Charging Order? The myth

Land_Registry

Understood and you will have a wider understanding of such matters across the end to end process around COs. So I can’t go into the level of detail you are able to or answer all of the ?s included.

My understanding is that the aim of applying for a CO is to enable the creditor to recover the original debt with interest on it from the proceeds of the next sale (or remortgage) whenever that happens. How they do that in the form K scenario after a sale, when it’s overreached, I don’t know as that’s not an issue for us. 

Whether the need to be notified triggers something again I don’t know but as most don’t update the register when there’s a change of creditor it seems unlikely. Whether that’s die to the reasons you mention again I don’t know. 

That’s a lot of don’t knows of course but that’s the key point really re COs against one of joint owners and how that can limit the effect, albeit not everyone realises, on the legal title which we register. 

And we are not privy to what goes on in the minds of a creditor/solicitor of course let alone anyone else as we are a registration authority so we deal with what’s applied for and not the wider legal considerations others may or may not be pondering before applying (or not)

The only thing I can add to your remaining points is that this approach has existed for a very long time and a lack of understanding by some re the nuances involved in how COs might be protected on the register and their effect/impact. 

A case in point is the form K restriction and the possibility that many see the word “Restriction” and believe they have to get it removed. In the case of most restrictions that is true but not for all as you realise. 

eggbox

Hi LRR
 The obvious reason for charging orders is to secure a debt owed because the debtor can't (or won't)  pay immediately.  In cases where the CO attaches to the beneficial interest of a debtor, its been assumed (certainly by conveyancers) that the debt should be repaid upon sale of the property where the BI is attached. This is a fair assumption, however, I cannot  find anywhere in Law where it is laid down that the debt must  be repaid upon the sale of the property. Certainly, a Form K  Restriction carries no such provision to ensure the creditor is repaid upon sale so I'm, genuinelly, baffled why solicitors are reluctant to proceed with a sale, as this thread explains, if there client requests it? Given the wording in PG76 now,  there is little for the buyers side to insist on prior removal of a restriction, either?

 You are correct to say these practices have been going on for a very long time and it is, almost, certainly the reason why solicitors are reluctant to challenge, or try to change anything, as most are only concerned in their own interests and not their clients. When a Court grants someone a CCJ in their favour, however, it comes as a shock to a lot of people that the Law does, precisely, nothing  further to make the debtor repay their debt owed. So, its always baffled me why solicitors are so eager to hand over there clients money to a third party when there appears no legal obligation, placed on themselves, to do so. The debtor owes the money ,if they don't pay on sale then they suffer any future consequences not the solicitor? Solicitor's will bleat about being officers of the Court blah blah blah but no Law has been broken through non payment of the debt upon sale?

 And you may well be right about the word restriction having solicitors thinking they need to remove it? However,  surely they should have been taught in Law school that restrictions are required to be complied with in order to be removed?  And that they should, therefore,  take more interest in reading what the actual restriction terms are?

catey92

Hi, would be grateful for some advice.  My Mum & Dad are both in their 70s. They have now paid there house off , due to ill health and disabilities,  they could do with selling the property, to use the money to obtain more practical accommodation.  They are of the impression that they can’t sell the house due to a charge order, that was placed on the house in 2005.  This was due to debts  in my Dad’s name.  I have obtained the title deeds and in November 2005, a restriction : no disposition of the registered estate is to be registered without a certificate .....was placed on the house.    My question is, are they likely  to be able to sell the house with this restriction on it, or should we try and pay the debt off in order that they can sell the house ( the debt is owed to Cabot, I think (states Kings Hill (no 1) on the document, and I understand it is for 3 separate credit cards accounts, that were initially unsecured , but became secured.  Any advice would be appreciated  

eggbox

Hi catey92
If they are happy to settle the charging order debt owed, then it will be settled by their solicitor, on their behalf, when the property is sold from the sale proceeds.

If, however, they are looking not to settle the debt upon sale; then this thread explains what's required.to be able to do that.

catey92

Hi thanks, I did try reading a few pages of the thread prior to posting, from the pages I have read, I think I will try and find them a solicitor that knows about restrictions 👍🏼

Pinkflora1974

Hello all, haven’t been on for a few days so thanks for all the comments and advice. It seems that my solicitor has listened to men and finally confirmed to the buyers solicitors that the restriction will be removed on completion and we are waiting to hopefully exchange. The delays, although minimal, have succeeded in annoying my buyers and I am hoping that an extra 10 days waiting for completion doesn’t cause them to pullout. I am not totally sure if my solicitor has had a reply from link/NRAM - she has asked me if I am intending to pay the debt off but is not really pushing on it at the moment.

