Charging Order? The myth

bluejulie

I hope the Land Registry Representative will be able to help:
My ex bought a car and secured the debt on our property 10 years ago. After court cases and struggling with debt caused by him, the property was transferred to me but I am now in a situation when his car debt is registered as a charge on the land registry document. I am not planning to sell but I'm in a process of a new lease and I was told by the solicitor the charge has to be removed.
I had written to Toyota and asked them to remove the charge (my ex was made bankrupt and the charge was included in his bankruptcy) but their solicitor had informed me that I have to pay the debt if I want the restriction removed. I tried negotiating too but the required amount is £9000 while the current debt is approximately £11 000.

I am not planning to sell the property.
I was asked to take up the new lease and I started the procedure as my property is in a block of flats ( 71) and 50% of the flats have taken up the new lease. As I'm not planning to sell, I don't even want to take up the new lease but I was informed that we all have to vote in 2018 and I might be obliged to take it up if everybody votes "Yes".
I was told by the solicitor dealing with the lease that in order to have the new lease I will have to try to remove the restriction.

Copied from my land registry form:

(17.04.2007) RESTRICTION: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.
(20.05.2009) 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 Toyota Financial Services (UK) Plc (Co. Regn. No. 000000) at care of Young & Pearce, PO Box 7347, Nottingham NG1 5ZZ, being the person with the benefit of a final charging order on the beneficial interest of............... made by the Nottingham County Court on 16 April 2009 (Court reference 000000).
(26.02.2013) The Transfer to the proprietor contains a covenant to observe and perform the covenants referred to in the Charges Register and of indemnity in respect thereof.

Why the Restriction stated would prevent a new lease being purchased as the Restriction registered is regarding a disposition (sale)?

Land_Registry

bluejulie - a disposition will include a sale (transfer), lease or legal charge (mortgage).

I assume 'taking up a new lease' means that you are being offered a new lease for a longer term - if that is the case then yes the restriction would have to be removed/cancelled before the old lease could be closed and the new lease registered

bluejulie

Land Registry Representative

Thanks very for your response!

The term of the old lease is 999 years from 1 January 1963 so the new one is not with a longer term but the same. There are changes but in regards to selling easier as according to some owners the old lease is somehow defective. I bought the property in 2005 and everything was OK with the paperwork. I don't even want to take up the lease as it's quite expensive and I'm not planning to sell the property. However I was told by the management company that there will be a vote in 2018 and if all 71 flats agree, owners will be given 6 months to take up the new lease.

Land_Registry

Ok - thanks for clarifying

If the variation is simply that and not altering the demise (the actual flat size) or term as you suggest it would not be classed by us as a disposition. So you may find that you can notify Toyota, certify to that effect and the variation is noted and the restriction remains.

The second thing, which I was about to edit into my original reply, is that I note you have a form A restriction on the title (the 2007 entry). I doubt if that impacts in the scenario now explained but it may do if you did decide to sell/mortgage and you are the sole registered owner. I only mention now as you referred to your ex so I am unclear if the ex is still a joint owner or the title is in your sole name.

Please do rely on your legal advice here but worth querying the reason(s) with them as there may be something else they are aware of

bluejulie

Land Registry Representative

The property was transferred to me after auxiliary court proceedings in 2012 and my ex- husband is not an owner any longer. I am the sole registered owner.
Could I please text you/ email you the land registry document? I have a new copy so you could see the restrictions and advise me. Somehow your account doesn't allow private messages ..........

Land_Registry

You can email us at customer.service@landregistry.gov.uk

bluejulie

Thanks very much Land registry Representative!

I have just emailed - reference number is 170121-000089

Rileybaby

Can anyone help?

I have 2 charging orders on my house which is atpresent jointly owned with my ex husband. The orders are set against debts which were solely in my name. I am in the process of remortgaging to have my ex removed off the property. I have additional funds to pay for the debts but want to see if I can negotiate a discount with the companies. My solicitor is telling me that I need to pay these debts off before the mortgage can go into my name only. I don't think she is right as I think they will be restrictions and not charges can any one advise what I need to find out / do please?

eggbox

Unfortunately, your Solicitor is correct (but she should have been able to give you an explanation as to why?)

The problem you have is that the Restrictions on the deeds have to be removed (however that may be) otherwise they will retain priority over any new lending by virtue of the date registered. So, unfortunately, if they aren't removed then your remortgage won't go through?

The reason for that is because the mortgage lender will want priority on your deeds as the first charge. This is to ensure they retain the "power of sale" should they ever have to repossess your property.

Power of sale allows the first charge holder to remove all other charges off the register, should repossession have to occur, whereby they can then sell the property "unencumbered" by other charges.

But you can still try to negotiate with the creditors on the basis that they can retrieve a lesser amount now, rather than having to until who knows when and the house is sold?

This thread also explains, however, that should you decide to sell the house instead of remortgaging; then it is possible to retain ALL the proceeds upon the sale going through.

Rileybaby

Thanks egg box. I didn't think of that! I will speak to the lenders and seek to negotiate lower figure but I won't hold out much hope! Thank you for your help it is appreciated.