Charging Order? The myth

eggbox

Discounting a property being repossessed, The Restrictions you have on your deeds (which notify that a Charging Order has been made against one of the joint owners Beneficial Interest or equity) can only be removed by one of two ways;


1. The creditor agrees to remove the Restriction (which will only normally happen if the debt is paid in full or a settlement figure is agreed)
2. The property is sold to a third party for value (whereby it becomes overreached and is automatically removed as the buyers interest take priority)


So removing your name from the deeds won't help you achieve removal of the Restrictions, nor will selling your share of the property to your wife and daughter for the above reasons.

Mrtrotter

An update. Our current lender Halifax cannot proceed on the remortgage with additional money because of those notices on the land registry. So it looks like we need to sell..

JAS2015

Hi,
I have had the following message from my conveyancer today saying that the restrictions can only be lifted if paid in full - which isnt possible. The charges in my ex's name total £48k. His share of the equity is £32k - and I am certainly not paying him out of mine!
This is the message I have had -
"Good Afternoon, Thank you for your message. Unfortunately we are not in a position to negotiate lower settlement figures with the debtors. We are instructed solely to act in the sale of the property on behalf of both of you. If you are wanting to try and negotiate a lower figure this will have to be independently of us and we will require written confirmation of the agreed amount from the restrictioners. Please note the purchasers' solicitor has requested our undertaking to repay the debts owed on completion of the sale. If we are not able to provide this to them they will not proceed with the purchase."
Help!! My ex is just ignoring my pleas for help. Can i speak to the two debtors myself to explain the situation?

Land_Registry

JAS2015 - eggbox would normally cover this for you although this thread has similar examples to your own.

If the restrictions are form K restrictions then it is worth querying your solicitor's response and ask them why they are of the view that the restrictions are not overreached on sale. If they would be then they should be responding to the buyer's solicitor accordingly

eggbox

Land_Registry_representative wrote: »

If the restrictions are form K restrictions then it is worth querying your solicitor's response and ask them why they are of the view that the restrictions are not overreached on sale.

Unfortunately, this is another example of Solicitors not understanding the profession they are being paid for.

JAS2015

You need to explain to, both, your useless Solicitor and the creditors involved that the debts owed are only attached to your ex's Beneficial Interest not the property itself. Therefore any amount owing above his share of the sale will not be repaid on sale as there is no legal responsibility for this.


I would also explain (as LRR refers to), that there is no legal obligation to repay the Restrictions upon the sale as the wording of the Restrictions only require notification of a sale taking place. The Restrictions are subsequently removed (as the terms of the Restriction have been met) and are automatically removed as they become overreached.


Make sure you let them know the Land Registry confirm this in their Practice Guides.

JAS2015

Thanks both!
I have actually took the step of appointing a new solicitor today who has experience of these charges and he has confirmed all your answers and can't believe my "original" conveyancers response. He says this can be resolved pretty quickly and will have no impact on the sale - unless the buyer does still choose to pull out of course.
My problem is i went with the conveyancer (albeit a nationwide company) recommended by the estate agent and was also the cheapest. A few weeks ago my gut feeling was that the guy handling my case was a glorified admin assistant who only had experience of straight forward house sales. Fingers crossed all should go to plan now.
This forum has been absolutely invaluable to me though so THANK YOU!!!

DAKOTA45

eggbox wrote: »

I know its difficult (and expensive), Dakota, but you should really be suing your neighbour for the loss he incurred you by preventing your sale.


You need to keep your actions a little bit simpler and a bit more direct. You should be able to get 30 mins free advice from A solicitor and, if you have the evidence as you say, you may find someone willing to take it on a no win no fee basis.


It could also work out that if your evidence is as irrefutable as you say, that your neighbour may well prefer to settle out if Court? A letter to the MOJ may well help with what you say regarding your application being refused.

