Charging Order? The myth

Keaton_2

Evening All

I have now had an official response back from Halifax Customer Service Team as follows:

"I have spoken to Optima about this matter. They confirmed that HFC Bank have a Charging Order Nisi from March 2012. It is registered at the Land Registry as a caution instead of a Second Charge. In the event of your property being repossessed, HFC Bank would have first priority on the proceeds of a sale. It is not possible to alter this, as the caution would be dated before our new charge from the remortgage, and the Land Registry looks at such matters in date order. We cannot change this with a Deed of Postponement as it is not a Second Charge. We are unable to agree to the remortgage unless the loan is redeemed.

If you remain dissatisfied with our decision, you may refer your complaint to the Financial Ombudsman Service.

Can LRR or someone else provide any information as to whether Halifax are right in that HFC would have first priority and also whether Land Registry Looks at these matters in date order?

Would appreciate any advice/information.

Many Thanks

DAKOTA45

Keaton wrote: »

Evening All

I have now had an official response back from Halifax Customer Service Team as follows:

"I have spoken to Optima about this matter. They confirmed that HFC Bank have a Charging Order Nisi from March 2012. It is registered at the Land Registry as a caution instead of a Second Charge. In the event of your property being repossessed, HFC Bank would have first priority on the proceeds of a sale. It is not possible to alter this, as the caution would be dated before our new charge from the remortgage, and the Land Registry looks at such matters in date order. We cannot change this with a Deed of Postponement as it is not a Second Charge. We are unable to agree to the remortgage unless the loan is redeemed.

If you remain dissatisfied with our decision, you may refer your complaint to the Financial Ombudsman Service.

Can LRR or someone else provide any information as to whether Halifax are right in that HFC would have first priority and also whether Land Registry Looks at these matters in date order?

Would appreciate any advice/information.

Many Thanks

HI KEATON….

The problem seems to be with Halifax and their old/new system… Do you owe HFC a lot of money? If not, could you ask Halifax to lend you the amount to redeem the HFC loan & add it to your mortgage?

DAKOTA45

DAKOTA45

Keaton wrote: »

Evening All

I have now had an official response back from Halifax Customer Service Team as follows:

"I have spoken to Optima about this matter. They confirmed that HFC Bank have a Charging Order Nisi from March 2012. It is registered at the Land Registry as a caution instead of a Second Charge. In the event of your property being repossessed, HFC Bank would have first priority on the proceeds of a sale. It is not possible to alter this, as the caution would be dated before our new charge from the remortgage, and the Land Registry looks at such matters in date order. We cannot change this with a Deed of Postponement as it is not a Second Charge. We are unable to agree to the remortgage unless the loan is redeemed.

If you remain dissatisfied with our decision, you may refer your complaint to the Financial Ombudsman Service.

Can LRR or someone else provide any information as to whether Halifax are right in that HFC would have first priority and also whether Land Registry Looks at these matters in date order?

Would appreciate any advice/information.

Many Thanks

HI KEATON…

Just asking why is the HFC debt registered as a Caution? Was this in place before April 2003?

Can LRR confirm that Cautions were no longer to be used after April 2003 (Land registration Act 2002 and Land Registration Rules 2003), please?

DAKOTA45

Hi LRR…

I found an article which appeared in the Property Law Journal a little while back which wrote;

'The land registration Rules 2003 prescribe a number of standard restrictions for use in common situations. Applicants can still apply to register "non-standard restrictions", but the Land registry will refuse to register a non standard restriction if a standard restriction is appropriate, or if the terms of the non standard restriction are unreasonable or are such that the Land registry would find it difficult to ascertain whether an applicant for registration had complied with the terms of the restriction.'

This seems all wrong.

I am still having trouble with the fact that a DJ (possibly with little knowledge of LRR) has just rubber stamped the creditor's application without any thought as to whether it complies with LRR, and then LR must comply because the court made the decision.

