on, and an increase in rates to 8% for the unsecured amount if de-linked. Basically, as an example, for an additional £5k which was borrowed.... with PPI.... the total amount for that £5k is £13000k. We have been ripped off from day 1 with them as our lender
    • eggbox
    • By eggbox 19th Jun 17, 2:53 PM
    • 1,212 Posts
    • 617 Thanks
    eggbox
    Oh, yes I forgot about the extremely dodgy Northern Rock!

    Fingers crossed you get a fair whack back on the PPI, though?
    • Pinkypo
    • By Pinkypo 21st Jun 17, 5:51 PM
    • 6 Posts
    • 0 Thanks
    Pinkypo
    Hi all, I know this is an old threat and am hoping someone sees this. We are told about this by a solicitor last year when the house was in the process of selling, unfortunately it fell through. We went on to sell it again this year, but we used a different estate agent, because we couldn't pay their fees up front, we had to use a solicitor they choose. Now the problem we have is that this solicitor is adamant that the sale procedures has to pay of the charges and we know there isn't enough equity to do so. We have tried to tell them what we was told by the other solicitor, but they are not listening. The buyer signed two weeks ago, but our solicitors is waiting for redemption figures from the creditors. We just don't know what to do. Is there a piece of legislation I can throw at them? Any suggestions would be appreciated
    • Pinkypo
    • By Pinkypo 21st Jun 17, 6:32 PM
    • 6 Posts
    • 0 Thanks
    Pinkypo
    Hi all, I need some advice please. We was told about this with a previous solictor, unfortunately the house sale fell through. We are selling again but unfortunately we used a different estate agents and because we couldn't afford to pay their fees up front, we had to go with the solictor of their choice. The buyer signed over two weeks ago but our solicitors are waiting for redemption figures from the creditors, no matter how many times I have told them about this, they believe the creditors have to be paid out of the equity, I have even told them there isn't enough equity. I am getting so frustrated and worried the sale will fall through. Does anyone know a regulation or anything I can throw at them so they believe me.
    Any advice would be much appreciated
    • Pinkypo
    • By Pinkypo 21st Jun 17, 8:53 PM
    • 6 Posts
    • 0 Thanks
    Pinkypo
    Hi, I am using a solictor that has no idea about this. What can i say to her to make her understand?
  • Land Registry
    Refer them initially to Practice Guide 76 section 4 3rd para and explain that a form K restriction can be automatically cancelled providing it protects an interest under a trust of land and the interests under the trust have been overreached because there has been a transfer for money by two or more proprietors to a third party.

    I am sure eggbox can provide some additional material/explanation as well although this thread does refer, many times, to the sort of detail needed
    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 22nd Jun 17, 9:08 AM
    • 1,212 Posts
    • 617 Thanks
    eggbox
    Pinkypo

    What LRR has advised is the best way to start and explain that there is no legal obligation to settle the debt in order for the property to be transferred to a new owner. You also explain that the Land Registry will confirm they don't require proof of payment of the debt, to transfer a new owner, as the terms of the Restriction does not require this.

    Unfortunately, I suspect it will be more of a "professional" obstacle you face as they will, most likely, want you to settle the debt as that is what they are used to doing? You should also keep in mind that Solicitors look after their own interests first and their client's interests second.

    So, armed with LRR information, you need to explain to your Solicitor that you do not wish to settle the debts at the time of the sale as you have no legal obligation to do so. (If they say there is, by the way, you simply ask them to explain to you where this is, legally, written down.)

    You further explain to them that you understand the debt exists and you will make arrangements to pay the debt if and when the creditor contacts you for payment. But you are instructing them (you are the paying client remember) not to settle the debt from the sale funds and it is of no concern to them if a third party creditor gets paid or not when the sale occurs.

    Start with the above to see what resistance you get but come back to the board if they don't play ball?
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