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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 175
    • eggbox
    • By eggbox 28th Nov 17, 9:36 AM
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    eggbox
    If the sale price achieved is enough to settle the mortgage debt in full and there is money left over the lender will instruct its solicitors to distribute this surplus to whoever is entitled to receive it. If there are other debts secured on the property then it will be passed to the next creditor in line, usually the one whose interest was registered on the earliest date. If there are no other debts then the proceeds will be paid to you.
    [/I][/COLOR]
    Originally posted by MarineBoy
    Unfortunately, it seems to have been written by someone who doesn't understand the subject and mechanics of what happens under a power of sale?

    The reason any surplus funds get passed back to the debtor is because when a power of sale occurs ALL other charges are wiped from the register. Therefore, no other charges will (or can be at that point) registered on the deeds.

    It doesn't mean the creditors can't lay claim to the surplus proceeds but they aren't automatically entitled to them, under the previous charge, as the charge on the assett involved has been wiped when a power of sale occurs.

    If you have read this thread through you will see a poster (from around 3-4 years back from memory) that became quite aggressive towards this threads aim as the power of sale had lost her several thousands of pounds?

    The posters anger was because their "charge" (I believe for a business loan) had been wiped when the debtors property was repossessed and the debtor was, subsequently, paid the proceeds from the sale of the property.
    • eggbox
    • By eggbox 28th Nov 17, 10:05 AM
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    eggbox
    [Selling from D1D2 to D2 or D2X.]

    Thank you all who have stayed with this thread, and MSE for facilitating it - and especially the batting away of things like 'trust' issues. (I've read almost the whole thread!) I've certainly learned a lot!

    Presumably one reason that solicitors (or their firms) are wary to help, is because they invariably also act on behalf of the big firm creditors in other cases, and can therefore be 'leant on' (now there's a pun!) to cease and desist such helpfulness to the small guy in all this. Thank you again

    It was touched on a few pages ago, but can we confirm the viability - or otherwise - of the following: [I've edited this to concur with a possible answer found]
    Sole Debtor (and defendant) D1, is in joint mortgage with D2.
    D2 now wants to take on a new mortgage (different lender) with new partner X.
    Can D1D2 - sell - the property to D2X, or as previously suggested, only be added back after X has bought the property alone?

    If only the latter, how swiftly and smoothly can X's conveyancer get D2 back onto the deeds and mortgage alongside X?

    [/I]MB
    Originally posted by MarineBoy
    As Land Registry Rep has confirmed (and as the Judgement you highlight confirms) a Charging Order against Beneficial Interest will only be overreached if a sale is made by two or more owners to a third party. A transfer (for money or otherwise) wouldn't achieve overreaching and wouldn't remove the Restriction.

    But the case does, also, highlight the "flimsy" nature of Charging Orders that can only be registered against the Beneficial Interest of a joint debtor rather than against the legal estate which occurs when the debtor is the sole owner of the property.

    With regard to Solicitors acting for debt collection agencies; its usually a specialised field (Restons, HL etc), therefore, most conveyancing solicitors wouldn't be involved with debt collection agencies?

    What they are involved with, however, is self interest first. So any pressure from an outside source usually sees them crumple worse than a cheap suit in preferance to acting on their, paid, clients wishes.
    • bonfire1966
    • By bonfire1966 1st Dec 17, 2:08 AM
    • 24 Posts
    • 4 Thanks
    bonfire1966
    Things have gone from bad to worse.
    Just when I see the end in sight my conveyening solicitor tells me that the creditors solicitor has applied to have the restriction removal reversed and because of if this it stops the sale of my house as the buyer will insist on this being removed!!
    Please can anyone offer any advise. I was due to complete today and am back to square one!!
    • eggbox
    • By eggbox 1st Dec 17, 8:02 AM
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    eggbox
    bonfire1966

    I think you need to explain how the creditors Solicitor has gone about applying to have the Restriction removal reversed? Especially, as simply making a legal application doesn't automatically guarantee that the application made will be succesful as your Conveyancing Solicitor seems to be assuming?
    • bonfire1966
    • By bonfire1966 1st Dec 17, 8:20 AM
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    • 4 Thanks
    bonfire1966
    Hi Egg box. He has completed a b141 notice of application for alteration of the register.
    • eggbox
    • By eggbox 1st Dec 17, 8:29 AM
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    eggbox
    Hi Egg box. He has completed a b141 notice of application for alteration of the register.
    Originally posted by bonfire1966
    It seems a last throw of the dice to me but I will see if Land Registry Rep can shed some light on how this application can/cannot affect a sale proceeding where you are registered as the 100% legal owner?
    • bonfire1966
    • By bonfire1966 1st Dec 17, 8:31 AM
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    bonfire1966
    Eggbox
    Ok thank you appreciate you help
  • Land Registry
    It seems a last throw of the dice to me but I will see if Land Registry Rep can shed some light on how this application can/cannot affect a sale proceeding where you are registered as the 100% legal owner?
    Originally posted by eggbox
    When an application is made by the owner to cancel an interest from the register we may serve notice onthe beneficiary (creditor) to see if they consent/object. That's what the B141 notice is

    It's not 'reversing' anything but simply saying 'Hang on we don't agree with you removing our interest' and they then set out the grounds for that objection.

