Charging Order? The myth

eggbox

Gotkeys
Unfortunately, you are a victim of an increasingly noteable problem, whereby, the Court system, not being fit for purpose, doesn't record (beyond the original beneficiary) who has the current benefit of a CO? Whoever NR sold the debt to would have had to have the CCJ behind the CO reasigned by the Court to have the legal right to the proceeds of the CO. But the new beneficiary rarely updates the Land Registry deeds and the Court, usually, doesn't record any benficiary changes beyond a year or two? So it leaves people in the position you find yourself having to try and track down the owner of the debt. 

Land Registry Rep will need to clarify this next part, however; an equitable charge can't prevent a sale it just means if the charge isn't cleared it will remain in the property and will still be owed. So it would then be owed from any equity you and your partner had in the property? If there's no interest being added to the CO (which there shouldn't be as Northern Rock debt would be a loan or mortgage regulated by the Consumer Credit Act 1974) then you could deduct the outstanding charge amount (if known) from the sale price and proceed that way accepting the debt is still attched to your property (and you owe it as owners of the property). 

Its not ideal and be prepared for your solicitor to throw a fit should you suggest it  But if its your dream house or you are desperate it could provide a means to get you over the line as others on this thread, in the position you are, have reported never being able to find out who owns the debt or, even worse, finding out who owns the debt only for that  company to have no record of the debt owed? So you could be looking at several months of, fruitless, donkey work?

Land_Registry

Gotkeys said:

I wonder if anyone could advise me on the house we are buying
We are close to exchanging but there is an equitable charge in favour of Northern rock, created in 2007. The owner of the house (and debtor) died last year, and the house is being sold by his wife. Our solicitor has said we can't exchange until the vendors solicitor has had the entry removed. The vendors estate agent has told me her solicitor has applied to have it removed.
I have a few questions and would be very grateful for anyone's help:

1. Can the entry just be removed, or does it need to be paid first?

2. If it needs to be paid how hard could it be to find who now owns the debt, as Northern Rock no longer exist?

3. Why can't we buy the house, and the vendors solicitor holds the money to pay whoever the money is owed to?

4. How long is this likely to take to resolve? We thought we were about to exchange!

Thanks 

1. I suspect they mean paid off and removed but either way we’d need an application plus supporting evidence to remove it. Usually that’s a discharge by the creditor 
2. The debt still exists but others may be able to assist 
3. You probably could but if you are taking a mortgage your lender won’t let you. If you aren’t taking a mortgage your solicitor won’t let you I suspect as you have to get past 2
4. The application will wait 5/6 weeks before being processed at present. You need to ask the solicitor to request expedition as there’s a linked and dependent transaction, your purchase. Expedition reduces that wait time to under 2 weeks but everything still needs to be in order re application and evidence 

eggbox

Gotkeys

Land Registry Rep has raised an obstacle I forgot about. If you are taking a mortgage the lender will insist the charge is reoived as, without its removal, their charge won't be the first on the Register (which they insist on to receive Power of Sale in the event you default on the mortgage.) So what I have suggested would only be possible if a cash purchase.

Gotkeys

Thank you both, very helpful. 

We are buying with a mortgage, so this would need to be resolved before proceeding. We wouldn't really want to but with it still attached to he property anyway!

We were given the impression that the vendor wouldn't have the funds to clear the debt (although we have no idea how much it is for), so have assumed it would be settled on sale of the house. I'm not sure how the vendors solicitor has applied to remove the charge if this is the case.

We've already sold our house and nothing else suitable has come on the market, so I guess all we can do is wait and see if it can be settled/resolved/removed! 

eggbox

Yes I quite understand why you wouldn't want the charge attached but the requirment a mortgage puts the lid on it anyway.
Charges are usually settled from the proceeds of the sale (and not from other funds the seller has) in the same way the mortgage charge is settled from the proceeds if the sale. To explain, a mortgage charge being removed prior to sale is as much of an obstacle to a sale proceeding as an equitableble charge registered through a Charging Order is. But the seller isn't expected to clear the charges from another source unless there isn't enough equity in the house to do so?

Solicitors saying that a charge has to be removed prior to sale menas that the sellers solicitor gives an "undertaking" to the buyers conveyancer that the charges will be settled from the proceeds of the sale (and, therefore, removed from the register) prior to the new owners details being registered. 

