Charging Order? The myth

Land_Registry

DAKOTA45 wrote: »

The previous mention, if I recall correctly, was the part of this thread which referred to the 'modified' form K restriction and how important the court order is in having that one registered. In such cases if the court orders that it is entered then that is what we have to do.

But does the creditor have to make an application to LR for their permission prior to getting a court order?
The way I understood it was that is only if LR refuses permission that the creditor can then make an application to the court to overrule any refusal by LR… But this certainly didn't happen in the case of my modified restriction, where the creditor went straight to the court without consulting LR prior to doing so.
Yet in its rules, LR is emphatic that it wouldn't allow a modification unless it deemed it necessary…

*Confused*

We are not involved in the court process so no, the creditor does not have to make an application to us for our permission to then go to court to obtain a modified court order.

If you look back at the original posts around your circumstances you should find that the process is explained and the only time we might 'refuse' as you suggest is if the court order does not specifically direct us to enter the modified form of restriction in the register.

eggbox

Thanks LRR can I just ask,

Land_Registry_representative wrote: »

If the restrictions are complied with in that way then the Transfer can be registered but the restrictions are not overreached so remain in place.

As the Restrictions would obviously be "superfluous" (as the property no longer holds any "Beneficial Interest" against which the CO was made) why would the LR not automatically cancel them?

and

Land_Registry_representative wrote: »

As already suggested an application to cancel the restriction can then be submitted along with any supporting evidence. The restrictioner would be advised of the application and given time to object.

How is any objection dealt with by the LR in respect of who decides on whether or not to remove or retain the Restrictions?

Land_Registry

eggbox wrote: »

Thanks LRR can I just ask,


As the Restrictions would obviously be "superfluous" (as the property no longer holds any "Beneficial Interest" against which the CO was made) why would the LR not automatically cancel them?

All a matter of interpretation of the law as whether an interest is 'superfluous' can be very subjective

For us to remove the restriction as “superfluous” we would have to assume that the registered estate was no longer subject to a trust of land - as you may appreciate a transfer from joint owners to just one of them for no monies does not automatically prove that point so we would ask for an application to be made to cancel the restriction.

and

How is any objection dealt with by the LR in respect of who decides on whether or not to remove or retain the Restrictions?

Any objection is considered by one of our lawyers and if the objection appears to have some basis in law then the applicant would be advised and given the opportunity to counter the objection for example.

Our Practice Guide 37 explains the objection process for you although it won't cover specifics such as the law around charging orders for example

Hope that helps in some small way but as you know every situation is treated on merit and our view is that the applicant has to prove the point re the restriction now being 'superfluous' - not everyone may of course agree

eggbox

Thanks again LRR

With regard to the first answer, does not the Court order ruling that one person now owns all the interest in the property not kill the trust of land problem stone dead?

Land_Registry

eggbox wrote: »

Thanks again LRR

With regard to the first answer, does not the Court order ruling that one person now owns all the interest in the property not kill the trust of land problem stone dead?

Does the court order actually say that or does it simply order that the parties transfer the ownership?

The danger here eggbox is that it can be too easy to make assumptions around the beneficial interest. You know where the legal ownership lies as you have a registered title but that does not apply to the beneficial ownership.

That assumption is a much safer one where you have joint owners selling for capital monies but it is unsafe to make any assumptions where the transfer is simply from two existing owners to just the one of them.

eggbox

Land_Registry_representative wrote: »

Does the court order actually say that or does it simply order that the parties transfer the ownership?

I do take your point (and I will bow to your knowledge if you tell me of instances where it's different?) but I can't see a Court ordering the transfer of ownership to just one of the previous joint owners, without it being the express intention of the Court that the sole owner is then entitled to all of the Beneficial Interest?

Land_Registry

eggbox wrote: »

I do take your point (and I will bow to your knowledge if you tell me of instances where it's different?) but I can't see a Court ordering the transfer of ownership to just one of the previous joint owners, without it being the express intention of the Court that the sole owner is then entitled to all of the Beneficial Interest?

Thanks eggbox but I don't think it's a case of 'instances' here as it is genuinely on merit so we would not be able to advise on hypothetical circumstances where you are touching on other areas of the law

Remember we are not in anyway part of the court process so would not be privy to it's intentions and as you will appreciate the parties involved may have conflicting views on how and why the court has decided the way it has.

It would be interesting to read Taffybiker's thoughts on what was behind the court's decision here.
And of course the creditor's reasoning as to why they believe the beneficial interest of the ex is still wrapped up with the property in some way

Taffybiker

I'm sorry about the late posts but I cannot be on the forum during work hours.
I have been catching up with what is being said and am happy to post the (almost) exact wording of the Court Order, now that I have found it:

IT IS ORDERED THAT
The wife shall transfer to the husband within 28 days from the date of this order of all her legal estate and beneficial interest with full title in the freehold property, *********, registered at the Land Registry under title number ******* subject to the mortgages secured thereon in favour of ******** and the Charging Order in respect of ******* and ********.

So much for the 28 day thing though. That was October 2012.

Land_Registry

Thanks Taffybiker - I'll do some digging around this as whilst the court order is pretty clear as to what the court wants to happen there may have to be something extra added or included to 'prove' that the beneficial interest has come to an end in some way.

Out of interest can you confirm which creditor said they would consent but only if their restriction remained in place and did they cite anything additional as to why that was their position?

eggbox

LRR

If a Court orders the BI to be transferred would a Restrictioner not consenting make any difference to the transfer going ahead (assuming the Restriction is a Std Form K as these are?)