Charging Order? The myth

eggbox

Hi LRR

I was referring to over-reaching with regard to Enterprise selling the property, but can I ask what power any objection carries (from the creditor?)

Land_Registry

Thanks eggbox - all depends on the grounds for the objection and the evidence submitted. We obviously have the CO details from the original entry/submission.

One of the benefits of the form K restriction is that it is clear (or should be) as to how they are overreached in the circumstances as discussed. Under the 'old' caution method there is a due process still to follow but the outcome is not so clear.

eggbox

Thanks LRR

The obvious objection I was thinking of is that the debt the Caution is notifying hasn't been settled?

And I think you have explained before (so apologies for re-asking!) but what was the underlying reason for the "Caution" notification being replaced by the Form K Restriction?

Land_Registry

That would be an obvious objection and it sounds as if Enterprise is unable to show that it has. One for them and the creditor to unravel somehow although the emphasis would be on the debtor to prove their case I suspect?

Cautions were inherently 'clumsy' for protecting interests as much for those involved as they were for Land registry in processing applications to do with or affected by them.

The LRA 2002 sought to make things simpler on a number of levels and not just for cautionable interests. The form K, to my mind is a much better way of handling the situations the form K is there to protect.
And to my mind a much clearer way for the debtor to understand the COs impact on the legal title

So the replacement idea came from the much wider ideal behind the LRA 2002 which was essentially the first major review and overhaul of the registration practice since 1925

eggbox

Land_Registry_representative wrote: »

That would be an obvious objection and it sounds as if Enterprise is unable to show that it has. One for them and the creditor to unravel somehow although the emphasis would be on the debtor to prove their case I suspect?

But would the Land Registry be prevented from registering new owner details if the creditor objected on the basis their debt hasn't been paid off?

Land_Registry_representative wrote: »

The form K, to my mind is a much better way of handling the situations the form K is there to protect. And to my mind a much clearer way for the debtor to understand the COs impact on the legal title

I have to, slightly, disagree with you here; the Form K probably is much clearer for the Land Registry (and who understands the new rules) but as this thread highlights; many Solicitors don't understand the difference between a CO made against solely or jointly owned property and treat a Restriction the same as an equitable charge?

Therefore, the debtor is often told the wrong information (when using a Solicitor for conveyancing when selling) about how a CO impacts on the legal title when it can only be protected by a Restriction if the situation is joint owner/sole debtor?

Land_Registry

eggbox wrote: »

But would the Land Registry be prevented from registering new owner details if the creditor objected on the basis their debt hasn't been paid off?

Not necessarily as they may consent and ask for the caution to remain - unlikely though in the type of cases you see raised here

I have to, slightly, disagree with you here; the Form K probably is much clearer for the Land Registry (and who understands the new rules) but as this thread highlights; many Solicitors don't understand the difference between a CO made against solely or jointly owned property and treat a Restriction the same as an equitable charge?

Therefore, the debtor is often told the wrong information (when using a Solicitor for conveyancing when selling) about how a CO impacts on the legal title when it can only be protected by a Restriction if the situation is joint owner/sole debtor?

Views are always subjective but I mentioned it simply as under the caution style approach you were simply bounced straight back to the charging order and understanding it's impact. Under the form K scenario and a transfer by two or more people on sale scenario the form K restriction makes it clear as to what is required from a registration perspective.
And it's not solely a question of understanding the 'rules' from a registration angle but understanding how such debts are handled and viewed by the courts and the CO Act

I agree based on this thread alone there are multiple concerns/issues of the sort mentioned. However I think it would be wrong to suggest that there is no accurate legal advice or understanding out there as a result.

And as far as overreaching is concerned and/or how a debt affects sole/joint ownership it is the law around COs and beneficial ownership which is the initial focus albeit that the outcomes then transfer to the legal ownership and registered title.

Is there another and perhaps better way to cover such things from a registration angle though when the interest is not related solely to land/property?

eggbox

Land_Registry_representative wrote: »

However I think it would be wrong to suggest that there is no accurate legal advice or understanding out there as a result.

It would wrong to suggest the above; but it wouldn't be wrong to say there is a huge quantity of conveyancing professionals that simply do not understand the new rules.

I suppose I'm just confused as to why that is?

Land_Registry

eggbox wrote: »

It would wrong to suggest the above; but it wouldn't be wrong to say there is a huge quantity of conveyancing professionals that simply do not understand the new rules.

I suppose I'm just confused as to why that is?

There's always a flip side to such things and in my view that is largely down to the complexity of th law around personal debt and how it can affect property ownership in different ways if you are a sole/joint owner - that's not a land registration issue though for reasons already stated.

It would be interesting to get the view of some debt professionals on the issue and their own understanding of the reality out there. I know there are a few on MSE although to date I have not seen them joint your thread?

DAKOTA45

I have to, slightly, disagree with you here; the Form K probably is much clearer for the Land Registry (and who understands the new rules) but as this thread highlights; many Solicitors don't understand the difference between a CO made against solely or jointly owned property and treat a Restriction the same as an equitable charge?

Therefore, the debtor is often told the wrong information (when using a Solicitor for conveyancing when selling) about how a CO impacts on the legal title when it can only be protected by a Restriction if the situation is joint owner/sole debtor?

Me too… imagine the confusion when I try to sell and have to notify not once but twice.


I think it's barmy that a judgement creditor can quite easily apply to modify a restriction without any just cause, by saying the Form K restriction is "not fit for purpose as it does not protect the JC's interest"… They can make it up as they go along, with the courts just rubber stamping them without any thought about how complicated it makes things for the debtor. I think it makes a laughing stock of LR rules and regulations in that they can so easily be dismissed.

'Charging Order, the Myth?' But what exactly IS the myth….?

eggbox

Land_Registry_representative wrote: »

in my view that is largely down to the complexity of the law around personal debt and how it can affect property ownership in different ways if you are a sole/joint owner

If you are paying for a professional service; the very least you should expect is for that professional to be up to speed on new rules that affect their profession? (and this also applies to "overreaching" where I have, frequently, come into contact with conveyancers who argue against the LR's own Practice Guides simply saying it doesn't apply in the situation discussed on this thread?)

Land_Registry_representative wrote: »

It would be interesting to get the view of some debt professionals on the issue and their own understanding of the reality out there.

Unfortunately, there are similar problems here as so called "debt professionals" often have no clue regarding the CO distinctions regarding a Restriction and Equitable Charge, either.

I'm certainly not laying any blame for this ignorance at the door of the Land Registry, but it does seem strange that the LR rule changes seem not to have been grasped and understood by the very professions that deal with them day in day out?