Charging Order? The myth

Land_Registry

wembley14 - I am hoping to resolve the issue this morning and the local office will then respond to cover the points you have raised and advice on next steps from a registration perspective

eggbox

Land_Registry_representative wrote: »

wembley14 - I am hoping to resolve the issue this morning and the local office will then respond to cover the points you have raised and advice on next steps from a registration perspective

It does, perhaps, question if these modifications should be granted by a Court if they can prevent registration of a new buyers registration details?


The dispute is, surely, with the proceeds from the sale of the property between the seller and the Restrictioner and not the legal ownership of the property?


Whilst I fully understand why the Restrictioner is doing what it is it doing, it has to be wrong they can withhold the certificate when they have, without dispute, been notified of the sale?

Land_Registry

The local office have now responded to wembley14 - I'll now try to deal with the general issues raised on here

There are two restrictions, namely a form K and a modified form K. The main difference is that the modified restriction requires the creditor to be notified of the sale at least 14 days prior to that sale and crucially the creditor then has to certify this has happened.

The modified restriction is not commonplace but it can happen and is, as I understand it, authorised by the court as the creditor has demonstrated the need for additional protection re the debt. Why and how this is achieved is not something Land Registry is directly involved in so I have no idea what such grounds are but the order is quite clear.

Clearly, and as already appreciated in this thread, the form K restriction is often complied with; evidence lodged; Transfer registered; and restriction removed as it has been overreached. That is however not mirrored with a modified form K restriction.

The modified restriction would therefore need to complied with, namely that notice is served at least 14 days prior to the sale and the creditor also confirms this through providing a certificate.

Clearly the first part can be demonstrated but if the second part cannot be supplied then a separate application is required which demonstrates how the restriction can be either disapplied or cancelled. How this is applied for is explained in general terms in sections 4.7 and 4.8 of our online guidance

In this example I would perhaps expect an application to be submitted to cancel rather than disapply the restriction but as always it is the legal advice which should be relied upon.

The supporting evidence will always depend on the specific circumstances but for example could include evidence from the court, who after all ordered the restriction to be registered and who may take the view that the debtor has indeed complied with the requirements but is simply refusing to provide the certificate; or evidence that the debt has in fact been paid off from the proceeds of sale.

If the evidence was deemed sufficient then we would then serve notice on the creditor to advise of the application and given time to object. Confirmation that the notice was served at least 14 days prior to the sale would, on it's own, not be sufficient.

eggbox - in answer to your last post it seems clear that the order can prevent registration of the sale as explained above.

Whilst the dispute is invariably over the proceeds of sale the fact that the court agreed with the request for additional protection may make it less clear but of course we are not privy to the reasons why such orders have been made and would not be able to offer a view as a result.

On the face of it whilst it may appear wrong that the creditor can then withhold the required certificate I would assume there is some legal redress which can deal with this.

If there is a court process for applying for a modified form K restriction and additional protection then that process presumably deals with later issues re non-compliance etc. This may appear wrong and/or unfair but if that is how the law works then that is how a solution must often be sought. An example of this is where a court orders that a property must be transferred to someone within a certain timescale but the parties then do not comply, they can go back to court and the court may executes the transfer instead.

Reverting back to wembley14's specific situation the next step is to consider what options are available to them (and indeed their buyer who has already completed) regarding not only compliance with the modified form K restriction but it's subsequent removal. The FCA/Ombudsmen route may be one option but as explained above others may exist although I suspect much will depend on what recourse against the creditor is available through the court process for their non-compliance as presumably the 'at least 14 days notice' is intended to trigger some action on their part around the proceeds of sale anyway? Whether that provides any leverage around triggering them to supply the required certificate I do not know?

eggbox

Land_Registry_representative wrote: »

On the face of it whilst it may appear wrong that the creditor can then withhold the required certificate I would assume there is some legal redress which can deal with this.

LRR, firstly, thank you for taking the time to explain so fully what has happened here.


Hopefully, what you say above is correct as it seems unreasonable that, if the Restrictionee has complied with the requirements of the Restriction, the creditor can withhold certifying this has happened?

