Charging Order? The myth

PaulW922

Piper008 said:

Hi I could do with some advice, we are in the process of remortgaging and have now discovered that there is a restriction on the property, not long after we purchased our house we went through a little financial difficulty, lost my job and we ended up with a CCJ with a company called CL Finance Ltd. This is the company that holds the restriction on our property. Now we discovered that this company got dissolved in October 2019 so we had to contact Bona Vacania to try and get the restriction waived but the company was resolved again and we were advised to re-contact them to resolve this but they claim to have no details of us or the restriction and refuse to provide any documents to that effect so we are stuck with a restriction that we cannot get removed, do we have any other options that we can try to get this resolved? 

Is the debt paid? If so, why not just apply to the court to have the restriction removed and see if CL Finance respond?

eggbox

Hi Piper008
I'm presuming the remortgage is not with your existing mortgage lender as, in that instance, there would be no need to deal with the Restriction? Unfortunately, this problem has arisen before and is hugely frustrating. Land Registry Rep may be able to provide an answer (or clarify what I'm going to recommend) when he checks in later but what you can do is;
1. You've got nothing to lose by trying to talk to the creditor and explain this problem will go away if they are willing to apply to withdraw the Restriction which they can do this using form RX4. Now, I have no idea why a creditor would deny being owed a debt but it happens an awful lot? You also, politely,  explain you will pester the hell out of them everyday if they don't agree to help you out and keep denying they own the debt.

2. Apply to have the Restriction withdrawn yourself using form RX3. If you do this the Land Registry will write to the creditor if they want to object to the Restriction being cancelled. The Land Registry will then make a decision on what information the creditor provides (I'm pretty sure that's the case but LRR will clarify)   

Piper008

Thanks, eggbox I will try both suggestions 

Land_Registry

eggbox said:

Hi Piper008
I'm presuming the remortgage is not with your existing mortgage lender as, in that instance, there would be no need to deal with the Restriction? Unfortunately, this problem has arisen before and is hugely frustrating. Land Registry Rep may be able to provide an answer (or clarify what I'm going to recommend) when he checks in later but what you can do is;
1. You've got nothing to lose by trying to talk to the creditor and explain this problem will go away if they are willing to apply to withdraw the Restriction which they can do this using form RX4. Now, I have no idea why a creditor would deny being owed a debt but it happens an awful lot? You also, politely,  explain you will pester the hell out of them everyday if they don't agree to help you out and keep denying they own the debt.

2. Apply to have the Restriction withdrawn yourself using form RX3. If you do this the Land Registry will write to the creditor if they want to object to the Restriction being cancelled. The Land Registry will then make a decision on what information the creditor provides (I'm pretty sure that's the case but LRR will clarify)   

RX4 is to withdraw so used by the restrictioner (creditor) so no real issues there as they are asking for it to be removed. We still have to carry out checks of course to ensure it’s authentic for example
RX3 is to cancel so used by anyone other than the restrictioner. Significant difference is that you have to demonstrate how the interest/the debt has come to an end and why the restriction should be cancelled. We don’t just carry out the same checks unless there’s supporting evidence, as explained on the form itself, to warrant cancelling the restriction. 

I’m sure you can appreciate the nuances between the two and how, if it was just a case of applying to cancel we’d be spending most days putting the restrictions on and processing basic requests to cancel them 

eggbox

Thanks LRR
However, what is the situation if the person filing the RX3 forwards the reason (for cancellation)  being that of the creditor having no knowledge (or paperwork) for the debt;? Coupled with the creditor, either, ignoring your follow up request on whether they want to object  to the cancellation or backing up the debtors reason for filing the RX3?

Land_Registry

eggbox said:

Thanks LRR
However, what is the situation if the person filing the RX3 forwards the reason (for cancellation)  being that of the creditor having no knowledge (or paperwork) for the debt;? Coupled with the creditor, either, ignoring your follow up request on whether they want to object  to the cancellation or backing up the debtors reason for filing the RX3?

So has the debt been cleared? Has it been paid? If not what’s the legal basis behind it no longer existing? 

Crucial to remember it existed, the interest was then registered, unchallenged. It exists so what’s happened to change that position? 