Hi Eggbox… here is what one solicitor advised …it's like they just don't want to be bothered… I explained that I had proof of the creditor's verbal threats to my buyer and that I had emails from both the estate egent and from the buyers themselves to prove that the creditor acted unlawfully… How can they say it's a case of the buyers 'changing their minds'?!! Their minds were changed for them by the actions of the creditor just days before exchange of contracts.. the conveyancing was advanced and the survey approved, etc..


Unfortunately, action of this type is extremely difficult to bring and the success of such is very limited. This is due to the fact that it is common within the conveyancing process for buyers/sellers to pull out, or for the process to fall through – for any number of reasons whether due to potential neighbours or any other reasons.

We would be unable to offer any further advice on your matter. If you wish to pursue the legal action, it would appear that you would be subject to the high costs of that action.

I am sorry we could not assist or provide any different advice on this occasion.


Feel as though I am banging my head against a brick wall. As you know, the creditor's solicitor has made a 2nd threat to apply for an Order for Sale, to which I have replied, saying that I intend to defend and make an application for equitable set off… They never reply to anything I send them.

It's almost as though they are playing horrible mind games by making this threat every few months so that the stress wears me down…

A waiting game, then…:(

D45

eggbox

Hi Dakota


You need the (potential) buyer concerned to provide evidence they pulled out of the sale for the reasons you state (an affidavit would be useful) Without that you aren't going to get a Solicitor interested.


With regard to the OFS threats, if you know they are mind games then you have treat them as such. So write a nice polite response back thanking them for their letter. Then simply refer them to your previous response explaining that your situation remains but you will update them if anything changes.


You will only encourage them to send further letters if they see they are getting under your skin.

DAKOTA45

eggbox wrote: »

Hi Dakota


You need the (potential) buyer concerned to provide evidence they pulled out of the sale for the reasons you state (an affidavit would be useful) Without that you aren't going to get a Solicitor interested.


With regard to the OFS threats, if you know they are mind games then you have treat them as such. So write a nice polite response back thanking them for their letter. Then simply refer them to your previous response explaining that your situation remains but you will update them if anything changes.


You will only encourage them to send further letters if they see they are getting under your skin.

Thanks, EggBox… Re our house purchasers, I have all their texts and emails, where they mention being threatened when they refused his offer to buy some adjacent land...but they were not keen on getting involved in litigation against the neighbour… it's a small community and I can understand that, especially as the person who made the threats has a lot of influence here…he knows people in high places and could make life difficult for people… he even made the police go away when I called them out and complained about his harassment.

I wrote to him about the threats he made to our buyers and his reply is pretty damning.. he mentioned that our buyers 'became upset and told him that he had ruined all their dreams…' (he is not the sharpest tool in the box). I don't think there would be much of a problem proving that he acted against me, but it's finding a lawyer who will get involved… I have no money at all and I need legal representation in court… this is way too complicated for me and I suffer from an anxiety disorder and panic attacks which render me practically useless in a public place.

With regard to the OFS; I didn't respond to the first threat, but I thought if it does go to court, the fact that I had continuously ignored their requests for payment might go against me.

I just want this over with… it is really affecting my health very badly.

Thanks for all your advice… it is greatly appreciated…. D45

DAKOTA45

I've been pondering on the differences between Charging Orders and Restrictions…

A Charging Order is a debt secured against your property, so it has to be paid when you sell that property…I get that.

But with a Restriction, there is no obligation to pay the debt upon the sale of the property... so does that mean it's unsecured?

According to the rules, you just have to inform the person who is owed the money that a sale has taken place, whereby they can then make an application to the court in order to recover the debt.

Why, then, are creditors allowed to 'jump the gun' and instead of waiting for you to sell, they can instead make the decision to ensure payment by forcibly making you homeless?

I can understand how that can happen with a secured debt, like a mortgage, where they can repossess if you don't pay.. but a Restriction is not the same … but it amounts to the same thing.

How does "no obligation to pay" become "pay up, or lose your home"?

They should at least raise the minimum amount (to bring a CO) from £1,000 to £30,000, the level needed to transfer proceedings to the High Court, where serious matters like this should be referred…

Nobody should be in fear of losing their home due to unsecured debt.