Charging Order? The myth

Land_Registry

bluey1406 said:

Dear LR Rep, further to your very helpful reply, can I just confirm whether an RX3 is needed to remove the notice? I called the Land Registry earlier this afternoon and was advised that it would.   I am now not sure that this is correct, as I feel that from your answer and what I have gleaned in general, no RX 3 is needed and it would just be the AP1 in standard form with associated TR1, Mortgage Deed etc from the Buyer's solicitor along with the aforementioned certificate signed by the conveyancer?

Thanks again for the help. 

An RX3 is only needed if you are applying to cancel the restriction. You aren’t here as you are relying on it being overreached and therefore cancelled automatically. 

I can’t really comment on your contact with us as I don’t know exactly what was asked and what reply was given. I have experienced similar scenarios where people ask how do I cancel a restriction and form RX3 is the answer. Conveyancers often say the same thing. But COs have a specific nuance about them 

The guidance I provided is what you need so I would discourage making multiple contacts as you risk asking the Q differently each time and there’s also a risk you get different replies.

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blue1406

CCJ's only expire on your credit file after 6 years, however, the Judgement doesn't expire but its widely acknowledged a creditor would have difficulty enforcing the debt if it had took no action in the six years after being granted the CCJ. As the creditor has enforced in this case (by way of the ICO) the debt will be considered as being enforced within the required period.

A creditor also doesn't have to notify the debtor when it applies for an ICO as the (intended) purpose is to try and stop the debtor selling the property before the Final Charging Order can be heard (whi many creditors don't upursue as having the ICO in place does the same job.)

An RX3 is a request by the property owner to cancel the restriction on the deeds PRIOR to a sale. The Land Registry will only do this  if the request is valid. In your case they won't do this (as LRR has previously explained) as the original reason for its registration has to be taken into consideration. I know this is frustrating when the person who now own the debt can't be located.

However, if you've managed to convince the conveyancers/solicitors involved (regarding overreaching) then there is no need for an RX3 as the the overreaching that will occur will remove the restriction. 

bluey1406

Land_Registry said:

bluey1406 said:

Dear LR Rep, further to your very helpful reply, can I just confirm whether an RX3 is needed to remove the notice? I called the Land Registry earlier this afternoon and was advised that it would.   I am now not sure that this is correct, as I feel that from your answer and what I have gleaned in general, no RX 3 is needed and it would just be the AP1 in standard form with associated TR1, Mortgage Deed etc from the Buyer's solicitor along with the aforementioned certificate signed by the conveyancer?

Thanks again for the help. 

An RX3 is only needed if you are applying to cancel the restriction. You aren’t here as you are relying on it being overreached and therefore cancelled automatically. 

I can’t really comment on your contact with us as I don’t know exactly what was asked and what reply was given. I have experienced similar scenarios where people ask how do I cancel a restriction and form RX3 is the answer. Conveyancers often say the same thing. But COs have a specific nuance about them 

The guidance I provided is what you need so I would discourage making multiple contacts as you risk asking the Q differently each time and there’s also a risk you get different replies.

Thank you; I had contacted LR by phone prior to posting on here.  I had thought that I had explained the position clearly but perhaps I wasn't clear, although I did provide my title number so the advisor would have been able to see for themselves.  Her comments then came back to me and I started stressing all over again was all!  Thank you for your kind help and responses

Scouse1066

I posted on here a few months back and ended up switching my solicitor to one that was recommended to me via inbox on here. I completed today and the creditor of my debit did not get in touch though they were issued notice therefore we completed without the debt being settled, I'm obviously very pleased. The debt does still stand but as far as I can tell thier only option would be to place a charge on any new property bought, but for me personally this isn't an issue as we emmergrate soon. If anyone wants a recommendation then please inbox me. Many thanks to the contributers on here who helped me understand the specifics and find a competent solicitor.

weimimamma

Hi all. Just a query. Is possible to change your mortgage lender while you have Charging orders ?  