    We have to consider those grounds and decide next steps, which could be we disagree and remove it; contact your solicitor to see what they have to now say; or agree and leave it on and tell your solicitor why.

    Next steps, if they have objected, is for us to consider their objection. That will normally be done within a few days of receipt. So the devil is in the detail here so you may have to wait a little longer for it to be resolved either way
    Last edited by Land Registry; 01-12-2017 at 12:25 PM.
    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 1st Dec 17, 12:31 PM
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    eggbox
    Thanks for the update LRR

    Will this action prevent a sale proceeding, however, given the restriction would be overreached anyway as it was, originally, only against the beneficial interest of a joint owner?

    Also, could I ask what your opinion is if the poster in this case hadn't let the cat out of the bag, by contacting the creditor to inform the Restriction had been removed, and the sale would have proceeded as normal? Surely any objection to a Form K Restriction being, previously, removed would be futile?
    Last edited by eggbox; 01-12-2017 at 12:33 PM.
  • Land Registry
    Thanks for the update LRR

    Will this action prevent a sale proceeding, however, given the restriction would be overreached anyway as it was, originally, only against the beneficial interest of a joint owner?

    Also, could I ask what your opinion is if the poster in this case hadn't let the cat out of the bag, by contacting the creditor to inform the Restriction had been removed, and the sale would have proceeded as normal? Surely any objection to a Form K Restriction being, previously, removed would be futile?
    Originally posted by eggbox
    That's always up to the buyer.

    We already understand the overreaching aspect but I don't really follow how we have arrived at the point if a B141 notice on the beneficiary/creditor. If the restriction had been removed as stated then I'd have thought the creditor was applying to put it backoin so IF we were serving notice it would be in the owner, not the creditor.

    As I said the devil is in the detail and I feel some detail is missing here so impossible to apply what ifs and what next scenarios. It would be good to understand the detail from our end to then help make sense of it from OP's perspective.
    Last edited by Land Registry; 01-12-2017 at 2:56 PM.
    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"
    • bonfire1966
    • By bonfire1966 1st Dec 17, 2:38 PM
    • 24 Posts
    • 4 Thanks
    bonfire1966
    Egg box and land registry. Sorry I don't feel that I am being clear as I don't understand these forms.
    I have received from the land registry a B141. The applicant is the creditors solicitor wanting to reinstate the restriction that the land registry removed. The form asks me to either consent or object. I have contacted the land registry and they tell me that the solicitor has applied to get the restriction removal decision reversed and that he has written to them with his case.
    In the mean time much to my shock the house has completed. My conveyancing solicitor has told me that I must still deal with this issue. I firstly plan to object to the reversal.
    Any thoughts please.
  • Land Registry
    Egg box and land registry. Sorry I don't feel that I am being clear as I don't understand these forms.
    I have received from the land registry a B141. The applicant is the creditors solicitor wanting to reinstate the restriction that the land registry removed. The form asks me to either consent or object. I have contacted the land registry and they tell me that the solicitor has applied to get the restriction removal decision reversed and that he has written to them with his case.
    In the mean time much to my shock the house has completed. My conveyancing solicitor has told me that I must still deal with this issue. I firstly plan to object to the reversal.
    Any thoughts please.
    Originally posted by bonfire1966
    Ok - apologies as I clearly misunderstood the B141 reference and that makes more sense as you received it as a result of their applying to register a restriction.

    Your solicitor is right that you need to deal with it as whilst you have completed, the creditor's application presumably has priority

    So you need to focus on the restriction applied for and go from there re any objection or, if appropriate, no objection as you know it will be overreached anyway. And the buyer knows that also.

    Your solicitor is the one you need to rely on here. But eggbox will presumably be able to offer advice also.

    The key will be what happened to the debt in legal terms when your ex sadly passed away. You said you applied to remove a restriction, presumably a form K, and provided lots if evidence. So if they have applied for a form K again presumably that same evidence is the basis of any objection?
    Last edited by Land Registry; 01-12-2017 at 3:05 PM.
    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"
    • bonfire1966
    • By bonfire1966 1st Dec 17, 3:32 PM
    • 24 Posts
    • 4 Thanks
    bonfire1966
    Thanks land registy. Hopefully Egg box will provide further information regarding this issue.
  • Land Registry
    Thanks land registy. Hopefully Egg box will provide further information regarding this issue.
    Originally posted by bonfire1966
    I'd suggest posting some details around the restriction(s) removed/applied for as well as what evidence you supplied to support the original removal.
    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 1st Dec 17, 7:50 PM
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    eggbox
    Bonfire1966

    I think LRR is correct that before any further advice can be given their needs to be an update on how the original Restriction was able to be removed?

