Charging Order? The myth

eggbox

summer33


Firstly, it's understandable that you would find court daunting, but understand the court isn't there to "morally" judge you.


Yes, take a simple list the judge can see of what debts you have and what arrangements are in place. Explain, also, that a CO would prejudice those other creditors who have been willing to help and accept your repayment plans. I would also emphasise that your debt isn't particulary large and a CO could offer your creditor the opportunity to force a sale of your house. This would never happen but it adds weight to how unfair a CO (and the power it potentially has) would be for such a small debt.


As I said, it's a very long shot but you don't get if you don't ask? You also need to ensure you are there just to make sure no interest is added to the debt.

wembley14

hello every one, regarding the problem with the charging order on jointly owned properties and one debtor on the order/restriction. I am currently selling my property and I too have found a solicitor that does not understand the different laws surrounding the orders. he told me that I have to pay the debt of nearly 4k out of sale proceeds.
having read this thread I then instructed him not to do so on completion.
This morning I received a letter that he was closing my files on the sale due to being " unable to come to a meeting of minds regarding your liability to pay off the judgement debt secured by this restriction we are unable to act on your behalf ".
I now don't know where this leaves us as we were hoping to have it all complete by end of the month. We have not heard anything from the buyers solicitors so unsure whether they know the laws about the orders. We are currently looking for a solicitor to help us with the sale. Can Anyone point us in right direction.
Why is this restriction such an obstacle to solicitors it looks quite straight forward when reading through this thread.

eggbox

The thing you must do is to contact your Solicitor and point out to him that unless he explains why he is no longer able to carry out your instructions; then you will have no option to report him to the SRA over his actions in not protecting your best interests (as his client.)


You further add that the "meeting of minds" would be enhanced if he could explain why he wants you to pay off the Charging Order when it isn't attached to the legal estate of the property being sold and, therefore, carries no legal obligation to do so?


You also remind him that there is only a Restriction to be dealt with to allow the sale to proceed; the terms of which only require the Buyers notification to the Land Registry that they have notified the Restrictioner of their purchase.


You add that the Land Registry's own Practice Guide 76, s.5 para 3 warns creditors that a Form K Restriction does not protect a Charging Order made on Beneficial Interest (which you have) and will be overreached, and thus removed, when the sale is made. You politely explain that if there was a legal obligation to pay the CO, only notified by a Restriction, then the Land Registry would not be able to proceed with the disposition.


You finally add that the reason you would have to report him to the SRA is because he is supposed to protect YOUR best interests (as his client) during the sale process and not those of a third party whose payment is of no consequence to him.

wembley14

Thanks for reply eggbox I shall phone solicitor in morning and I will let you know the outcome. It sounds by the letter to me he wants to wipe his hands of my sale. This came after telling him that I was not legally obliged to pay debt out of proceeds. I think he took this as being undermined by my knowledge taken from this thread. just have to look else where. I don't think threatening him with the SRA would be beneficial or do you think otherwise. thanks again.

eggbox

Threatening him with the SRA could, possibly, force his hand on why he is refusing to help? At the very least he needs to offer you an explanation of why he can't (or won't) help as he has agreed to act on YOUR behalf.


Whether you have undermined him or not is irrelevant; he has a duty to protect your best interests as a Solicitor and he is not doing that by trying to pay 4k to a third party interest you have no legal obligation to do so.


That is why the SRA has to be notified if he offers no response.

wembley14

Thanks again for reply eggbox
I would just like to add regarding my restriction order,dated sep 2009 that it states that the "creditor must be given written notice of disposition at least 14 days prior to disposition." This is also quoted as being an effective restriction for creditors when worded in non standard form. Extracted from link given in earlier thread. "WHEN IS A CHARGE NOT A CHARGE". This was wrote aug 2006. Does this mean the LR now accepts the non standard forms which gives the creditor the right to be informed of pending sale and has time to prevent the sale until debt is paid. This maybe why my solicitor is reluctant to progress with the sale. He also said that the purchasers solicitor wants every thing clear from estate before completion.
I'm still waiting for him to call me back for a response.
I'l keep you posted

eggbox

A Standard Form K also requires notification to the creditor of the sale it just doesn't specify a time frame. If your creditor has a 14 day specification inserted it doesn't really make much difference as the Restriction can't prevent the sale and they won't do anything anyway as they will "expect" payment to come through from the sale (due to Solicitors already paying despite not needing to!)


With regard to the buyers Solicitor, they just need to be "educated" too that there is no Charge registered on the estate and they only need to comply with the Restrictions terms to complete the sale. You can tell them to check this with the Land Registry who will confirm they are not prevented from allowing the new registration to be processed as long as the terms of the Restriction are met.


If you check back a few pages on this thread you will see posts from BRIGHTONIAN whose Solicitor was also initially reluctanct. However, you will see that once she looked up the "rules" the sale proceeded and the new owners were registered. In that instance the seller agreed to allow the buyer to withold the amount registered on the CO until the new details were registered at the Land Registry.

wembley14

Just an update regarding solicitor not progressing with sale of my property.


I asked him why he was closing file papers. His response was that he could not as a professional give the buyers solicitor/conveyancer a "written undertaking" that the restriction would be cleared on completion/ exchanging of contracts.


I am now looking for a clued up solicitor who would be able to give the aforementioned undertaking.
He also added that he would be very surprised and intrigued if I did find one and to notify him if successful. My estate agent has said the same.


Has anyone recently been able to do this so I could at least show that there has been precedent set.
Cheers.

eggbox

wembley14 wrote: »

I asked him why he was closing file papers. His response was that he could not as a professional give the buyers solicitor/conveyancer a "written undertaking" that the restriction would be cleared on completion/ exchanging of contracts.

It's a standard response from Solicitors unwilling to get off their ar ses and do research. But you do need to ask him to explain why he can't give a "written undertaking" when i) the terms of the Restriction are easily met by the Restrictioner being notified and ii) the Land Registry will confirm the Restriction will be removed if the sale is for value.


This guy is not going to help you but, to be prepared for your next Solicitor, you need to force answers for the above to understand that there is nothing he can give you to explain what is preventing him from acting as you wish.


My only advice at this stage is to talk to your buyer and their conveyancer to explain what is required and see how they feel? Any Solicitor bothering to look at the facts will see there is no obligation to pay of the CO when a sale is made and the buyers HAVE to be registered when the sale is made as their interests are protected and the terms of the Restriction are over reached.


To repeat again, the interests of the creditor are of no concern for your Solicitor, the buyer and their Solicitor or the Land Registry once the terms of the Restriction has been met.

wembley14

cheers again for that eggbox
I understand all what is being said but these so called professionals and experts of conveyancing obviously don't. i'l just have to keep on searching in hope. The buyer will be gutted that this is prolonging the sale but I wont let the vultures win.
Is there anyway that this could be done without solicitor. DIY ??