Charging Order? The myth

eggbox

choochybaby69

Land Registry Rep has covered the basics of what would happen to a Restriction should a debtor, unfortunately, die (so have a search.) But, in short, the Restriction would would still remain in place and would be attached to the part of your "estate" your interest in the house would form part of. Whoever, inherited this part of your estate would then have to consider how best to deal with it?

If the Solicitors are the creditors with the Charging Order that is notified by your Restriction; then the CO does give them the right to apply for an Order for Sale on your property (so they wouldn't be able to be sued.)

However, as your experience demonstrates; a Judge has total discretion on whether to grant an Order For Sale, or not, and there are also protections in place , too. So it should, hopefully, re-assure people with a Restriction that an OFS is (all but) impossible to obtain and they shouldn't get intimidated by threats from creditors stating they will go for this if larger repayments aren't met.

abuttyout

eggbox wrote: »

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.

Hello.

Am I right in thinking then that you cant remortgage if there is a restriction on the home. I'm a joint home owner, the other home owner has a CO on their half, I was hoping we could remortgage so they could pay off this debt.

Is this not possible?

Thanks

eggbox

abuttyout wrote: »

Hello. Am I right in thinking then that you cant remortgage if there is a restriction on the home. I'm a joint home owner, the other home owner has a CO on their half, I was hoping we could remortgage so they could pay off this debt.
Is this not possible?
Thanks

Its not possible if you aren't going to remove the Restriction for the reasons explained in the pasted extract.

If the remortgage is to pay off the debt notified by the Restriction, meaning the Restriction can be removed, then there is no problem (assuming, of course, your mortgage provider is happy to lend you funds for this reason?)

abuttyout

eggbox wrote: »

Its not possible if you aren't going to remove the Restriction for the reasons explained in the pasted extract.

If the remortgage is to pay off the debt notified by the Restriction, meaning the Restriction can be removed, then there is no problem (assuming, of course, your mortgage provider is happy to lend you funds for this reason?)

Cheers for the info, I think I need to speak to a mortgage adviser.

The situation I am in is :

They don't want to move, so I need to.
If they didn't have the restriction we could of just simply remortgaged for them to buy me out.

I'm guessing the only thing we can do is them save up to pay me off?

eggbox

Depending on how large the debt is, and how much existing equity is in the property outside of this debt; it may be possible to obtain a secured loan (secured on the property) as lenders don't insist on a"first" charge for this type of lending?

abuttyout

eggbox wrote: »

Depending on how large the debt is, and how much existing equity is in the property outside of this debt; it may be possible to obtain a secured loan (secured on the property) as lenders don't insist on a"first" charge for this type of lending?

Cheers for the info thats something I will look into. I need to try and get the figures first as it has turned into a ' bury your head in the sand and hope it will go away ' situation.

Choochybaby69

abuttyout, remember if it's jointly owned, then its a restriction, not a charging order. I know from talking to others, you can negotiate settlement with creditors, start low and be patient and hopefully save money.
Eggbox, thanks again. The solicitors were not the creditors, it was a leasing company, who have since sold the debt to another company, Investec. Is this also permitted the selling of my debt?

eggbox

Choochybaby69 wrote: »

abuttyout, remember if it's jointly owned, then its a restriction, not a charging order.

I think its important to clarify Charging Orders so newer posters don't, perhaps, get confused by the "is it a Charging Order or Restriction" issue? When a Charging Order is made against your interest in a property it is only how the CO is allowed to be registered on the property deeds that differs.

On solely owned property the CO can be registered as an "equitable" charge in the same way as a mortgage is registered. This means the Charging Order has to be dealt with, to allow the new registration details, when the property is sold.

On jointly owned property, however, and where only one of the owners is responsible for the debt; then the CO cannot be registered as an "equitable" charge as above. Instead, the creditor can only register a Form K Restriction which notify's anyone wishing to purchase the property that a CO exists against one of the owners.

Whilst this thread is explaining that a Form K Restriction does not require the CO to be settled, prior to a sale, to allow the property to be sold to a third party; its important to understand that, in both cases, a CO is involved.

eggbox

Choochybaby69 wrote: »

The solicitors were not the creditors, it was a leasing company, who have since sold the debt to another company, Investec. Is this also permitted the selling of my debt?

Yes a debt can be sold to a third party. However, to have any rights that have been granted by a Court (ie the CCJ and CO made); they must get the original CCJ re-assigned to them by a Court and which you should have been notified of?

(and I presume you mean that the the Solicitors who took you to Court were acting for Investec?)

Choochybaby69

No a company called, Universal leasing. I will look at my paperwork to see if the court was informed, but I don't think a company like, Investec will make mistakes. Does that mean, Investec will be named on the land registry if I look?