Charging Order? The myth

Garyich

Thanks again for the help Eggbox

Empower

Hi I am a Community Advocate and whilst I appreciate efforts to reassure members of the public,we must do so accurately.

To answer the question accurately - the answer is VERY EASILY and it can take QUICKER than 2 weeks. This is because ANYONE can apply to the Land Registry to put a UNILATERAL Charge on your property. The Land Register will then serve you NOTICE of this action for you to accept or reject. You accept you need do nothing further but if you object a HEARING will then be facilitated. No Court order in sight.

Of course if anyone seeks to impose a Legal Charge without cause or frivolously, then the legal remedies for compensation can be evoked under civil procedures and if relevant a criminal offence may have been caused eg harassment.

So this is the CORRECT ANSWER and whilst this question is nearer 18 months old, it is important that erroneous information does not help give false or misleading reassurances for future readers.

kookykathryn

HELP!!

[FONT=Helvetica, Verdana, Arial]I own a house with my ex partner and we want to sell. [/FONT]We are getting conflicting advice as unfortunately there is a restriction in place on the title deeds, as below:

[FONT=Helvetica, Verdana, Arial]

25.01.2011) RESTRICTION: No disposition of the registered estate is to
be completed by registration without a certificate signed on behalf of
British Credit Trust Limited or its solicitors that written notice of
the disposition was given to the said British Credit Trust Limited c/o
Blake Lapthorn Solicitors, New Kings Court, Tollgate, Chandlers Ford,
Eastleigh Hants SO53 3LG at least 14 days prior to the disposition (the
said British Credit Trust Limited being the person with the benefit of
an Final Charging Order on the beneficial interest of ........... made by Winchester County Court on 23 November 2010 under
claim number .....) or without a further Order of the Court which
ordered this restriction.

One person has told us we cant sell until the debt is paid, and someone else has said that we can because its only a restriction not a charge. Do you have any further advice on this?[/FONT]

eggbox

kookykathryn

The only power the Restriction has, legally, is for British Credit Trust Limited to be notified at least 14 days prior to the sale going through (as it states in the wording of the restriction)

The Good

There is no legal obligation for you to pay any proceeds directly from the sale if you do not wish to.

The Bad

From the experiences related on this thread you will see the overwhelming majority of Solicitors do not understand this fact and treat Restrictions exactly the same as a Charging Order made on solely owned property. On solely owned property, the Charging Order attaches to the legal estate and HAS to be paid off before the Land Registry will allow the change of registration to be processed (without which the sale could not proceed.)

On Jointly Owned property this is not the case. A sale of the property for "value" the rights of the new owners take precedent over the rights of the Restriction and it is removed as being "overreached".

If you read this thread (look for Brightonian's posts) you will see that a sale has been made without paying the creditor with the benefit of a Restriction. But you have to make sure your Solicitor is vetted and understands these facts to assist you rather than hinder you (as most do!)

kookykathryn

thanks for the advice, my solicitor is disagreeing!

The restriction says we have to have a signed certificate that notice was given, how do I go about getting this?

thanks

eggbox

Kookykathryn

What actually is your solicitor disagreeing about?

The terms of the Restriction are met (as it states) once the Land Registry receive confirmation your creditor has been notified the sale is occurring (which is easily done through signed mail)

The Restriction is intended to remind both parties the debt exists, but it places no legal obligation on the seller to settle the debt from the proceeds directly from the sale. (If your Solicitor disagrees ask him to show you where it is states you are legally obliged to do so)

You should also remind YOUR solicitor he/she is being paid to protect your best interests and not those of outside third party interests.

kookykathryn

My solicitor is questioning the certificate part and that it has to be signed by British Credit trust or the solicitors?

[FONT=Helvetica, Verdana, Arial]RESTRICTION: No disposition of the registered estate is to
be completed by registration without a certificate signed on behalf of
British Credit Trust Limited or its solicitors

thanks again
[/FONT]

eggbox

kookykathryn wrote: »

My solicitor is questioning the certificate part and that it has to be signed by British Credit trust or the solicitors?

[FONT=Helvetica, Verdana, Arial]RESTRICTION: No disposition of the registered estate is to[/FONT]
[FONT=Helvetica, Verdana, Arial]be completed by registration without a certificate signed on behalf of[/FONT]
[FONT=Helvetica, Verdana, Arial]British Credit Trust Limited or its solicitors[/FONT]

[FONT=Helvetica, Verdana, Arial]thanks again[/FONT]

Have a look at post #794 whereby the Land Registry explained the following;

"This means the Land Registry will not register a transfer or charge (for example) unless the applicant for registration (the buyer or their conveyancer) confirms that they have given notice of the transaction to (name of creditor). What the interested parties do at this point, or what (name of creditor) does as a result of the notice is not, of course, a matter for the Land Registry."

I'm unsure why your Solicitor doesn't understand that the Restriction only holds the power of notification to the Restriction holder? it simply means the Land Registry have to have proof the Restriction holder has been notified the property is being sold.

Also tell your Solicitor to look at the Land Registry's Practice Guide 76, Section 5, Paragraph 3 where it states;

"Entry of a restriction does not protect the priority of the interest to which it relates for the purpose of s.29, LRA 2002. A charging order affecting only the beneficial interests under a trust is liable to be overreached along with those interests by the operation of ss.2 and 27, Law of Property Act 1925. Accordingly, a Form K restriction will be usually be cancelled automatically, without application, when a transfer which appears to overreach the beneficial interests is registered."

kookykathryn

great, thanks for this. I shall put it to them and let you know!

kookykathryn

Hi everyone

super confused now, just spoke to land registry directly and they have said that unless the creditor agrees and signs a certificate the restrictions will not be removed!

anyone actually sold a property where its needed a certificate?

thanks