Charging Order? The myth

MrsJrt

Could someone please tell me what rights a company has with this wording on a restriction for final  charge order.  I don’t know if it’s standard wording so not sure where we stand in selling.
Thank you for any help or advice. 

RESTRICTION: No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to xxxxxxxxxx being the person with the benefit of a Final charging order on the beneficial interest of xxxxxxxxxxxxxxx

eggbox

It means the creditor with the Charging Order has the right to be notified when the property is being sold. It can't stop as sale but the new owners details can't be registered until the BUYER or his conveyancer have certified to the Land Registry that the creditor has been notified of the sale. 

This thread is explaining that, with the help of compliant solicitors (or DIY conveyancing); then the property can be sold and all the proceeds passed to the debtor upon sale. This is because there is nothing in Law that states the debt has to be paid at the point if sale. The debt will still exist and the creditor still a "legal" right to the funds, however, it will create difficulties for the creditor collecting the debt once the money has "left the building". 

Again, for any new readers; this thread is not advocating wholesale debt avoidance. It's aimed at people who took out "unsecured" loans and credit cards, whereby, the lender is able to charge higher interest rates but, if the debtor falls on hard times and default on the loan (as tens of thousands of people did after the 2008 crash); the Law allows creditors to turn the "unsecured" loan into a "secured" loan by attaching the debt to an asset the debtor owns. Which for most working people means there family home. This is, not only, unjust as the debtor has paid a higher premium because of the "unsecured risk", it's also immoral.

The reason its immoral is simply because Big Banks, mainly, sell off the defaulted loans for a fraction of their value (between 4-10%) to debt collection agencies. These companies then terrorise homeowners (the overwhelming majority of which had never defaulted on anything in their life up until 2008 ) that they are going to lose their home if they don't pay up. There isn't even any recognition for the higher interest already paid when the Charging Order is granted, and the low life's who purchase the debt (at a fraction if the value) are, legally, entitled to every last penny owed of the original debt.

So this thread is helping to even up the score a little and give people options when they sell. The repercussions from 2008 are still going on but, I fear, covid is going to see a resurgance of Charging Orders being used once the huge job losses, estimated to start later in the year, kick in. So if you feel you are in avvulnerable debt situation please start taking steps to protect your property from these leeches NOW before it become too late.

MrsJrt

Thank you for confirming, I didn’t think the property could be sold so to know we can go ahead selling as long as they are notified is good to know. 

Many thanks for your help. 

eggbox

No problem and if you are intending to pay the debt it will be settled by your solicitor from the proceeds BUT if you don't wish to settle the debt upon sale you must make the soliciotr aware beforehand! They will tell you it can't be done but we'll give you info to show them it can, okay.

Land_Registry

eggbox said:

It certainly looks iffy from the point of view of the buyers conveyancer? But only the LR will know if they gave a false certificate? Perhaps Land Registry Rep can explain how serious that action is?

The title change of ownership is I assume what we would refer to as the date on which the application to register the transfer was made. When they lodge it they certify that they have notified the creditor as per the restriction wording. 

We don’t need to see the letter referred to so I’m unsure what the issue is providing they certified that they notified them 
Once again this reinforces the key point that it’s the charging order and the law surrounding that, it’s enforcement and the debt that matters. It still exists after a sale/purchase and it’s just the restriction that has been overreached. 

MrsJrt

eggbox said:

No problem and if you are intending to pay the debt it will be settled by your solicitor from the proceeds BUT if you don't wish to settle the debt upon sale you must make the soliciotr aware beforehand! They will tell you it can't be done but we'll give you info to show them it can, okay.

I didn’t realise any of this and have already approached the other solicitors to say I need to settle the judgement amount. They haven’t replied to me as yet so I will continue with putting the property on the market and see what happens. As it’s a restriction and not a full
charge order, will they be able to claim interest in the judgement amount or will this be time consuming for them and leave them at risk of nothing if they don’t sort before a sale completion? I don’t believe there has ever been a statement of interest provided and there certainly hasn’t been any contact about the judgement/charge. It was placed on the property in 2008. 

Thank you 

eggbox

MrsJrt
Firstly, you do have a "full" charging order but, because you are a joint owner and the other party doesn't owe the debt; Land Registry rules only allow a restriction to be placed on the deeds notifying that a CO exists on the beneficial interest (equity share) of one of the owners. This is the key to why its possible to sell  the property and not settle the debt at the point of sale.

Regarding interest, if like most people on here your debt is for a credit card or bank loan then interest should not have been added as its not allowed on CCA regulated loans. That doesn't mean it hasn't been added as some DCA's know District Judges don't always understand the rules so always check this! If the debt is for a non CCA debt then it is likely to be attracting 8% a year interest. But this would have added to the CO when granted.

