Charging Order? The myth

Sparklyfairy

Ooh Help, just add a few more posts with "bump" in the title until you can add the link...failing that, can you add the link like landregistry(dot)org or something like that as I can't see or find that link...

helpappreciated

It is

http://

www1.landregistry.gov.uk/

upload/documents/pg19.html

fatbelly

I think this is the link:

http://www.landregistry.org.uk/upload/documents/pg19.html

Sparklyfairy

Ok, I seriously need to get a life! But I found this from the above link:

4.7.4 Restrictions cancelled without application
We may cancel a restriction without any application being made if it is clear that the restriction has become superfluous (paragraph 5(d) of Schedule 4, LRA 2002). The following are examples of where we might cancel a restriction automatically.

*Where we register a transfer under a power of sale by the proprietor of a registered charge whose powers were not affected by the restriction.

It's really late..and again I could be wrong here..but doesn't this agree with what eggbox & blueback have been saying all along - that it falls away upon completion? Any thoughts here?

eggbox

Sparklyfairy

I agree and for whatever reason the LR rules were changed in 2003 I cannot yet find?

However, changed they were and the changes do now mean a Restriction cannot prevent a change in the LR details (and therefore the sale of a property) as long as the terms of the Restriction have been complied with by the seller.

Going back to my earlier discussion with the LR Solicitor, she would have had no choice but to inform me that the LR couldn't alter the LR details until a debt related to a Restriction is paid if that was part of the requirement of a Restriction being removed. She did not do this as, I can only conclude, there is no such requirement.

Reading the Land Registry guidelines (Helpappreciated post 184) that says;

This restriction means that no disposition of 55 High Street can be registered other than a disposition by the proprietor of any charge registered before the restriction, without notice first being served on John and
William Smith which will give them the opportunity to recover the debt owed by Mr Brown.
Once the debt has been paid Mr and Mrs Brown can apply in form RX3 for the restriction to be cancelled. Notice of the application will be sent by Land Registry to John and William Smith. Alternatively John and
William Smith (as restrictioners) can apply on form RX4 to withdraw the restriction.

the key word is "opportunity". To me, that means a Restriction is no more than a flag in which the Restriction holder gets notification that the property is being sold and can act accordingly to recover it's debt. (even the Inland Revenue on their site states their is no obligation on a debtor with a Restriction to pay the creditor when they sell up.) The rest of the statement, in my opinion, is misleading as it only deals with how a person can remove a Restriction when they aren't moving from the property. Its not relevant. or necessary, if MR & Mrs Brown are selling up and and are moving on.

As the Form K Restriction also places no time limit for notification to be made to the Restriction holder; then I can see absolutely no problem, legally, with selling your property and getting the Restriction removed by notifying your Creditor at the very last moment.

This, obviously, doesn't remove the Court Judgement and Creditors will then have to find another way to chase their money. But that, as they say, is their problem not yours!

Rayp

Many thanks to all with regards to this thread. I'm a newbie and not really used to forums so please stay with me here.
My circumstances are as follows. I have a section k restriction logged on my LR, after 2003 which rendered the restriction useless
as prior to 2003 14 days notice was stipulated and indeed though unlikely, was possible for the charge to be enforced.
The restriction states that the lender has to be informed and as far as I am concerned as long as that is done everything is legal.
The restriction is still is in my X wife name and I am to consult with a solicitor on Monday to see if they are clued up on restrictions.
I will take the relevant posts from here to discuss, but I am more than convinced restrictions are useless.
Thanks for info gained, I will keep you informed. It would be nice to get a template letter which has to be sent also.
Rayp

Sparklyfairy

That's great work, egg - I know we all really appreciate all your input here :beer:

Helpappreciated, it will be virtually impossible for you to find something from the LR in black & white that explains why Restrictions aren't worth the paper they're written on - hence why it's a loophole - to show your solicitor..frustrating I know..

How do we find out if we have a Form K Restriction? On the LR website? My paperwork for mine doesn't seem to have it listed anywhere & I had it granted at the end of Nov 2010.

helpappreciated

Well we are not getting anywhere with our current solicitor who just keeps repeating that everything must be paid off - even though he cannot point to anywhere this is written.
We are seeing another solicitor on Monday - who straight away knew the difference between charges & restrictions. Will keep you posted.
If you read through all the different types of restrictions on the LR site you can see if yours is identical to Form K:)

eggbox

Sparklyfairy

You can check with the LR what your Restriction says but it will cost a search fee (not sure how much?)

However, as Form K is used for Charging Orders affecting "Beneficial Interest" it's a safe bet you have this type of Restriction on your LR details.

terryw

Sparklyfairy wrote: »

Terry when I originally heard about this link I thought of that - but I after reading it, these solicitors are wanting to change the current law regarding restrictions...so I'd give calling them a miss personally...

Sparky, I agree with you to large extent here. But :

I have probably been brainwashed over the years by the legal propaganda that a solicitor always does the best for the client regardless of his personal feelings, and I would doubt very much that any solicitor would turn down work regardless of his personal feelings, but I might be being unfair on the second point.

If some MSE person is having difficulty is finding a solicitor who understands this, then it might be worth a phone call or email purely to ask for their fees to deal with the conveyancing.

bw