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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 170
    • Rangers123
    • By Rangers123 24th Aug 17, 2:38 AM
    • 15 Posts
    • 9 Thanks
    Rangers123
    Hi Eggbox, I am selling a house I own with 3 other owners. There are no mortgages on the property, just a restriction:

    RESTRICTION:
    No disposition of the registered estate,
    other than a disposition by the proprietor of any registered charge
    registered before the entry of this restriction, is to be registered
    without a certificate signed by the applicant for registration or theconveyancer that written notice of the disposition was given to Sigma
    SPV1 Limited (incorporated in Jersey) at care of HL Legal 3rd Floor
    Grosvenor House, Prospect Hill, Redditch B97 4DL, being the person with
    the benefit of an interim charging order on the beneficial interest of...


    I was wondering if I could possibly ask for the name of the solicitor that Hootin_Heck used, to see if I'd be able to use them for our sale?
    • DAKOTA45
    • By DAKOTA45 31st Aug 17, 6:02 PM
    • 478 Posts
    • 38 Thanks
    DAKOTA45
    Hi Dakota, was a Default Judgement actually granted by the Court or was only an application made for such?

    If it was granted and registered then you should have been notified of the set aside application (which is what they would have to apply for using form N244)

    At the very least, you should have been notified on what grounds the Judgement was set aside by the Court?
    Originally posted by eggbox
    Hi Eggbox…
    W
    Doesn't time fly when youre having fun?!
    Well … I only found out quite recently, but when the other side filed their defence, the court wrote back and said it couldn't be dealt with as "a default judgement has been entered"… does that mean 'granted', I wonder?
    Then they apparently spoke to the court and the next thing is it's all back on track again… no default judgement… weird!!

    The thing is, if they wanted to argue about it, they should have copied me in with their correspondence with the court.. as it was underhanded and probably not in accordance with the rules…. see here;

    Communication from one party to the Court without copying the other party should almost never occur and requires specific justification in accordance with the!Rules, as the Lord Judge LCJ said at paragraph 7 of his judgment in!Mohamed v The Secretary of State for Foreign and Commonwealth Affairs (No. 2)![2010] EWCA Civ 158:
    “7. It is an elementary rule of the administration of justice that none of the parties to civil litigation may communicate with the court without simultaneously alerting the other parties to that fact. …”

    The impropriety is particularly serious where the party communicating unilaterally with the Court is represented while the other party is not.! Communications going the other way, from the Court to one side and not the other, require specific justification and very careful thought indeed, especially when the party omitted from the communication is the unrepresented one.!
    There is a real risk of undermining confidence in the impartiality of Judges and the administration of justice if that principle is not scrupulously observed.


    Hmmm… I think the represented parties get away with murder… quite literally, I'm sure.

    D45
    • eggbox
    • By eggbox 1st Sep 17, 7:57 AM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    I would certainly query it with the MOJ as if a Default Judgement has been issued I can't see it being able to be removed without a) coming in front of a Judge again and (b) You being notified of it's removal?

    At the very least you deserve an explanation of how it was allowed to be removed?
    • DAKOTA45
    • By DAKOTA45 1st Sep 17, 9:51 AM
    • 478 Posts
    • 38 Thanks
    DAKOTA45
    I would certainly query it with the MOJ as if a Default Judgement has been issued I can't see it being able to be removed without a) coming in front of a Judge again and (b) You being notified of it's removal?

    At the very least you deserve an explanation of how it was allowed to be removed?
    Originally posted by eggbox
    Thanks, EggBox… That's what I thought, but I wrote to the Court to ask if there had been an application to set aside a default judgement by the other party, and they didn't even reply.