MrsJrt

Thank you for your help. 

eggbox

Land_Registry said:

The title change of ownership is I assume what we would refer to as the date on which the application to register the transfer was made. When they lodge it they certify that they have notified the creditor as per the restriction wording. 

We don’t need to see the letter referred to so I’m unsure what the issue is providing they certified that they notified them 
Once again this reinforces the key point that it’s the charging order and the law surrounding that, it’s enforcement and the debt that matters. It still exists after a sale/purchase and it’s just the restriction that has been overreached. 

I think the layman would view the "title change of ownership" as being when they can, physically, see that the deeds have been updated and the new owner/s name/s appear on the deeds. That change (as I know from recent experience) can be several months after an application to change the register has been sent to the Land Registry (and I'm not blaming the LR for that.)

The issue regarding the certification, therefore, is because it would seem clear that the conveyancer concerned notified the creditor after the date he certified to the Land Registry he had given notification. Otherwise, how else could the title change happen before the creditor received notification? 

If you say the LR doesn't request the letter then it is opening up the system for abuse which, similarly, leads me neatly to another bit of information which I was a bit unsure on how to impart? But as its linked to this instance I'll explain it.

As the LR doesn't request a copy of the notification sent by the buyer (or his conveyancer) to the creditor; I was quite surprised to learn during the transaction I helped with that the LR also doesn't require proof of the monies that a buyer had paid the seller for their property. So if  a seller states he received £xxx for the property no proof is required that they actually have? 

To me, this could lead to misuse of the LR system by helping a property owner avoid paying a debt> This could happen, whereby, a person who is actually only transferring their property to another person; could actually state on the application that they had received monies from a sale when no money had actually changed hands? This could mean that, say, a Debt Collection Agency who had a restriction registered on the property deeds; would then see their restriction cancelled, as being overreached, because it looks like the property has been sold for value when, in fact, it has only been transferred? 

How awful would that be 

Stesar

eggbox said:

Land_Registry said:

The title change of ownership is I assume what we would refer to as the date on which the application to register the transfer was made. When they lodge it they certify that they have notified the creditor as per the restriction wording. 

We don’t need to see the letter referred to so I’m unsure what the issue is providing they certified that they notified them 
Once again this reinforces the key point that it’s the charging order and the law surrounding that, it’s enforcement and the debt that matters. It still exists after a sale/purchase and it’s just the restriction that has been overreached. 

I think the layman would view the "title change of ownership" as being when they can, physically, see that the deeds have been updated and the new owner/s name/s appear on the deeds. That change (as I know from recent experience) can be several months after an application to change the register has been sent to the Land Registry (and I'm not blaming the LR for that.)

The issue regarding the certification, therefore, is because it would seem clear that the conveyancer concerned notified the creditor after the date he certified to the Land Registry he had given notification. Otherwise, how else could the title change happen before the creditor received notification? 

If you say the LR doesn't request the letter then it is opening up the system for abuse which, similarly, leads me neatly to another bit of information which I was a bit unsure on how to impart? But as its linked to this instance I'll explain it.

As the LR doesn't request a copy of the notification sent by the buyer (or his conveyancer) to the creditor; I was quite surprised to learn during the transaction I helped with that the LR also doesn't require proof of the monies that a buyer had paid the seller for their property. So if  a seller states he received £xxx for the property no proof is required that they actually have? 

To me, this could lead to misuse of the LR system by helping a property owner avoid paying a debt> This could happen, whereby, a person who is actually only transferring their property to another person; could actually state on the application that they had received monies from a sale when no money had actually changed hands? This could mean that, say, a Debt Collection Agency who had a restriction registered on the property deeds; would then see their restriction cancelled, as being overreached, because it looks like the property has been sold for value when, in fact, it has only been transferred? 

How awful would that be 

I agree.

Apologies if I'm confusing things with incorrect terminology. This is the section on the title register I'm referring to

B: Proprietorship Register

This register specifies the class of title and identifies the owner. It contains any entries that affect the right of disposal.

Title absolute

1 (xx.xx.2020) PROPRIETOR: Mr x and Mrs x

of xxxxxx address

2 (xx.xx.2020) The price stated to have been paid on    "sold date"      was

£xxx,xxx.

The dates in brackets, which are the same, (DATE being the day after the creditor was informed and the "sold date" (DATE A) being 5 weeks prior i.e. the date funds were received from the sale.

Given that there must logically be a delay between the buyers conveyancer notifying the LR and the LR processing the relevant application (in this case 5 weeks), it seems to me disposition should have been given at DATE 1 (and was potentially certified as so) but was actually given at DATE 2. (i.e 5 weeks too late).

Regardless, it doesn't change much for me, other than the creditor may potentially have a second source of repayment via compensation from the conveyancer. 

My "there wasn't any money for you, however I do have a family member who can help, or you can pay to make me bankrupt, which will realise no money either" negotiation letter will be sent shortly.

Once this is over I'll be able to provide more detail.

Thanks again.