Charging Order? The myth

eggbox

Mypnut

This is the bit that is confusing me so we really need Land Registry Rep to clarify what's going on here as he's stated that the restrictions need complying with, too?

Firstly, my understanding was that all charges are removed under a power of sale so I don't understand how they can still be showing on the new title deeds of a new owner?

Secondly, it was also my understanding that the restrictions would become overreached upon a sale for value and automatically removed, anyway.

So if Land Registry Rep could explain what is going on here it would help, greatly?

Mypnut

LRR any further advice please?

Land_Registry

eggbox wrote: »

LRR

Thanks for the update above but can I ask you to clarify why a Form K still has to be complied with in this circumstance?

I'm sure you'll put me right, but if the restriction is removed from the deeds (through a power of sale) will it no longer have any effect in preventing a sale proceeding even if not complied with (so what relevance does compliance now have?)

Also, the property (as far as the original owner is concerned) is not being sold its being repossessed which doesn't, automatically, mean that a sale is imminent? You have always said the wording of the restrictions is crucial and a Form K mentions nothing about repossession?

Apologies for late reply - missed the follow ups for some reason

The scenario is the same as whilst it is overreached a certificate is still required to confirm that the creditor has been notified.
And when a property is repossessed it is very rare to register the lender. The next application is to register the purchaser once the lender has sold on again.

So whilst form K does not catch the disposition as it’s not by the owners we still require it to be complied with by the applicant as per para 3 of section 4 of PG 76

Land_Registry

eggbox wrote: »

Mypnut

This is the bit that is confusing me so we really need Land Registry Rep to clarify what's going on here as he's stated that the restrictions need complying with, too?

Firstly, my understanding was that all charges are removed under a power of sale so I don't understand how they can still be showing on the new title deeds of a new owner?

Secondly, it was also my understanding that the restrictions would become overreached upon a sale for value and automatically removed, anyway.

So if Land Registry Rep could explain what is going on here it would help, greatly?

The devil is always in the detail so without the title number I can’t be precise.
If it has been sold, the new owners have been registered but the form K restrictions remain I would guess that the conveyancer/applicant did not provide a certificate to confirm notifying the creditors - but a guess only as that could be a possible reason for their remaining on the register.

Again, happy to check register if title number shared by Mypnut

We are not part of the process over how any surplus monies are dispersed. But another guess on that score would be that the lender sees it as the only way of getting the creditors to cancel their restrictions now.
You’d need to ask the lender though to clarify.

RobW1977

Hi Sorry if this is the wrong thread, im new to this forum.

In Aug 2019 a "Friend" offered me a loan, 30K for 3 months in return for 40K return by the 3 month date. At the time of taking the loan i was 100% confident of being able to meet the deadline, He made me Whatsapp him that i would put my house up for collateral, I didn't have an issue with this at the time as thought wouldn't be an issue.

In between he also leant me 3 x £5k's which i paid back total of £18K and 1 x 9K and i paid back £12K it all sounds madness but i was starting a new business and needed it.

I missed the 3 month deadline by about 2 weeks but paid back £20K of the 30K plus 10K interest.

He gave me till last Friday to pay and i just haven't been able to raise the final 20K.

He is now saying he is coming to my house to change the locks and evict me. Surely it can't be that easy? im not refusing to pay im just asking for more time which he's un willing to give.

What are his options and what are my options, ive never said he won't get paid i just need more time.

Any help would be appreciated.

Thanks

eggbox

No its not that easy and the Law doesn't allow you to be intimidated by threats.

However, it can come as a surpise to people that emails and text messages can be legally binding, especially where the repayment of money is concerned? So if you agreed to put your house up against the loan as collateral, then it's highly likely a Court will find in favour of your friend being owed money from the equity in your house (as you offered it as collateral?)

However, "Court" is the important word because if you tell your friend you dispute the deal then it will incumbent on them to sue you for the money owed in a Court. They won't have any legal standing to just take possession of your house (or money from the sale of the property) without a Court finding in their favour.

The threat was, in all likeliness, just an attempt to scare you into paying up. But I'd keep a record of what threats you have been receiving as its likely many aren't legal and you are entitled to contact the police if you feel unduly threatened.

Its also going to cost your friend time and money to bring the case to Court; so if you are planning to repay the money I'd use the time to politely explain to your friend that you arent going to be intimidated by threats (and you will involve the police if they continue) but, also, that you are willing work out a repayment plan with them.

RobW1977

I fully admit i owe him, although the interest is ridiculous i agreed to it, at the time he was going to get me investment in my company and was always the plan to use that to pay him etc.

Of the £54K hes lent me i've paid back £50, he's not hugely out of pocket but i do know he's owed what he's owed, i understand about texts and i've kept everything straight forward and keep telling him i fully intend to pay him. I would understand his point of view if no money had come back and i'd blocked him for eg. but i haven't.

Im just wondering how much time i have once he starts court proceedings? i obviously want it to be over.

Thnaks

eggbox

Unfortunately the time you have left until Court proceedings start is purely down to if and when your friend decides to do so (and the Law says that can be anytime up to six years after the agreement was made?)

However, a Court would be very sympathetic to anyone who had repaid back £50k of a £54k loan and is still trying to repay the rest. It's also possible the Court could view any excessive interest rate as an unfair term of the contract and order the amount to be reduced?

So I wouldn't be, unduly, worried as a Court would be unlikely to order you to sell your home and, instead, make an order for you to repay the debt monthly first given the amount.

So, as I said, it would probably pay you to explain this to your friend and ask them to accept a monthly payment. Alternatively, if the situation is getting you down; you could consider a bank loan (at a rate and time length that you can repay) to pay off your friend and get him off your back?

Whymeagain

Our former bank has been accepting token payments towards 30k unsecured debts since 2016.  Suddenly they are asking for much larger payments and taking about a charging order.  The debts comprise 4 loans and 2 overdrafts, some joint, some in one name only. The property is jointly owned.   What can we do to persuade them not to take action.. ?

eggbox

Whymeagain
Unless you can offer more money for repayment, its doubtful you will persuade the bank to chnge its mind if it has decided to go for a charging order? However, you might want to look at it as the lesser of two evils as the alternative could be them making noises about bankruptcy? But you'll only know there real intentions after you explain your financial position to them? What I would say is that you should prioritise, if possible, repayment of the joint loans over the sole loans. This is because creditors can register a charging order as an equitable charge against the property if both people owe the debt. If only one owner does, then a CO can only be notiied by way of a restriction which, as you will from this thread, is more beneficial to the debtor when it comes time to sell the property.