    Unless you correct me, I'm assuming you simply applied to the Land Registry to remove the Restriction as the person whom it was against had passed away? If that's correct then it needs to understood why the Land Registry agreed to remove the Restriction?

    My guess is that they wrote to the creditor but didn't get a response (hence the creditors Solicitor surprise when you notified him?) so agreed to remove the Restriction on the grounds the debtor had passed away?

    The good news is that if you've completed I can't see anyway back for the creditor as the original Restriction would be overreached when the sale was made, anyway? So re-instating it wouldn't achieve anything as it would be removed (as overreached) by the sale you've just made anyway?

    But, as LRR states above, it does need your Solicitor to help you object to the application so if they are wavering you need to get them up to speed on overreaching very quickly?
    • bonfire1966
    • By bonfire1966 2nd Dec 17, 8:28 AM
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    • 4 Thanks
    bonfire1966
    To be honest my conveyancing solicitor was useless and literally wiped their hands of this and made me deal with it myself. I have no money to employ solicitors to help.
    I applied to the land registry for the removal of the restriction on the following grounds:
    The death of my ex. Death cert. sent
    The potential repossession of the house. The bank gave me six months to sell and the restriction was causing problems with selling. Letters from the bank sent
    There was not enough money to pay the charge on completion of the house. Original charging documents and offer letter sent.
    I think that was pretty much it. ( sorry my paper work is st a friends house)
    I going off my memory which is poor. If there's more to add I will later.
    I think I've understood "over reaching" but can you just put this term in laymans language for me please.
    • eggbox
    • By eggbox 2nd Dec 17, 1:30 PM
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    eggbox
    No great surprise about the Solicitor jumping ship it just backs up the self interest opinion.

    In simple terms overreaching means that when the sale of a property is made by two or more owners (or trustees), then any beneficial interest in the property (in your case the creditors charging order debt) is transferred from the property and, instead, becomes an interest in the money paid for the property.

    I doubt the reasons you gave the LR would have been enough, on their own, to remove the Restriction (but I'm sure LRR will correct me on that if I'm wrong) so the LR must have had another reason which made them decide removal was the correct thing to do?

    Finding that out may well be in your interests as if they have written to the creditor and received no objection to removal they shouldn't have a leg to stand on?

    And "reversing" the decision to remove the Restriction doesn't make much sense, either, as it would have been removed, through being overreached, anyway by a simple notification to the creditor the house was being sold?

    So I would object to the Restriction being "reversed" for the above reason (hopefully LRR may be able to assist with wording on that when you respond?)

    Can I ask, as you say you've "completed" if you have received the funds from the sale, yet?
    • bonfire1966
    • By bonfire1966 2nd Dec 17, 4:51 PM
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    bonfire1966
    Hi Eggbox. No funds as yet. Think it will be next tues/weds. That only because I had to pay to get it sooner !
    I understand "over reaching" now.
    I have spoken with the land registry at length. One went through the case with a friend whose being helping me. They told us that my case when to the highest level of lawers within the LR.
    I have no idea if they contacted the creditor. Would it be the solicitor or the creditor they would contact. I am aware through paper work found at the house that the original creditor is also deceased.
    Regarding the funds it is my intention to put half in a separate account so should they still have a claim at least I have the beneficial interest that my ex had.
    • eggbox
    • By eggbox 2nd Dec 17, 5:20 PM
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    eggbox
    If you have anyone you can trust put your funds in a joint account as any application to retrieve the debt can't be taken under a third party debt order on a joint bank account.

    If the creditor is deceased do you know who the Solicitor making the application is working on behalf of?

    I'd be interested to know LRR view that your case went to the "highest level of lawyers". I'd be surprised if that was the case

    The simple matter is that if you get the funds into your account its nigh on impossible for a creditor to get them back if you act "sensibly". The new purchasers also wouldn't have any problems due to the charging order being on the beneficial interest which has now left the building (as Elvis would say?)

    So I'd sit tight for a day or too and wait and see if the funds are, actually, paid to you. Once they are then you just act "sensibly" as I've said.
    • bonfire1966
    • By bonfire1966 2nd Dec 17, 6:32 PM
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    • 4 Thanks
    bonfire1966
    Egg box.
    Thanks very interesting advice. Yes I certainly do have people I trust.
    The original debt was for goods provided to my ex. Sadly the creditor allowed my ex to purchase good in good faith. He never got paid the first time nor the second but went onto provide goods on approx 6 occasions, doesn't make good business sence to me!! Any how I beleive his family are now persuimg the debt on his behave.
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