Land_Registry

Keaton wrote: »

Can LRR or someone else provide any information as to whether Halifax are right in that HFC would have first priority and also whether Land Registry Looks at these matters in date order?

Would appreciate any advice/information.

Many Thanks

Keaton - from purely a registration perspective then if the HFC registered charge was registered before the caution then it would have priority. From our perspective this means that should HFC repossess and transfer the property under a power of sale then the caution entry would be automatically removed from the register and the cautioner duly advised that had happened.

If that is what HFC mean by our 'looking at these matters in date order' then that is correct. The reason I add this caveat is simply because how the 'repossession cake' is sliced and apportioned is not something we are directly involved in as we deal with the registration process which then follows on from any Transfer under a power of sale.

Our online guidance re Transfers under a power of sale (section 2) explains this in more details

Land_Registry

DAKOTA45 wrote: »

HI KEATON…

Can LRR confirm that Cautions were no longer to be used after April 2003 (Land registration Act 2002 and Land Registration Rules 2003), please?

That is correct in so far as no new cautions could be registered after the date the new Act came into play. If the caution was already registered then it would remain so.

Land_Registry

DAKOTA45 wrote: »

Hi LRR…

I found an article which appeared in the Property Law Journal a little while back which wrote;

'The land registration Rules 2003 prescribe a number of standard restrictions for use in common situations. Applicants can still apply to register "non-standard restrictions", but the Land registry will refuse to register a non standard restriction if a standard restriction is appropriate, or if the terms of the non standard restriction are unreasonable or are such that the Land registry would find it difficult to ascertain whether an applicant for registration had complied with the terms of the restriction.'

This seems all wrong.

I am still having trouble with the fact that a DJ (possibly with little knowledge of LRR) has just rubber stamped the creditor's application without any thought as to whether it complies with LRR, and then LR must comply because the court made the decision.

The devil remains in the detail but only the court will have such detail as mentioned previously, hence the need to obtain copies/details of what was submitted to us and to then query (if appropriate) with the court for example.

If a court ordered that such a restriction be registered then that is what we have to do. Section 46 of the LRA 2002 refers.

The Property Law journal extract is I imagine referring to the general approach to standard and non-standard restrictions only and not COs specifically so should be read in that context.

Keaton_2

Morning All

I am a little confused so i'll write things down as is on the Copy of register of title:

Under the Charges Register Section C -
a. Registered charge dated November 2009.
b. Proprietor - Bank of Scotland of Halifax division November 2009

Under Proprietor Register Section B
a. Proprietor - Me and missus November 2009
b. Transfer to the proprietor contains covenant to observe/perform covenants referred to in Charges Register November 2009
c RESTRICTION - No disposition of the registered estate other than a disposition by the proprietor of any registered charge registered before the entry of this restriction is to be registered without a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to HFC Bank at Rest0ns Solicitors being the person with the benefit of an interim charging order on the beneficial interest of ME made by County Court March 2012.

So as I understand it because of the new computer system Halifax can't simply switch me to a new product.

They need to redeem the existing mortgage and then create a new one.

The new one - although with the same company - Bank of Scotland Halifax division would then be registered after HFCs Restriction.

This means that if they ever had to repossess HFC would have first dibs on any money so Halifax won't take that risk.

Have I understood correctly?

Thanks

Land_Registry

Keaton - it reads as if you have understood it, yes.

The existing registered charge would be redeemed and a new one registered. The registered on date for the new charge would then be later than the existing restriction.

You would also have to comply with the restriction and notify HFC as the new charge would be a 'disposition'

How the monies are apportioned following a repossession is not something we cover but experience of reading other online material suggests the 'first dibs' aspect is correct

Note - in your OP you mentioned it was a caution but it is a restriction you now refer to although from a registration perspective that make no obvious difference in light of the context of your post

Keaton_2

Not the news I was hoping for.

I'll try the ombudsman as a last resort and argue that because they have changed their computer systems we are being treated unfairly and forced to stay on their SVR.

Many thanks to everyone who responded.