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Unfortunately, not. The reason being that all mortgage lenders have a requirment of being the first charge on any deeds. This is so it gives them "power of sale", which first charge holders get and allows them to sell the property regardless of any other charges on the property, should the mortgagee ever default and they have to sell the property to recoup their loan.

As swapping to another lender wouldn't allow this, as the charging order would take priority in the list by date; they will insist on the CO being removed first before granting the loan. 

Steve7811

Hi, I hope someone can help on this. We have a mortgage that will come to an end in December this year, and we have like many a shortfall. We asked our lender for an extension, and they have said they would grant it but for the existing restriction on the property ( a standard worded one) means that they have to ask permission from the company (Lloyds bank) that requested the restriction. Unfortunately Lloyds are saying they will only agree if the debt is paid (which would mean we can apply to have it removed) and that would cost us £16000! I am awaiting a formal decision form Lloyds in writing (they would not give me a decision over the phone or email) as to whether or not they require payment first. I do have some cash in savings (we were going to put it towards the mortgage) so could negotiate a discount, but has anyone re-mortgaged without having the creditors approval? 

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In all the years I've been contributing to this thread I've never heard of this and it doesn't make any sense, either. If the mortgage lender wants to extend the repayment period of its loan, then it should have nothing to do with any creditor lower down the list? It may be useful to get Land Registry Rep's view on this as he may have a better understanding if there are circumstances when other charge holders are required to be notified by the primary charge holder?
 

KathrynConfused

I have read alot of these discussions and have found them very helpful. We have four restrictions on our Deeds, the usual wording about notifying creditors etc. Our solicitor says that we HAVE to pay them on completion.They are single name debts on a jointly owned property/joint mortgage. We believe that a Final Charging Order cannot be made as this is the case. A couple of years ago I contacted the Nationwide and was told, in writing that they would not have time to reclaim the debts and would revert to unsecured debts/payment plans. I have also been told that Restrictions are automatically turned into Final Charges. Any help would be greatly appreciated as I am literally being told completely opposite information.

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KathrynConfused

To explain, when a creditor is granted a Charging Order they are being given a legal right to claim the money owed when the debtors asset is sold. But as anyone who has ever taken anyone to Court over a debt (and I include myself in that); being granted a legal right and actually receiving the money can, in some circumstances, be two very different things. 

The reason for this is because is because of the difference between Civil Law and Criminal Law. If you don't comply with a Court order for Criminal Law you get the Police on your doorstep, but if you don't comply with a Court order for Civil Law then......well nothing happens unless the creditor takes more action. The decision whether the creditor takes further action will, very much, depend on the economical benefit of doing so?

So your Solicitor is correct that "legally" you "have" to pay the money when the house is sold. However, if you choose to defy the Law when you sell, then the consequences of doing so are virtually nil in this situation. Therefore, its your choice what you do and you don't have to use a solicitor who will only act if the creditor is repaid (to this end see Scouse1066 post on the 13th of August.)

With regard to Final Charging Orders. What happens when a creditor wants a CO is that they apply for an Interim Charging Order. They can do this without contacting the debtor and its purpose is to stop the debtor selling the property before the Final Charging Order can be heard. In practice, however, where the CO is being sought against a debtor who is a joint owner of a property, but only one owner owes the money; then a Final Charging Order gives no more benefit than an Interim Charging Order to the creditor. Hence, many creditors don't waste time and money pursuing the FCO as they already have what they want through the ICO. 

This is because in the case of both an ICO and a FCO, the creditor can only register a Restriction on the property deeds, for a CO, if the debt is only owed by one of the joint owners. However, a restriction placed on the deeds through an ICO application, won't turn into a FCO unless the creditor takes the matter back to Court to have it rubber stamped as such.

Your belief that an FCO can't be granted because of the details you give is, unfortuantely, unlikely to carry any weight in Court if the same creditor has applied for a FCO? This is because they are virtually impossible to stop. But, in reality, you are in no worse position than when the ICO was placed so don't concern yourself with this if it happens.