Charging Order? The myth

DAKOTA45

Land_Registry_representative wrote: »

Whilst a court order in general terms is the trump card I doubt if your example would apply as if a charging order charges a beneficial interest under a trust of land only a restriction can be entered so we would not be noting an equitable charge for example, which I assume is what you mean here.

From our perspective an equitable interest is an interest in, or charge over, land which either needs to be protected by an entry in the register so as to bind a purchaser (e.g. a restrictive covenant or an equitable charge), or can be overreached (i.e. transferred from the property in question to the purchase money obtained by trustees on the sale of the property).

The difference between legal and equitable interests is set out in s.1, Law of Property Act 1925 and I suspect that this is what a court would consider and hence the order you refer to would not arise in a sole debtor/joint owner scenario - not the LR Rules in play here but the LPA legislation and the treatment of legal and equitable interests.

Thanks for this post LRR… although I think my brain has suffered from some sort of burn out due to having to prepare documents for court… I am still a bit confused as I was informed that when two people who are joint owners and one has a restriction against them, then they automatically revert to something called 'Tenants in Common' and that they do not necessarily own 100% of the property.. would this make any difference, do you know?

Land_Registry

DAKOTA45 wrote: »

Thanks for this post LRR… although I think my brain has suffered from some sort of burn out due to having to prepare documents for court… I am still a bit confused as I was informed that when two people who are joint owners and one has a restriction against them, then they automatically revert to something called 'Tenants in Common' and that they do not necessarily own 100% of the property.. would this make any difference, do you know?

Difference to what?

Circumstances such as when just one of joint registered proprietors is declared bankrupt can in effect sever the joint tenancy

A charging order against one of joint proprietors in essence charges a beneficial interest under a trust of land. These cannot be protected by notice hence they usually trigger an application for a restriction as covered in this thread.

As we don't always know what has happened re the beneficial interest this is one of the main reasons why the register cannot solely be relied upon to confirm whether they hold it as tenants in common or as joint tenants.

Perhaps Practice Guide 76 on Charging Orders and Algorithm 2 may help re the difference?

janine74_2

I have noticed that the above post are from 2009 could someone else advice if this information is still up to date as I am in court for a interim charging order in several days

janine74_2

Does the above still apply these posts are from 2009, I am in court for a interim order next week just after as much info as possible

eggbox

Hi Janine

The only thing that has changed since 2009 was the £1000 threshold limit to creditors seeking a CO. Apart from that everything else still applies.

Thrugelmir

jamesd wrote: »

Those who caused the mess weren't bailed out by the tax payer. They defaulted on their mortgages and in many parts of the US are allowed to walk away owing nothing but leaving the mortgage holder with a big loss.

Who funded the loss?

US Government bailed out AIG to the tune of $182 billion alone. Fannie Mae and Freddie Mac were in UK terms nationalised, and drew down of $188 billion of funding. Same principles as the UK.

jamesd

The shareholders funded the loss first. In general they lost all or most of the money they had invested in their ownership interest in the firms. Where our pension or investments were invested in those firms, we are some of those owners who lost money in this way.

Sometimes bond holders may have suffered a loss but that did not happen in the case of AIG. The US government, in the form of the Federal Reserve among other parts, decided that it AIG was too big to be allowed to default on its obligations to bond holders and other counterparties and bailed the firm out with the largest bailout ever granted to a private US company, some $85 billion, in exchange for an ownership interest of 79.9% of the company (meaning the shareholders lost that much of their own value). In addition the NY Fed lent money to take the total to $182.3 billion. The US government exited the last of its AIG bailout in 2012 having made a combined profit of around $22.7 billion on it.

Beyond that, the bailout money has typically been repaid either in full or to a large extent, at a significant profit to the governments involved. Some parts are still being run off, like the Northern Rock loan book and the Lloyds shares but those are expected to be saleable at either a profit or break even. The UK government is likely to exit finally with a profit from its rescue activities.

Overall the substantial losers are likely to be the original shareholders and then anyone caught up in all of the various disruptions that followed even with massive bailouts to present a more extensive collapse than happened.

Northern Rock was one of those side effects, unable to refinance its loans because the events had effectively closed the bond markets to new issuance. So as its loans became due for repayment it used up its cash then failed when it ran out. Unfortunately for NR it had chosen to fund long term lending with short term borrowing, so when the borrowing dried up the business failed. The other way around is safe.

It shouldn't be surprising that bailouts are profitable. They happen at times of extreme low valuations and crisis, when the values of companies are very low, so any recovery is going to produce the potential for significant profits for those who rescued the company, whether it's a government or a private one like that carried out by Berkshire Hathaway.

It's also worth knowing that regulators and governments repeatedly lied to the public about events in an effort to keep the situation under control. That included things like lying about support for banks and a range of other activities. Times of extreme financial stress are one of the times when it is not safe to trust that the information being provided by regulators and governments is accurate. If they think that lying will hep with their mission, they will lie. Whether there is a longer term cost of lying depends on how long it is until the next crisis and how many people remember that in the last one their claims were inaccurate. If enough remember it will harm their attempts at a future stability exercise.

DAKOTA45

janine74 wrote: »

Does the above still apply these posts are from 2009, I am in court for a interim order next week just after as much info as possible

There are recent posts, if you look… are you appealing against the ICO?

I have been through all this and am now challenging the final CO as there were procedural errors when the other side applied for a modification to the original Charging Order...:mad:

I will help if I can… I am no expert, but have learned a bit along the way...

RMS2

To Mr. LRR


I know this is a bit cheeky, but I thought you'd be the man to ask. I paid off my mortgage about three weeks ago and the company said, if your mortgage is after 2003, you'll have to apply for electronic records from LLR.


My mortgage was from prior to 2002, but I've heard nothing, should I expect some paperwork?

Land_Registry

RMS2 wrote: »

To Mr. LRR

I know this is a bit cheeky, but I thought you'd be the man to ask. I paid off my mortgage about three weeks ago and the company said, if your mortgage is after 2003, you'll have to apply for electronic records from LLR.

My mortgage was from prior to 2002, but I've heard nothing, should I expect some paperwork?

RMS2 - much will depend on the lender and how they applied to have the mortgage removed from the register. In most cases it is done electronically and they receive confirmation that it has been done. You would not be notified by us or sent paperwork.

I suspect your lender is really saying that they will apply to remove the mortgage (charge) but if you want to then check the register you can do so either online or by applying by post direct to us.

If you check online then it costs £3 to view/download a copy. I should stress though that the copy, whether obtained online or by post, would not be something to retain as proof of ownership for example thereafter. In the future when you come to sell or remortgage for example any new lender or buyer would obtain their own copy