Charging Order? The myth

Land_Registry

A Transfer from the two of you to just one would be caught by the form K restriction - the Transfer would be a 'disposition'. To register the Transfer we would require evidence of compliance with the terms of the restriction in the normal way.

The restriction should remain registered on the title unless an application to cancel or withdraw it was made and registered successfully. It should not be automatically cancelled. Automatic cancellation, as covered previously in this thread, tends to only occur where there has been a Transfer for money by two or more proprietors.

As eggbox has indicated we cannot provide legal advice so if you need to understand the wider implications of completing such a Transfer and it's impact on the charging order and/or creditor's situation you would need to seek legal advice.

eggbox

Land Registry Rep

Thanks for the update. The problem is, however, that the legal advice many people in this position seek is found to be unreliable as there seems to be a widespread ignorance of the differences of how a CO on Joint and Solely owned property is able to be registered at the Land Registry. (Brightonian's case highlights this perfectly but at least his Solicitor had the good sense to look up the facts)

I would like to ask, though, that if the terms of the Restriction are complied with (ie the Restrictioner is notified of the disposition) and a transfer is then allowed; why is the Restriction then not automatically cancelled by the Land Registry given the Charging Order it relates to is on a Beneficial Interest that no longer exists?

Land_Registry

eggbox - because there is no evidence that it has been overreached and the onus is on others to demonstrate that the interest has been overreached.

I think I may have explained before that the land register's primary focus is the legal ownership and not the beneficial one.

A form K restriction protects an interest under a trust of land and a Transfer from two to just one of them and for no money does not satisfactorily indicate that the outgoing party's interest in the title has come to an end.

Distracted

Thanks for the replies.

If I was to remove my wife's name from the land registry before this interim order is put in place then surely there would be no restriction (if that was possible in the time frames)

If I was to take my wife's name off the registry an comply with the terms ie inform them of the change an yet the restriction you tell me would stay in place, could I not exchange a nominal fee with my wife to effectively buy out her share of the property, thereby lifting the restriction.

I really need to move fast on this.

eggbox

Land Registry Rep

Thanks for that as its a really useful explanation. It does, however, beg the question that if there has been a "legal" transfer of ownership from one person to another, why the Land Registry would/could not accept that as being a satisfactorily indication of the end of the outgoing parties interest in the title?

Unless I'm mistaken, if a house was to be sold after a transfer had occurred, then the person who had transferred their equity would then have no "legal" claim on any sale proceeds. Also, as you state the LR is a focus on the "legal" (and not the beneficial) ownership of a property; does not a "legal" Transfer of Ownership force the LR to accept the remaining owner as the only legal holder of title regardless of any beneficial interest? (meaning the Restriction has to be overreached under these circumstances as it forced to accept the outgoing partner has no legal interest in the property?)

Land_Registry

eggbox - how do you know that 'the person who had transferred their equity would have no legal claim on any sale proceeds'?

I am not too sure where 'forced' comes into play here.

Rule 99 of the Land Registration Rules 2003 states 'when registering a disposition of a registered estate, the registrar must cancel a restriction entered for the purpose of protecting an interest, right or claim arising under a trust of land if he is satisfied that the registered estate is no longer subject to that trust of land.'

Where a Transfer for no monetary value is the disposition then it is often the case that no evidence is supplied to demonstrate that the trust has come to an end. If it has then the owners simply apply for the restriciton to be removed and supply evidence to prove that point - it is not as clear cut as you suggest.

eggbox

Land RR
Because I was assuming that a person transferring their equity was transferring their legal ownership too? (as far as the "Law " is concerned.) I was also assuming that if it was legally transferred the LR would be "forced" to register that fact? (I stand to be corrected on this, however!)

I was also under the impression the LR only haz to register who the legal owner/s are; and not a body who had to take into consideration any unregistered claims?

Land_Registry

I go back to the point of how do you know that they are transferring their equity in such circumstances? - I don't think it is as clear cut as some imply.

If the legal title is transferred using form TR1 then the Registry is required to register that Transfer but any registered interests have to also be taken into account when doing so.

If an interest is registered that precludes their ability to Transfer the title then we are, to use your teminology, in effect 'forced' not to register it - I suspect though this is really moving away from the main point of concern, namely the charging order and it's impact.

The key point is that if the register is in joint names and then reduced to one by virtue of a Transfer not on sale we are only aware that any element of truust has ended IF we are informed. This is exactly the same applicaiton as for say a severance of joint tenancy where a Form A restriction is registered.

The land register provides information on the legal ownership and any registered interests. In some cases we can account for and remove such interests as certain changes occur. But in many cases it is for those with the benefit of or who are subject to those interests to demonstrate how they have come to an end or in the case of a form K restriction been overreached.

In the latter's case I imagine this is important for both the debtor and creditor as the legal title is just one aspect that is considered when it comes to such things.

Distracted

Just an update, been to see the mortgage advisor and they have told me that I will be unable to do a transfer of equity and she has now alerted the mortgage lender (c&g) of the situation and put mark on my file.

I now can not see a way to avoid this, it's bitterly hard pill to swallow. After everything that I have worked for I have now resigned to having half of it to be taken away when I sell my property.

eggbox

Distracted wrote: »

. After everything that I have worked for I have now resigned to having half of it to be taken away when I sell my property.

If you do read this thread properly you will see that doesn't have to be the case.

As a precaution, there is still nothing stopping you from deciding to become Tenants in Common and apportioning the ownership percentage share heavily in your favour.

I'm saying this for your own good; but you need to stop worrying and, instead, read up on the facts of your situation and understand how those facts help prevent you losing that half when the time comes.