Practice Guide 19 states. ‘We will cancel the restriction if we are satisfied that the restriction is no longer required. The application must be accompanied by evidence to show that this is the case‘
The OP is of course able to apply using an RX3 and we will then consider any supporting statements/evidence made. 

And one thing I would again stress in this thread is that we are a registration authority. We are not arbiters in the same way a court/judge is. So the starting point was the debt and the CCJ. So a court/judge recognised the debt existed and passed judgement. 

The fact that there is then a property to register that CCJ against is secondary. Many CCJs are passed against debtors who don’t have an interest in land/property after all. 

So if you feel there are grounds to show that the CCJ should be dismissed then that is where I would suggest you start. After all that was the original starting point. 

eggbox

Hi LRR
I appreciate your comments on this, however, if a creditor states they have no record, or more importantly, no interest in the debt then I think that would be acceptable grounds for cancelling a Restriction. A better way around this, however, may be for  Piper008 to apply to cancel the Restriction on the grounds its registration was an error as no CO has been applied for the debt She would back this up with statements from the creditor to the effect that they have no knowledge or paperwork on any Charging Order sought by themselves.

As Court records for debt judgements appear to be destroyed 10 seconds after they are issued; I would wager the Land Registry would not be able to validate any Charging Order was granted to the creditor, either? What then would be the reaction of the Land Registry to a request to cancel under RX3?      

Land_Registry

eggbox said:

Hi LRR
I appreciate your comments on this, however, if a creditor states they have no record, or more importantly, no interest in the debt then I think that would be acceptable grounds for cancelling a Restriction. A better way around this, however, may be for  Piper008 to apply to cancel the Restriction on the grounds its registration was an error as no CO has been applied for the debt She would back this up with statements from the creditor to the effect that they have no knowledge or paperwork on any Charging Order sought by themselves.

As Court records for debt judgements appear to be destroyed 10 seconds after they are issued; I would wager the Land Registry would not be able to validate any Charging Order was granted to the creditor, either? What then would be the reaction of the Land Registry to a request to cancel under RX3?      

Thanks eggbox but we wouldn’t look to hypothesise here as every application is treated on merit so there shouldn’t be any ?s involved.
There is nothing to stop someone applying to cancel the restriction using form  RX3 and submitting the supporting evidence. 

One if the key factors we will then consider, once we have the specific application and evidence, is indeed how the original entry was made and in what basis. That will be an important, but not sole, consideration. 

If the OP does that then he/she can share the factual scenario that then applied re acceptance/rejection of the application. 

eggbox

Hi LRR
I understand your reluctance to answer hypothesis but I think its a fair question to ask what the LR's thinking would (likely) be if there was no evidence available for "how the original entry was made and in what basis"?

sparkyunlimited

Some 11 years ago, I had a business and rented a business unit as a workshop and storage. I won’t bore you with the details but I went through a marriage breakdown and the business failed. I walked away from everything and buried my head in the sand with every debt I had.
The landlord re-possessed the industrial unit and took me to court for the remainder of the 12 month lease I had taken out.  I was not in a mental position to fight so he got a CCJ for the debt and shortly thereafter applied for and obtained a charging order on my jointly owned property.  My ex-wife was on the mortgage and deeds but the debt was mine and mine alone. 

I was unable to get her removed from the mortgage or deeds for 10 years due to my financial circumstances so all was quiet from the landlord as he sat happy that he had a charging order.
11 years later, my life has changed completely and I put the house up for sale. As it was only a restriction, the house sale went ahead and my ex wife received a payment from the sale leaving insufficient funds to clear the debt owed to the landlord. 

He made contact via his solicitors 5 months later by presenting me with a statutory demand on my doorstep.
he has not acted on the statutory demands 4 month limit which has now expired.
my question is this:
is the CCJ that was converted in to a charging order that was then overreached still enforceable? In theory it is just a CCJ again as the charging order does not exist. 

He is claiming 8% interest in the CCJ on the (now expired) statutory demand which, as it has expired, is irrelevant?
am I right in thinking that legally, this is just an unpaid CCJ at this point and that, whilst statutory interest is chargeable on an unregulated debt, by allowing the statutory demand to expire, the amount claimed is not legally entered or claimed at this point?

they are playing hardball with the negotiations on payment, they are asking £10k payable by 3 monthly instalments which isn’t an option - I just don’t have thousands of pounds laying about to hand over.

thanks in anticipation.