    They often ignore my correspondence and that's why I'm where I am now; because of the court's mistakes in the last proceedings where they messed up my counterclaim and I ended up with an apology from them but far too late as it came after the Judgement granting the other side a Charging Order…

    Straight to the MOJ, then, do you think? I'm just a bit worried that any complaints might jeopardise my next trial… the judiciary is so clique-y, and they hate LIPs. D45
    • eggbox
    • By eggbox 1st Sep 17, 11:05 AM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    The MOJ won't have any ties to your particular Court but I wouldn't make your enquiry as a complaint?

    I'd simply explain the circumstances (in brief they don't want the details of what the CCJ was for!) that you obtained a Default Judgement against but the person it was against has managed to get the Default Judgement removed without a Court hearing?

    Include that you have requested details of how this has been possible from your local Court but you have not received any response from them?

    And remember to send ALL correspondence by recorded delivery.
    • AdeleOx
    • By AdeleOx 1st Sep 17, 4:45 PM
    • 2 Posts
    • 0 Thanks
    AdeleOx
    Have I got this right?
    My husband has a restriction on our property back in 2005.
    I however am the mortgage holder and am now selling the property. All the equity belongs to me as I paid the mortgage.
    His name is on the deeds due to fault from a previous mortgage that is settled when we remortgaged. The only restriction is his and the management company.
    From reading this, we do not have to inform them we are selling the property until we have exchanged contracts? Is that right?
    • eggbox
    • By eggbox 4th Sep 17, 8:47 AM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    AdeleOx

    Its what the actual Restriction on your deeds states that will let you know the answer to that one? If its a standard Form K then the answer is most likely as you have stated?

    For a small fee you can check on the Land Registry website (if you are unsure of the wording) what the Restriction on your deed states? Post that on here and we can let you know how you stand?
    • AdeleOx
    • By AdeleOx 4th Sep 17, 3:07 PM
    • 2 Posts
    • 0 Thanks
    AdeleOx
    Thanks Eggbox
    (30.08.2005) RESTRICTION: 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 Citibank International plc at care of Salans, North Tower,
    26 Elmfield Road, Bromley, BR1 1WA being the person with the benefit of
    an Interim charging order on the beneficial interest of XXXXXXXXXXX
    made by the Medway County Court on 22 July 2005 Claim Number 4XXXXXXXX
    • eggbox
    • By eggbox 5th Sep 17, 1:01 PM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    AdeleOx

    That is a standard form Restriction so, as you'd hoped, it means the buyer can choose the best time to suit when notification is given to the Restriction holder.
    • DAKOTA45
    • By DAKOTA45 5th Sep 17, 6:03 PM
    • 478 Posts
    • 38 Thanks
    DAKOTA45
    AdeleOx

    That is a standard form Restriction so, as you'd hoped, it means the buyer can choose the best time to suit when notification is given to the Restriction holder.
    Originally posted by eggbox
    Is it the buyer's solicitor who informs the charge holder or the sellers?
    As you know, I'm about the only person ever who was unlucky enough to get a modified restriction, and have to give 14 days notice… but what if I don't want to give the creditor notice? Can you think of any way I can get out of it?
    D45
    • eggbox
    • By eggbox 6th Sep 17, 10:28 AM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    Is it the buyer's solicitor who informs the charge holder or the sellers?
    As you know, I'm about the only person ever who was unlucky enough to get a modified restriction, and have to give 14 days notice… but what if I don't want to give the creditor notice? Can you think of any way I can get out of it?
    D45
    Originally posted by DAKOTA45
    No disposition of the registered estate is to
    be registered without a certificate signed by the applicant for
    registration or his conveyancer
    It's the Buyer

    If it's only a 14 day notice clause then I wouldn't worry to much as it would appear most Solicitors are expecting payment to be automatically paid. It's extremely doubtful they would take any action prior to not being paid as there is little they can do until money actually changes hands (and as we've witnessed they don't appear to afterwards, either?)