I would like to say thanks, this forum has proved invaluable, whatever happens, and if anyone is in the same boat I would really urge them to read this thread, get a solicitor who knows about restrictions and stick to your guns. Here’s hoping mine completes in a couple of weeks...!

eggbox

Well done and the lesson here is to be persistent and use the facts to fight solicitor stubbornness!

dan224

Such a brilliant thread and so much fantastic advice. Appreciate this relates specifically to sale of a property with an interim charging order restriction. We are trying to remortgage with a new provided and have run into similar issues as other members. 

Stuck in a bit of a cycle that we can’t get out of. The solicitors handling the remortgage won’t proceed until the restriction has been lifted and need to move quickly to avoid having to sign up to a new commitment with our current provider. The restriction seems to be a K restriction, only requiring a ‘signed certificate notice of disposition’. The stumbling block is that it is with Howard Cohen/CL Finance. I’ve been calling a few contact numbers for HC to no avail, can’t see them listed on Companies House. CL Finance (according to Google) are closed. The only other correspondence I can find was through Lewis Group, who have dissolved also. The original balance wasn’t high, just got into a terrible state after redundancy. CCCS dealt with most creditors but I had to handle those with CCJs in place.

I’ve had conversations with land registry, the issuing court and also a legal advisor, all very pleasant but no solid advice other than contacting the creditor and trying to resolve with them.
The restriction relates to my debt only on a jointly owned property (four currently on the deeds, but will move to just two of us if we ever get through the remortgage stage!)

Really what I need is confirmation that this debt has been settled, but proving hugely challenging. It’s very old (2008) and can’t locate anything to provide solid evidence this has been settled.
Options that have been presented are for the CCJ to be set aside, or apply to Land Registry to remove based on being unable to contact the companies involved, however on both counts, I’m not sure I have enough to justify the setting aside and/or removal of restriction. 

Trying to see if we can engage a solicitor to resolve on our behalf, but of course everything is taking so much longer than we would like. Any advice or suggestions would be very warmly welcomed! 

eggbox

dan224
I've put some details at the bottom of this reply but let me know if you have already tried these details with no luck?
Unfortunately, your predicament is becoming more common and, as I've stated several times over the past few months, its being allowed to happen because, both, the Court and creditor recording processes are not fit for purpose. The Land Registry is in a difficult position as they know the debt is owed so they can't just eliminate, what is most likely, still a valid restriction just because it hasn't been established who the creditor is? Until there is a legal requirement for creditors to register for the debt, or be deprived of the benefit of the CO, then the problem will persist.

The reason any new mortgage lender will always insist on the restrictions removal is because they will need to be the first charge holder on the deeds. This is give them the "power of sale" should you ever defaulton payment. This allows them to sell the property free of any other charges that may exist on deeds. So if the Restriction is still there then this won't happen.

I won't pretend this next bit will be easy, however, you have nothing to lose in approaching the new lender in order to explain the difficulties you are having  in settling the debt (to allow the restriction to be removed prior to sale) but also explaining that removal beforehand is immaterial due to the fact the restriction will become overreached upon sale (provided its been complied with) and removed anyway. Meaning they will, automatically, be the first charge on the deeds as they require. The Land Registry Practice Guides can be used as concrete evidence for the removal and, I'm sure, the LR will confirm verbally if required. Nothing ventured nothing gained and all that so give it a try.

The contact details i have are; 

CLSFinance Ltd                                      CL Finance Ltd                                     Howard Cohen

PO Box 110                                             PO Box 166                                          29 Park Square

Cleckheaton                                            Cleckeaton                                            Leeds

West Yorkshire                                        West Yorkshire                                       LS10 2PQ

BD19 4XT                                               BD19 4WN                                            Tel: 0113 244 0597

                                                                Tel :0870 751 3399          info@howardcohen.co.uk

                                                                                           

 
  

dan224

Thanks so much @eggbox.

That’s the number I’ve been trying for quite a while for HC to no avail and CL Finance number appears to be no longer in service. We found another number, which was also out of service.

I think the approach to converse with the new lender could well be a way forward, as you say nothing to lose - unfortunately the solicitors are the middle ground and not really keen to have a conversation around the best approach, they’ve downed tools ‘till the restriction is removed.

I certainly have some documentation that confirms the liability (if for any reason it hasn’t been settled) is very minimal. We have plenty of equity in the property (well over £150k). Seems crazy given I only need confirmation that a few hundred pound balance was settled! Shout be so much more straightforward than this. I’m committed to getting it resolved, but mindful we could be talking months and months, so keen not to hold things up at the final hurdle.

Kicking myself I didn’t request any of the deeds prior to setting off on the remortgage - that said, I’m still not sure there would have been a workaround even with more time!