Charging Order? The myth

eggbox

The following was sent to me by the MOJ as Case Law that prevented an Order For Sale being granted (although it was actually against a CO being granted) on primary or family homes. But it it confuses me greatly that this government failed to block, either, a CO or an OFS being allowed on "unsecured" loans when, I'm sure, no lender explained the consequences of defaulting when granting the loan?


Caselaw - Royal Bank of Scotland vs. Etridge 2001 - This case established the precedent that, where a joint loan has been taken out by, with a jointly owned property as collateral, such as the matrimonial home, it is incumbent on the lender to explain to all lendees at the time of signing the potential consequences of default. In this case it was ruled that one party had signed the forms without being informed by the lender of the possible consequences and that the Royal Bank of Scotland did not have the legal right to enforce by way of charging order.

terryw

eggbox wrote: »

The following was sent to me by the MOJ as Case Law that prevented an Order For Sale being granted (although it was actually against a CO being granted) on primary or family homes. But it it confuses me greatly that this government failed to block, either, a CO or an OFS being allowed on "unsecured" loans when, I'm sure, no lender explained the consequences of defaulting when granting the loan?


Caselaw - Royal Bank of Scotland vs. Etridge 2001 - This case established the precedent that, where a joint loan has been taken out by, with a jointly owned property as collateral, such as the matrimonial home, it is incumbent on the lender to explain to all lendees at the time of signing the potential consequences of default. In this case it was ruled that one party had signed the forms without being informed by the lender of the possible consequences and that the Royal Bank of Scotland did not have the legal right to enforce by way of charging order.

Just out of interest here is a link to a full explanation to the case you mention. http://www.familylawweek.co.uk/site.aspx?i=ed2288

As regards the second point I have seen references to the law being changed so that a charging order can not be applied for on an unsecured loan. BUT it looks as though this has been shelved. I can't find a link to this after a quick search so I probably read this in a newspaper rather than the net. When I get time I will make a more thorough search for a link

rizla_king

Help? https://forums.moneysavingexpert.com/discussion/4934498

Land_Registry

eggbox wrote: »

Hi LRR I've had a read of the sections you have recommended but I'm still struggling with some of the terminology?


I'll give it another go tonight when I have a bit more time, but to help on that; when I asked yesterday what a "registered" charge was you said it was "a way of securing the payment of money". But it's the "registered" part I needed clarifying. Are there, for example, charges that are not registered or can't be registered? And if so how do they differ from the registered charges.

The term registered charge comes in part from the wording of the entry itself for example, REGISTERED CHARGE date dd/mm/yyyy so always look for that wording to recognise a registered charge.

A registered charge can be called many things such as a mortgage, legal charge, registered charge etc. Not many individuals are able to pay for the purchase of a property outright and so the normal method of funding such a purchase is to obtain a mortgage. The lender (also known as a “chargee” when lending money against the security of registered title) will want security for the money loaned and this usually takes the form of a mortgage on the property purchased.

The purpose of a mortgage is to allow the lender to realise the security i.e. sell the land in the event of the borrower (also known as a “chargor” when borrowing money against the security of registered title) defaulting on the loan. To be fully effective at law and to allow the lender to realise their security, legal mortgages of registered land must be registered, and are then known as “registered charges” (although often referred to merely as “charges”).

Registration as a legal charge is the best form of protection available to a lender but to be a registered charge it has to be

• in the form of a deed
• dated
• charges the property against which you are registering it
• executed by all the registered proprietors
• the name of the borrower(s) agrees with that of the registered proprietor(s).

As you can see a registered charge is therefore quite different from a charging order or other interest with regards it's characteristics

And would a charge on BI, that can only be noted by Restriction, be classed as a registered charge? No - these things tend to be classed as a third party interest in our terminology

Further recommended reading includes the following Practice Guides
PG 19 - Notices, Restrictions and protection of third party interests on the register
PG29 - Registration of legal charges
PG75 - Transfers under power of sale
PG76 - Charging Orders

As you know there are limitations around the advice we can provide , especially in how the law will treat any charge/interest with regards a person's finances/home and so on. Land Registry will often record such information as part of the registration process to ensure interested/affected parties are aware when dealing with registered land/property.

eggbox

Hi LRR


Thanks for the info and the last part does make it clearer. One of the things that was confusing me was reading about the prioroty between certain charges that "later become registered".

But I think you have cleared that up now, thank you.

kanute50

Hi LRR


Can I ask you whether an Equitable Charge is classed as a third party interest, or would it be classed as a legal charge at Land Registry?


I am a Creditor in a Bankruptcy case, and the Equitable Charge is on a property we sold to a Sell and Rent Back Company/Person who was made Bankrupt. It is registered as an Equitable Charge and Restriction and refers to an Agreement dated ***** between Mr. *******, Mrs. ******** and Mr. ********.


Your answer to this question would be of value to myself and many others who are in the same position.

Land_Registry

In general terms this would be seen as a third party interest and not a registered charge, hence the use of the term equitable charge.
Section 8.7 of PG19 refers specifically to equitable charges.
I suspect that the agreement you refer to does not specifically charge the property and hence it cannot be registered as a legal charge.

andy262_2

Although this is my first post I have been a follower of this particular thread for about a year now. I would like to thank everyone that has posted and the reason I have not is due to the fact that I though my questions had already been asked and answered by others and I felt I would be wasting peoples time expecting a reply to something already asked. The reason I am now posting is the frustrating fact I have been strung along by solicitor's who are now adamant I cannot sell my property due to a restriction and after providing information from here and the local land registry who advised my answers will be found in practice guide 19 (which I have read numerous times and quoted to solicitor's) I have now lost my sale. I'm still determined to overcome this I would just like to know either a) how do I convince a solicitor to acknowledge and follow some legislation or b) I will go anywhere in the NW to someone that does understand if someone has a recommendation.

Thanks again to everyone that has contributed to this informative thread and giving us the inspiration that we don't have to be overwhelmed by professionals who tell us something is not possible.

eggbox

Hi Andy262


The first thing to say is don't give up. I think a lot of people who read this board are hugely frustrated at the so called "professionals" who don't understand their own trade and are who are, it would seem, being unneccesarily obstructive through a lack of understanding? Especially, when those professionals are being paid to look after their clients best interests.


Was your problem, however, with your solicitor or the buyers solicitor?

wembley14

Hi everyone
just a quick update about my on going plight of sale of my property. My solicitor sent notification to creditor of pending sale 12th march but have not received confirmation of being notified.


Buyers solicitor is insisting of "certificate" before progressing.
Should mine have got signature from creditor when notifying them. (recorded delivery). should this be sufficient ?.


I have also instructed mine to go down the BRIGHTONIAN route, mentioned earlier in thread. The other side has agreed to this.


I am so glad the buyer has been so patient, as his solicitor has prolonged this sale due to wanting restriction moved from the outset.


I shall keep you all posted.