Charging Order? The myth

eggbox

Lillie9 wrote: »

Hi all,

I've got an update that is not good news for my situation. :mad:

My Solicirtos have been i contact with HSBC and have received a letter from them saying that they wish to claim the amount on the Charging Order when the sale goes through, so my solicitors have reiterated to me that they intend to pay HSBC directly if the sale proceeds.

I'm really stuck now.

Can I avoid this by instructing another solicitor? Or, because the HSBC are now aware of the sale, is there no way around it??

Your help is greatly appreciated.

Solicitors Regulation Authority Rules

1.04 Best interests of clients

You must act in the best interests of each client.

2.02 Client care

• (1) You must:
  • (a) identify clearly the client's objectives in relation to the work to be done for the client;
  • (b) give the client a clear explanation of the issues involved and the options available to the client;
  • (c) agree with the client the next steps to be taken; and
  • (d) keep the client informed of progress, unless otherwise agreed.

From what you say, Lillie, your Solicitor has failed the above rules he is supposed to follow quite seriously.

I would remind him of this and, politely, explain to him that you will give him the opportunity to rectify the situation "internally" by doing as you now request.

If he still refuses to follow his clients instructions, however, then firmly tell him you will have no alternative but to seek compensation for his behaviour though the Legal Ombudsman if he does pay any money to HSBC as a Restriction places no legal duty on the seller (or their Solicitor) to make payment to a creditor with a Restriction.

Remind him, also, that a sellers Solicitor has no legal duty to inform a Restriction holder, either, when a sale is made; A Restriction only places the obligation on the buyers solicitor for the Certificate of notification required for LR purposes.

HSBC also have to make a legal claim for the money as it is up to you to pay and not your Solicitor; so don't let your Solicitor tell you he has a legal duty to pay as he doesn't.

eggbox

Any Update on your Solicitor Lillie9??

lee_d_m

Very interesting thread...is there any chance some of you who have found solicitors that are aware of this law, let us know which one's you have used...even if it's only in a PM

Cheers

Lee

eggbox

It's a shame people aren't reporting back what is happening with their Solicitors as it's difficult to gauge how best to approach the sale of your house in this situation.

Any updates out there??

Sparklyfairy

BUMP!

Whatever the reason may be - I am at least comforted by the past comments where people have reported back that their money was safely in their bank account after their sale.

harisumo

I think the problem is that people only tend to use these sites when they have a problem, they forget or don't bother to keep the community updated when they have a positive result. The thing that has me confused the most is that I am being taken to by the dreaded NR (sole debt jointly owned home), if they have been unable to obtain their outstanding debts in the past by following the court/charging order route for solely owned debts which they always do, why do they keep doing it?

Sparklyfairy

Harisumo - I believe creditors go down this route because, generally, they know it's hard to find a solicitor who knows the diff between a co & restriction & they still get to collect their money when the house sale completes.

I know that - all going well - I'll be in a position to sell my house this time next year - but before I do, I'll be sure to have my clued-up solicitor at the ready before it goes on the market. Also, as we're moving abroad - a follow up may be delayed - but it will be a priority of mine as I've been so grateful to all who have contributed to this thread & it has helped so many people.

iwillgetthereintheend

eggbox wrote: »

Weary

As TerryW says, it is unlikely a creditor would get an order for sale on your house (and especially for credit card debt if that is what yours is for) but a search of the Internet will show you virtually non of them try.

My feelings on this is they know its unlikely and will cost them a fair bit of money to try so don't proceed (but if anybody reading this has had experience of an order for sale please post!)

It would appear that up until now a creditor with a Restriction has had a very easy time collecting their debt when when houses are sold as it's been perceived that they should "automatically" be paid. That is NOT the case and the Form K Restriction only has a power of notification of a sale by the debtor.

Hopefully, the more people who are made aware of this fact (and the more instances that are verified where people haven't paid a creditor upon sale) then creditors may see this avenue of trying to secure a debt as a waste of time.

Eggbox, with sole debt, joint ownership and creditors only being able to obtain a "restriction" and NOT a charging order, is there a difference in what can be applied if you have joint ownership as "tenants in common" or joint owners"?...I hope not as this will put a whole new spin on this thread and i will be back to square one! (:

jazyfamily

I have read all of these and am very relieved to hear the difference on a CO and a restriction. I am planning on putting my home up for sale early next year and my hubby has a restriction on this property which is jointly owned on the deeds but I am the morgagee.
A question I have is from the extract below of the LR form, the CO was only an Interim one that was granted by clearly not updated once it became final. Is this still a valid restriction?
(30.08.2005) RESTRICTION: No disposition of the registered estate
is to be registered without a certificate signed by the applicant
for registration or his conveyancer that written notice of the
disposition was given to Citibank International plc at care of
Salans, North Tower, 26 Elmfield Road, Bromley, BR1 1WA being the
person with the benefit of an Interim charging order on the
beneficial interest of XXXXXXXXX made by the Medway County
Court on 22 July 2005 Claim Number XXXXXXXX

Also - the restriction - am I right in stating that I get my solicitor to only declare it to the new purchasers solicitor and to then tell the creditor once the sale is completed? The restriction will not remain on the property will it?

Thanks

eggbox

iwillgetthereintheend wrote: »

Eggbox, with sole debt, joint ownership and creditors only being able to obtain a "restriction" and NOT a charging order, is there a difference in what can be applied if you have joint ownership as "tenants in common" or joint owners"?...I hope not as this will put a whole new spin on this thread and i will be back to square one! (:

No, it doesn't make any difference whether you are joint owners or Tenants in common. As long as only one person is responsible for the debt the CO can only be registered as a Restriction on the debtor's "beneficial interest".