Charging Order? The myth

PC2001

Hello,
I'm looking for some advice and to know what options I have. I am not the person with the debt but am the joint owner with the form k restriction for a final charge against my STBX.
I'll try to keep it short...
STBX has a FCO for £12k registered as a form k restriction on the joint house. It is gaining 8% interest for the last 6 years and is now with the costs it totals approx £16k.
STBX went bankrupt shortly after the FCO was registered and I bought his beneficial interest from the trustee. He now has no interest in the house and no incentive to pay the charge. I want the house signed over to me, will I have to pay the FCO myself inorder to do this, he won't pay it. Is the only way around it to sell to a third party? Will it not be overreached if it's transferred to me in divorce proceedings?

Distracted

Quick update on my sale, things were going well today until my solicitor spoke to the Land Registry who insisted that the Debtor was required to give their consent to the lifting of the restriction.

It is a standard worded Form K Restriction as below, my understanding is that the restriction can be removed in two ways.

- The bolded part is by the Beneficiary removing the Restriction themselves
- The second is a change of ownership with evidence of notification has been made to the beneficiary.

RESTRICTION: No disposition of the registered estate,
other than a disposition by the proprietor of any registered charge
registered before the entry of this restriction, is to be registered
without a certificate signed by the applicant for registration or their
conveyancer that written notice of the disposition was given to [NAME OF CREDITOR]

I really could do with some reassurance from the LRR on this point, and maybe even PM me a contact who my solicitor can speak to who fully understands the process to ease my solicitors mind. They are now concerned that my purchaser will be left with a restriction on the property.

Any help gratefully received

eggbox

Distracted

As LRR will confirm, it is the wording on the restriction that is all important. As you will see from the wording of your Restriction, it does not say that either the debtor (as you have put) or the creditor has to give any consent for the Restriction to be complied with.

The only task that has to be completed is the buyer (or their solicitor) must notify the Land Registry that they have notified the creditor a sale is occurring (and there is no time limit attached to that)

So the Land Registry are either mistaken or they have been asked the wrong question (which is my bet) about how a Restriction is removed.

Distracted

Thanks Eggbox, I'm desperately trying to find the link to the terminology that LRR used to describe the overeaching of the Restriction to send back to my Solicitor.

eggbox

Use the Land Registry Practice Guides to explain;

Practice Guide 19

Section 3.7.4 third bullet point

Practice Guide 76

Section 4 third paragraph

Distracted

Thanks Eggbox, I've sent that over to the Solicitor to look at, I expect a call this morning

eggbox

You need to explain to your Solicitor the LR can't give advice. So if they request an answer to how a Form K Restriction is removed, then they will informed they need the creditors consent.

However, if they ask what happens if the Form K Restriction is complied with (by the buyer notifying the LR they have informed the creditor a sale is happening) then they will be informed the Restriction will be cancelled as it will have been overreached.

If they further ask what happens to the CO payment, they will be informed it is not a matter for the LR and non payment does not prevent registration.

Land_Registry

As eggbox points out the devil is always in the detail re the Q asked and the answers we can give. Whilst we are not foolproof, we are humans after all, if the Q is simply how do we remove the restriction then as eggbox explains the answer will be very different to one which refers to overreaching.

With overreaching you are not applying to remove the restriction. You are selling the property in the way explained in this thread, notifying the creditor as directed by the restriction. We then remove the form K ourselves.

eggbox

Thanks for confirming LRR!

Land_Registry

PC2001 wrote: »

Hello,
I'm looking for some advice and to know what options I have. I am not the person with the debt but am the joint owner with the form k restriction for a final charge against my STBX.
I'll try to keep it short...
STBX has a FCO for £12k registered as a form k restriction on the joint house. It is gaining 8% interest for the last 6 years and is now with the costs it totals approx £16k.
STBX went bankrupt shortly after the FCO was registered and I bought his beneficial interest from the trustee. He now has no interest in the house and no incentive to pay the charge. I want the house signed over to me, will I have to pay the FCO myself inorder to do this, he won't pay it. Is the only way around it to sell to a third party? Will it not be overreached if it's transferred to me in divorce proceedings?

Overreaching wont occur when you transfer from 2 to 1 as part of the divorce I'm afraid