    The one that seems to cause problems is where the Restrictioner has to confirm written notice, to the LR, that they have been notified of a sale happening as they can dictate the situation?
    • DAKOTA45
    • By DAKOTA45 9th Sep 17, 7:17 AM
    • 478 Posts
    • 38 Thanks
    DAKOTA45
    Thank you, Eggbox.
    I was wondering if, once I've given the creditor 14 days notice, he can make an application to the court to freeze my assets prior to the sale completing… or something.

    But it's a joint mortgage so I wonder what the legality of that would be, where the debt is not jointly shared by my husband?

    The other thing is that my husband and I don't have a joint bank account as we are separated (but not divorced).

    Would the fact that I have now a large claim against the creditor have any implications as to whether I can sell my property or would I have to wait until after the trial to see who owes what to whom?

    So complicated… I have a strong case against the creditor but he is armed to the teeth with barristers and lawyers… and if I lose my claim, there will be tens of thousands more in legal fees to pay, wiping out any equity I may have had.

    I really need a solicitor, but I'm living hand to mouth atm, so it's all pie in the sky…

    D45
    • eggbox
    • By eggbox 11th Sep 17, 7:26 PM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    Hi Dakota

    As previously discussed, a freezing application carries, potentially, a huge financial risk for the person applying for the application. So its an unlikely course of action? Would anything change if you put your house up for sale before the case was heard, unfortunately that is something you would only find out by putting your house up for sale?

    The most likely outcome is nothing would happen as the creditor still, currently, has the CO in place?
    • WardyP
    • By WardyP 12th Sep 17, 7:41 PM
    • 1 Posts
    • 0 Thanks
    WardyP
    Hi, i have read a lot of this thread, and it would appear that disposing if the property is the easiest method of removing a restriction!
    Can anyone please offer any advice on the folliwing scenario?
    A restriction was added to the Proprietorship Register in 2009, in relation to a CCJ with Toyota finance. The property is jointly owned by my sister (V) and her ex (T).
    They divorced in 2010.
    V was unable to remove T from the property during the divorce due to arrears that had built up and tge CCJ and the negligible equity in the property at the time.
    The divorce settlement indemnified T from further mortgage payments but cancelled any rights to sny future equity also.
    7yrs on he told her he'd cleared the ccj (i think he assumed not shiwing on hus credit file was the same thing) and demanded to be removed from the mortgage.
    V now has a mortgage offer with her current husband. Conveyancers have advised that they cannot proceed due to the restriction.
    T will not discuss ir provide infirmation.

    1. What can Toyota benefit if a court order states he has no equity?
    2. Is there any way of removing this restriction 8yrs on?
    3. Due to DPA Toyota cant tell her what is outstanding, yet they hold a restriction on a jointly owned property. Is there any way she can find the balance to consifer whether to pay it off?
    Or, given that she doesnt really want to move, is her only other option to transfer the property into her husbands name? Who had no interest previously?

    Thank you to anyone able to offer their experience or expertise
    • DAKOTA45
    • By DAKOTA45 13th Sep 17, 10:43 AM
    • 478 Posts
    • 38 Thanks
    DAKOTA45
    Hi Dakota

    As previously discussed, a freezing application carries, potentially, a huge financial risk for the person applying for the application. So its an unlikely course of action? Would anything change if you put your house up for sale before the case was heard, unfortunately that is something you would only find out by putting your house up for sale?

    The most likely outcome is nothing would happen as the creditor still, currently, has the CO in place?
    Originally posted by eggbox
    Thank you Eggbox…
    Presumably, as it's a jointly owned property and half of the equity is my husbands, they wouldn't be allowed to freeze his assets as it's not his debt… or am I wrong? (We don't have a joint bank account).
    D45
    • eggbox
    • By eggbox 13th Sep 17, 1:35 PM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    Wardy P in answer to your questions,


    1. What can Toyota benefit if a court order states he has no equity?
    If the Restriction CO was granted prior to the Divorce then it will take precedence by virtue of date. Anything decided after the date of the CO should exclude the amount secured in favour of the CO by the Court? But it would be in your interests to see if the CO is attracting interest as that could cause problems down the line?

