Charging Order? The myth

Distracted

Well after a careful think oabout my situation, I am deciding to sell our property, with the Form K Restriction in place from my wifes debt.

Any tips on approaching this situation - should I be upfront with potential purchasers or wait until they've put an offer in. Or bypass and only deal through solicitors?

Should I put the paperwork in place about the Tennants in common favouring my percentage of 99% - 1%? I have a print out of this but would a solicitor arranging the document carry more weight should it ever be tested

I figure I will need to speak and select my solicitor carefully, but what if they refuse to release the capital on sale?

I'm in a position where we will move into rented accommodation temporarily so it will not be so critical the other end to the process, I could always threaten to pull out.

I guess here is the start of the journey where I find out if everything I have read and been reassured about on here will work.

Whatever happens I promise that I will share my experience with everyone on here, and if it all goes to plan, and my story helps another person, it will have been worth it

DAKOTA45

Distracted wrote: »

Well after a careful think oabout my situation, I am deciding to sell our property, with the Form K Restriction in place from my wifes debt.

Any tips on approaching this situation - should I be upfront with potential purchasers or wait until they've put an offer in. Or bypass and only deal through solicitors?

Should I put the paperwork in place about the Tennants in common favouring my percentage of 99% - 1%? I have a print out of this but would a solicitor arranging the document carry more weight should it ever be tested

I figure I will need to speak and select my solicitor carefully, but what if they refuse to release the capital on sale?

I'm in a position where we will move into rented accommodation temporarily so it will not be so critical the other end to the process, I could always threaten to pull out.

I guess here is the start of the journey where I find out if everything I have read and been reassured about on here will work.

Whatever happens I promise that I will share my experience with everyone on here, and if it all goes to plan, and my story helps another person, it will have been worth it

Good Luck! I hope it all goes well and would be interested to hear how you get on. D45

Distracted

DAKOTA45 wrote: »

Good Luck! I hope it all goes well and would be interested to hear how you get on. D45

Will do, I'm getting a valuation done this saturday (the first of a couple already lined up) - I expect the middle of next month I will have it on the market as I've a few things to tidy up before it goes up for sale.

eggbox

Distracted wrote: »

Well after a careful think oabout my situation, I am deciding to sell our property, with the Form K Restriction in place from my wifes debt.

Any tips on approaching this situation - should I be upfront with potential purchasers or wait until they've put an offer in. Or bypass and only deal through solicitors?

Its your Solicitor that you need on board initially, as you need one that understands Restrictions and overreaching and who will act for you on the basis you will be requesting.

Once you have the above, then it will be up to him to explain to the buyers Solicitor regarding the requirements for the Restrictions removal prior to sale.

Your purchaser, ideally, should be a cash buyer. This is because you will get resistance from mortgage lenders saying they require a "clean title" prior to lending the money.

But there is ALL the information you require, on this thread, from the Land Registry to explain to any interested party (and therein lies the clue) that a Restriction is not an Equitable Charge on the deeds and, therefore, can be removed without the CO it notifies having to be discharged prior to a sale of the property.


As ever, good luck and thank you for taking the time to update us and if you require help just let the thread know!

Mrtrotter

Hi, we have had an offer agreed on the sale of our house. And we are now in the process of moving the sale forward. There are Restrictions on the Land Registry Document (individual debts) not charging orders.

Please can you summarise what I need to spell out to my solicitor to ensure the sale goes through and we keep the proceeds of sale (to put a deposit down on a new house).
Does our solicitor or the buyers solicitor need to notify the creditors?

Thanks

eggbox

Mrtrotter


What is required will be found in the wording of the Restriction placed on your deeds. So you or your Solicitor need to check that first.


If it is a Standard Form K Restriction, it only requires the buyer (or his conveyancer) to notify the Restriction holder that a sale is taking place with proof of notification being sent (eg a recorded delivery letter receipt) to be forwarded to the Land Registry.


That is it. But any objections from either Solicitor please come here for help.

Mrtrotter

Yes its Standard Form K - I just want to give my solicitor advance notice that if the buyers solicitor raises alarms saying they want the restrictions removed before the sale goes through. To explain that that is not required, just what you outlined above. Is that it in a summary?

eggbox

Your Solicitor should understand the difference but as most don't;


You need to explain that what you have registered on the property deeds is a RESTRICTION and not an EQUITABLE CHARGE (as would be the case if you solely owned the property) that notifies the Charging Order in place against ONE of the joint owners.


There is, therefore, no legal obligation placed on you to settle the debt the Restriction is notifying when a sale is made. The Restriction is there to allow the Creditor notification of a sale being made to act to recover the debt. But the debt is not required to be settled upon sale to allow the Land Registry to transfer the property to a new owner.


As long as the Restrictions wording has been complied with, the transfer is allowed to proceed. The Land Registry also will confirm that when a sale is made, for value, by joint owners to a third party; the Restriction becomes overreached and will be removed enabling a "clean title".


But

Mrtrotter

I will speak to them later in the week, thanks.

eggbox

Any resistance just come back here ok