Charging Order? The myth

eggbox

Tiatodd said:

Hi Eggbox. The deposit was approx £17000, house worth approx £200,000 with £125,000 remaining on the mortgage. I don’t believe that there is interest accruing on the jewsons charge. Yes I am still paying the mortgage.

Assuming there was no life or mortgage insurance cover in place to pay off the mortgage, you need to decide whether your aim is to sell the property or whether it's in your interests to keep it. For the moment, the Charging Order and Restrictions can be put to one side as the creditors won't be alerted to the death of the property owner. So if the bank aren't pressing you to settle the mortgage, and its in your interests to stay there; then I would just keep on paying the mortgage and use the the time to seek advice on your position. A relevant factor will almost certainly be if you can prove you moved into the property before the Charging Orders were granted? Along with proof of your £17k input this would, almost certainly, give you a 50:50 share of the property in the eyes of the Law? There has also been a recent case, whereby, a creditor has been able to place a CO against a property the debtor (a wife) who wasn't on the deeds of as it was registered in the husbands name only. The Court ruled, however, that the wife would be entitled, in the eyes of the Law, to a substantial beneficial interest in the property due to being married to the owner and the length of time she had lived there. So you need to ensure your, particular, rights are explored in the first instance which, sadly, will most likely require the help of a solicitor.

Tiatodd

I have the legal documents of the original restriction we wished to put onto the property which stated I was to receive the first 17% and then 50/50 shares.  I also have the documents from the land registry that refused this.  I have all our solicitors documents that state I put the deposit down.  The charges did not go on until a number of years after we moved into the property.  I am wanting to stay in the house for the children and when I spoke to the mortgage provider I was told to keep making the payments which I am happy to do. I have received a letter from the provider to,say it will need repaying but nothing else so far.  I was told someone would call me from the bereavement dept but not heard anything as yet.  If the debts exceed what was my husbands share of the property do you think I will be able to get them set aside and keep the house?

Gulliablenskint

I have a copy of the application for charging order it states the judgement or order required the judgement debtor to pay £5190.02 (including any costs and interest) The amount now owing is £5042.02. Does this mean further interest is not being incurred?

faye6174

Could anyone please pm details of a solicitor who knows what they are talking about regarding individual restrictions on a joint property. We are selling up and have every intention of paying all debts but our solicitor is dragging her heels and is adamant that we have to pay the debts via her from the proceeds of the sale. She has informed our creditors and they have not responded. She insists that we must get their permission. But if they aren't responding what can we do? 
Thank you 

eggbox

Hi faye6174
Unfortunately, solicitiors are not helpful to their clients in this area but, hopefully, one of the posters who has had success will pm you details. Regarding your current solicitor, you need to check the restriction wording as, in a few cases, the creditor is required to give written permission. However, they are extremely rare and most are standard form K which only requires
(1) the buyers side to notify the creditor a sale is proceeding
(2) the buyers side to certify (give written confirmation) this has been carried out
to allow the Land Registry to transfer new ownership of the property. 
The restriction will still remain on the property deeds at this point but, as is confirmed in the Land Registry' Practice Guide 76 Section 4 Paragraph 3;
"We will automatically cancel the Form K restriction once it has been complied with on registering a transfer of the registered estate for valuable consideration. We will assume that if the debt secured by the charging order has not been paid, your client’s interest will have come to an end with the postponement of the charged beneficial interest under section 29 of the Land Registration Act 2002"
Therefore, you need to use this information to (politely, as they are an arrogant bunch) explain to her she is wrong on this matter. The debt will still exist, however, once having been correctly notified of the sale; a creditor who's only protection of their debt being a Form K restriction does not have the power to withhold a sale proceeding.  
 

eggbox

Gulliablenskint said:

I have a copy of the application for charging order it states the judgement or order required the judgement debtor to pay £5190.02 (including any costs and interest) The amount now owing is £5042.02. Does this mean further interest is not being incurred?

No its not being incurred as, if it was, it would be stated at what rate in the order (which is usually 8%)

eggbox

Tiatodd said:

I have the legal documents of the original restriction we wished to put onto the property which stated I was to receive the first 17% and then 50/50 shares.  I also have the documents from the land registry that refused this.  I have all our solicitors documents that state I put the deposit down.  The charges did not go on until a number of years after we moved into the property.  I am wanting to stay in the house for the children and when I spoke to the mortgage provider I was told to keep making the payments which I am happy to do. I have received a letter from the provider to,say it will need repaying but nothing else so far.  I was told someone would call me from the bereavement dept but not heard anything as yet.  If the debts exceed what was my husbands share of the property do you think I will be able to get them set aside and keep the house?

I think what may be the key to answering your last question is whether the Land Registry were correct in refusing your application. So can I ask what the reason was for refusal? 

Tiatodd

These are some of the communication between our solicitor and the land registry and a copy of 2 restrictions.  I cannot make out with the restrictions if I am classed as a joint tenant or tenant in common.

eggbox

We could probably do with Land Registry Reps help here as, to me, it doesn't look like the Land Registry has refused to register the application but, instead, has just advised that the differential in share ownership won't be recorded on the register? But it does seem to indicate that the restriction that was registered, notifying the property can't be sold without your permission, does indicate joint ownership. However, if that was the case then the Jewson  CO should have been recorded as a Restriction not a Notice as you say your Restriction was registered first? So hopefully LRR can shed a bit of light?

However you, originally, intended to be registered in the respect of being joint owners or joint tenants; the charging orders would automatically render you as joints tenants at the time of your husbands passing.

Tiatodd

Thank you eggbox that sounds slightly more positive news.  I am confused with restriction 3 and 4 though as from what I have read restriction 3 is tenants in common but restriction 4 is joint tenants or am I reading that wrong?