Charging Order? The myth

joan1920

I am really confused if what you are saying is true then how come when I made enquiries to the land registry was told I could not prevent the sale of the property despite having a charge on it and that I had to sign documents releasing the charge in order for the completion to go ahead ? who is culperable therefore in my loss of the value of the charge placed on the property ? is it Land Registry, the solicitor acting for the purchaser,had I known that I could have prevented the sale from going through in order to keep my interest in the property then I would not have signed the said documents so who do I hold responsible and is there anything I can do now to counteract this and get money back from the lender who sold the property? I would be very grateful if you could tell me how to do this I lost over £30,000 because the house was repocessed by the bank and sold at auction and the mortgage was not even met nor indeed my charge thanks in advance

joan1920

Dear EGGBOX it was the land registry who told me I could not prevent the sale from going through and it was also the estate agents acting for the purchaser of the property that also confimed this that is why I had no option but to sign the documents the sale would have gone ahead regardlessas the bank held the highest charge that out weighed my charge I hope this helps

eggbox

Hi Joan, we may be at cross purposes here? I was asking LRR regarding Charging Orders made on "solely owned" property (this thread is primarily about CO's made on "jointly owned" property. )


In "solely owned" circumstances the CO attaches to the legal estate and acts similar to a mortgage - where a CO is made against a debtor who "jointly" ownes property any CO can only be made against his "Beneficial Interest" (or share of any equity in the property).


Was the CO you had made against a debtor who owned property jointly or were they the sole owner?

Land_Registry

eggbox wrote: »

LRR

If a sole owner is selling his property with a Charging Order attached but the value of the sale, either, doesn't cover the whole of the Charge amount or leaves nothing at all to pay towards the Charge amount (after other higher priority Charges are settled such as the mortgage); does the CO terms give any power to the Charge Holder to block the sale?

The simple answer is that I do not know as that is not something that Land Registry would be involved in or aware of.

However if the property was sold with say for example a Unilaterl Notice registered with regards the CO then we would leave it on the register unless an application was received to either remove it (beneficiary) or cancel it (seller). It would not be automatically removed in the same way as say a form K restriction might be when overreached.

In my experience such matters are resolved by the seller's solicitor prior to the sale being completed so any issues around the CO are resolved and the required form is lodged for it's removal.

However such experiences are invariably where there was enough money accrued from the sale which obviously makes the path a much smoother one for both seller and buyer.

joan1920

Hi eggbox inanswer to your question the property was solely owned but in the event it is jointly owned then it is my beleif that a joint several liabilty can be enforced whereby both parties are responsible for the charge on the property as it was the property it was placed on not one peticular individual this would be something you have to get clarified by someone more informed than myself but if I am right whether the joint owners of the properties still reside at the address concerned they are both culperable for the debt and therefore the chargee could impose an order for the property to be sold in order for them to realise their debt on the property again only my opinion but think you need to make enquireies to the relevant people who are more clued up than I hope this helps

Land_Registry

joan1920 wrote: »

Hi eggbox I will answer your question as this happened to me I had a second charge on a property there was insufficeint funds to pay me after the lender had been paid infact there was a shortfall to the lender I tried to prevent the sale from taking place but was told that I had to release the charge as it was only a second charge and the Bank had the main charge so inanswer to you question NO anybody who has a charge on a property cannot prevent the sale from going ahead I am so pleased to be a member of this site it is very informative:rotfl:

joan1920 and eggbox - I suspect that in this case the second charge was in fact a registered charge and that the sale was a repossession by the Bank with the first charge (mortgage)
In those circumstances any later (2nd, 3rd.....) registered charge would be removed automatically on sale and notice would be served on the charge holder accordingly.

I may be completely wrong though as joan1920's reference to second charge may mean something else of course

joan1920

LRR I had a unilateral notice which covered a tenancy aggreement for a 5 year period and after two years was advised by solicitor to have a CH1 placed on the property which I did the house was put up for sale by the mortgage lender via a reciever and I had to sign a form to get the charge removed in order for the sale to proceed I contacted the land registry who confirmed this also was contacted by the bank of Ireland solicitor informing me that as they were the main charge I could not prevent them from selling the property so are you now saying I was misinformed by the Land Registry and the solicitor acting for the bank? please could you clarify many thanks

eggbox

joan1920 wrote: »

Hi eggbox inanswer to your question the property was solely owned but in the event it is jointly owned then it is my beleif that a joint several liabilty can be enforced whereby both parties are responsible for the charge on the property as it was the property it was placed on not one peticular individual

If the property was solely owned then I think what LRR has just posted is probably what has happened to you.


With regard to a "joint and several liability" that would depend on what the debt was for. It certainly wouldn't apply to a consumer debt in one persons name or a loan of money in one persons name. I do understand, however, that it can be applied to things like rent, water charges etc.


Can we ask what in your particular instance the debt was for?

eggbox

I see answered above!

Land_Registry

joan1920 - I can't really help with specifics here and can't really see how the previous posts imply you had been misinformed.

A CH1 is a registered charge and it operates and/or is dealt with differently to say a Notice or a Restriction on the title.

You also refer to a unilateral notice for a tenancy agreement and the mortgage lender using a receiver so the link to COs, which this thread deals with primarily, seems unclear.

As mentioned your circumstanecs appear quite different and IF the property was sold under the 1st Lender's power of sale then later interests, including your CH1, would automatically be removed as mentioned.

As far as whether you were wrongly advised I would suggest discussing this with the solicitor you used at the time. Land Registry would not have been in a position to provide legal advice but would presumably have explained the sequence of events followed from a land registration perspective only i.e. 1st Lender repossessing and selling property under power of sale = later interests, inc your charge and UN, being removed automatically.

Any issues you have with the communication you received from the 1st Lender's solicitor should of course be taken up with them although they may have simply been referring to the same aspect, namely that the first registered charge takes priority in such cases.