    2. Is there any way of removing this restriction 8yrs on?
    3 ways - Pay off the amount due to the creditor then request its removal, request the Creditor remove the Restriction (you can always try saying divorce Court has left T without any equity) or sell the property in the manner outlined in this thread.

    3. Due to DPA Toyota cant tell her what is outstanding, yet they hold a restriction on a jointly owned property. Is there any way she can find the balance to consifer whether to pay it off?
    Explain the circumstances of the divorce and explain you are now planning to sell the property and require a settlement figure and that should get them motivated.

    Or, given that she doesnt really want to move, is her only other option to transfer the property into her husbands name? Who had no interest previously? Transferring the property doesn't remove the Restriction, but if your sisters new partner could purchase the property on his own then your sister could re-add her name to the deeds after the sale when its clean?

    Also, if your sister doesn't want to move then tell her not to worry as Toyota won't be able to try and enforce a sale.

    Originally posted by WardyP
    • modnod
    • By modnod 18th Sep 17, 11:00 AM
    • 1 Posts
    • 0 Thanks
    modnod
    Scenario help please.

    Mr and Mrs X have sold their property that they jointly own, and as described in this thread, completed by writing to parties that had interim CO on title (Mr X received the CO only). First charge mortgage was paid back and not the CO's. Great.

    However one of the creditors are now asking for monies from their CO. Can they do this and what enforcement actions can they apply?
    • eggbox
    • By eggbox 18th Sep 17, 4:33 PM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    modnod

    Yes they can (they do after all have a Charging Order attached to the debt?)

    Whether they will try and enforce the debt will, most likely, depend on what chances they feel they have by doing so? So that largely depends on what encouragement that you give them you have the means to settle the debt?
    • RMS2
    • By RMS2 19th Sep 17, 4:25 AM
    • 331 Posts
    • 166 Thanks
    RMS2
    modnod

    Yes they can (they do after all have a Charging Order attached to the debt?)

    Whether they will try and enforce the debt will, most likely, depend on what chances they feel they have by doing so? So that largely depends on what encouragement that you give them you have the means to settle the debt?
    Originally posted by eggbox
    For clarification. Now that the property has been sold, has the charging ordered not disappeared,? Yes the debt remains, but not the CO.
    • eggbox
    • By eggbox 19th Sep 17, 9:52 AM
    • 1,234 Posts
    • 631 Thanks
    eggbox
    The CO is made against whatever "Beneficial Interest" (equity) the debtor has in the property. When the debtor sells the property the creditor is entitled to receive, through the CO, the value of the debt owed to be taken from the proceeds the debtor has realised? Being entitled and actually receiving are, however, two different things.

    The difficulty for the creditor is that there is nothing to prevent the debtor (barring unaware Solicitors) from not paying over what is owed at the point of sale and still being able to transfer the property to the new purchaser. So whilst the creditor is, legally, entitled to the proceeds getting them is a whole different ball game?

    I know through experience that it comes as quite a shock to many people who take a person to Court for a debt owed, to discover that once they receive a Judgement from the Court, in their favour, they then have to understand that is only the start of the recovery process not the end. The Court does nothing further to recover the debt unless the person who is owed the debt then pays more money to try and recover the debt themselves?

    This is the problem with a CO that hasn't being paid when a property is sold. The CO does still exist against the proceeds the debtor realised through the property sale, the difficulty is the creditor will then have to spend more time and money trying to discover where the proceeds are?

    As we've discussed on here previously, debt collection isn't vindictive it's a business. If a creditor has spent time and Court fees obtaining a Charging Order against a debtors asset, but still finds they haven't been repaid; are they then likely to spend further money chasing the debt?
    You can never say never and the size of the debt will be a factor (especially if they have only spent pennies to the pound buying the debt); but I would say its unlikely purely on a business cost factor.
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