Gotkeys

eggbox said:

Yes I quite understand why you wouldn't want the charge attached but the requirment a mortgage puts the lid on it anyway.
Charges are usually settled from the proceeds of the sale (and not from other funds the seller has) in the same way the mortgage charge is settled from the proceeds if the sale. To explain, a mortgage charge being removed prior to sale is as much of an obstacle to a sale proceeding as an equitableble charge registered through a Charging Order is. But the seller isn't expected to clear the charges from another source unless there isn't enough equity in the house to do so?

Solicitors saying that a charge has to be removed prior to sale menas that the sellers solicitor gives an "undertaking" to the buyers conveyancer that the charges will be settled from the proceeds of the sale (and, therefore, removed from the register) prior to the new owners details being registered. 

Thank you. So if the sellers solicitor can confirm who now owns the debt, they could satisfy my solicitor they will settle it on completion? Why would they tell the estate agent they "are in the process of having it removed" if this is the case? Maybe the estate agent is fed up with my emails and trying to keep me happy! 

eggbox

Yes that's correct. In the "process of having it removed" means they are trying to find out who the money is owed to?

68locky

Would anybody be able to advise on a problem i have encountered selling our house please?
I have 4 restrictions as follows on the house. Debts in my name, house in joint names.
I have asked the conveyancer to follow what is said on the restrictions to have them removed but they are saying it is company policy to pay them off.  I agreed to them contacting each of the restriction holders for settlement figures and they have tried 3 times since January but not had a single reply. They say we cannot proceed until the restrictions are removed. 
Surely there must be a time limit for these companies to reply as this is holding up the chain and the sale could be lost.
Any help would be greatly appreciated

(07.02.2008) 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 Bank of Scotland PLC (ref: xxxxxxxxxxxxxxxxxx) at Legal

Recoveries, 3 City Park, Hove, East Sussex BN3 7AU being the person

with the benefit of an interim charging order on the beneficial

interest of xxxxxxxxxxxxxxx made by the Leeds County Court on 11 December

2007 (claim no: xxxxxxxxxx).

(16.06.2008) 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 Hillesden Securities Ltd at Buckingham Road, Brackley,

Northants NN13 7DN being the person with the benefit of an interim

charging order on the beneficial interest of xxxxxxxxxxxxxxxx

made by the Leeds County Court on 2 June 2008 (court reference

xxxxxxxxxxxxxxx) (A/C REF:LIT/xxxxxxxxxx).

(28.07.2008) 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 Sainsbury's Bank PLC Ref xxxxxxxxxxxxxxx at care of

Eversheds LLP, Fairfax House, Merrion Street, Leeds, LS2 8HE Ref

xxxxxxxxxxxxxxxx being the person with the benefit of an Interim charging

order on the beneficial interest of xxxxxxxxxxxxxxx made by the Leeds

County Court on 14 July 2008 Claim Number xxxxxxxxxxxx.

(30.03.2010) RESTRICTION: No disposition of the registered estate,

other than a disposition by the proprietor of any registered charge

registered before the entry of this restriction, is to be registered

without a certificate signed by the applicant for registration or their

conveyancer that written notice of the disposition was given to Lloyds

TSB Bank at Legal Recoveries, 3 City Park, Hove, East Sussex BN3 7AU,

being the person with the benefit of an Interim charging order on the

beneficial interest ofxxxxxxxxx made by the Norwich County Court on 16

March 2010 (Court reference xxxxxxxxxxxxx).

C: Charges Register

eggbox

68locky
No there is no time limit and more and more people are coming across this issue as this thread exposes. The problem is the Court recording system for CO debts is not fit for purpose and, sadly, that won't change anytime soon. Therefore, you need to move to another solicitor as your existing one's have stated they won't act for you using the method explained on here.

A read from here backwards will locate you a couple of posters who have found compliant conveyancers. Drop them a PM to see who they used and move on from your present solicitors as you will just continue to bang your head on a wall. The only way you are, actually, going to sell anytime soon is to use the method explained on here. The Land Registry, as LRR has advised, can't remove Restrictions without good reason so without this method your stuck.

68locky

eggbox
thanks for your swift response.
I am concerned that even if I swap solicitors there is no guarantee that the buyers solicitor will agree to it. 

I will try and contact the restriction holders myself and see what they have to say.