Land_Registry

Hopefully - I'm sure wembley14 will be back to let us know the outcome as well although it seem slikely it may take a while longer to get what is needed.

wembley14

Hi lrr/eggbox and any one else following this epic saga.
Well i have received further responses from local lr.
They cannot register the transfer unless both restrictions are complied with ie. Two separate (certificates).


Although both are for exactly the same debt and creditor has acknowledged the first one will be overeached but not the second modified one. They refuse to give consent to remove restriction before getting payment. Funny, i thought it was a notification restriction. Not consent one.
I believe my solicitor thought when notifying creditor of sale back in may that he was complying with restrictions, but no , this only applied to first restriction added in title and not the 2nd modified one??. Lr are now saying that my solicitor has not complied with that one, a second notification needed. But my solicitor has already been told by restrictor that they would not give consent anyway regarding that modified restriction.
I have suggested that new owners should apply for cancellation of restriction on their new property using form rx3 because it would be no longer useful or needed as it is stated in my beneficial interest and not on legal title. This is in practice guide 19.
I wonder what has happened to restrictions cancelled without application.
Can events get any murkier, i wonder.!!!!!!!!

harisumo

Hi Eggbox
I've posted on here before, I'm one of those people whose debt with Northern Rock, which has a restriction in my name only on jointly owned property, and was sold off to Marlin.

I've out of the blue received a letter from Marlin's solicitors 'Mortimer Clarke' which is very worrying:

"We are disappointed that you have not responded to our previous letter.
We have explained to you that we have received instructions to apply for a court order requiring you to leave your property so that it can be sold. If we make that application the court will schedule a hearing date. You can oppose the application at that hearing if you wish and it will be for the court to decide whether or not to make an order for sale.
In preparation for that application we will now request a valuation of your property and will contact all those with an interest in the property, including the mortgage holder and any other charge holders.
We ask you that you contact us to discuss your financial position, if you disclose your income and expenditure and put forward appropriate proposals for repayment of the debt then our client would agree not to continue with the order for sale proceedings, however if you do not do this then our client will continue with the application.
We are available ... gives phone number and times."

I have never responded to their letters or received any notification that the restriction had transferred to them, the last I heard was that Northern Rock was still 'administering' all the 'charging orders'.

What do you think, it is very worrying.
Thanks

eggbox

Harisumo


I understand why you are worried but that is what they are after - panic. They have worded it to sound as though they have made great preparations and have the "For Sale" signs ready to go. In truth, it's some spotty herbert behind a computer who's boss has told him to apply some pressure so he's sent out a standard OFS threat letter.


Court figures show (and they know this) that on jointly owned property they haven't an earthly chance of getting an Order For Sale as the reason's why you bought the property (family home) and the joint proprietors rights far outweigh some debt purchaser who has paid less than 10% of your debt.


My ex and Sparklyfairy had a similar letter from another bottom feeder. In my ex's case they accepted a £1 a month and (from memory) less than £10 from Sparkly which shows the strength of what they are threatening.


It's up to you if you offer them anything but, in the highly unlikely event they would spend money on testing this in Court, a Judge is going to let you offer a monthly payment anyway.


Trust me, if they could get an OFS we would see these pages littered with stories of that happening. But there aren't any, so keep your mind focused on the facts and not the threats!

harisumo

Thank you for the reply Eggbox. I've done nothing so far but wonder if I should make some sort of contact with them to get them off my back otherwise they might think they can get away with blue murder. I am not sure what to do though, as I wonder, if I do nothing, what stunt they might pull out of the bag next.

eggbox

If you make contact you must let them know you would defend any OFS with the Case Law (it's in this thread) provided by the MOJ that adds protection to householders from an OFS being granted.


And an offer (even a small one) gives them reason to back off given you will have explained they have no chance of being granted an OFS.


But don't do the bottom feeders work by worrying about "what stunt they might pull out of the bag next" What they can and will do is limited a lot of the time by cost. So they will largely use threats as, unfortunately, the worry they instilled in you gets results for them from many people. Just don't be one that falls for it.