Charging Order? The myth

Land_Registry

eggbox said:

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?

I guess it all depends on what they mean by an ‘extension’ and/or how the mortgage lender views the risk level knowing that the other debt exists. 

It’s not one I’d be able to unravel for you but I’d expect your mortgage lender to be able to explain 

eggbox

Land Registry Rep

The extension is allowing the mortgage to be repaid over a longer term and past the original termination date. So the amount of debt won't be changing only the repayment period. I can also say with some confidence that, in my experience, a lender will have zero interest in any other debt associated to the borrower and will only be concerned about their own debt being repaid. This will be doubly so in this instance as the lender concerned will know they have power of sale on their side. 

But I was trying to find out if there are any set rules the Land Registry know about regarding one lenders responsibilities to another lender in an instance like this? I've never seen, or even heard mentioned, that a lender has to gain permission from another charge holder regarding any revision of their lending terms?

Clare47

Will the Land Registry rep can look at this for me please? ... or anybody else with any answers! 

There are two final charging orders on the property that I own jointly with the ex-husband (appearing as restrictions on the deeds). Both of the charging orders are in his name. I am in the process of buying him out to put the property into my sole name. The equity has been calculated taking the debts into account and as I want to remain in the property I will have to settle them in order for the transfer to go ahead. The problem I have is that the two companies won't speak to me about settling the debt as it's in the ex's name and he's being awkward about getting the settlement figures to my solicitor...

My question is... is there any way that the transfer into my name can be carried out and the restrictions removed without the debt being settled? 

Steve7811

eggbox said:

Land Registry Rep

The extension is allowing the mortgage to be repaid over a longer term and past the original termination date. So the amount of debt won't be changing only the repayment period. I can also say with some confidence that, in my experience, a lender will have zero interest in any other debt associated to the borrower and will only be concerned about their own debt being repaid. This will be doubly so in this instance as the lender concerned will know they have power of sale on their side. 

But I was trying to find out if there are any set rules the Land Registry know about regarding one lenders responsibilities to another lender in an instance like this? I've never seen, or even heard mentioned, that a lender has to gain permission from another charge holder regarding any revision of their lending terms?

I was told by our lender that the restriction placed a duty on them to seek the permission of the other party before any extension could be granted and this was something they said we should have bene told years ago. However I have looked and the restriction only talks about "no disposition" but does not specify what that means. From what I have read the disposition in this case is an entry or change to the entry in the Land Registry. We (and our lender) would not require any changes to be made, so no "disposition" is required as far as I can see, perhaps the LR rep can clarify what a disposition is (and yes I have read Practice Guide 19, but it is not clear)?   

Land_Registry

eggbox said:

Land Registry Rep

But I was trying to find out if there are any set rules the Land Registry know about regarding one lenders responsibilities to another lender in an instance like this? I've never seen, or even heard mentioned, that a lender has to gain permission from another charge holder regarding any revision of their lending terms?

None at all. We are a registration authority so whilst we register the lender’s interests what ‘responsibilities’ they have both re their lending and that of others isn’t something we would deal with. 

I imagine most legal charges allow for the revision of the terms but if they then trigger the need for a second legal charge then ‘permissions’ may be required but the register and priority of registered interests and/or lender restrictions would indicate that 

Land_Registry

Steve7811 said:

I was told by our lender that the restriction placed a duty on them to seek the permission of the other party before any extension could be granted and this was something they said we should have bene told years ago. However I have looked and the restriction only talks about "no disposition" but does not specify what that means. From what I have read the disposition in this case is an entry or change to the entry in the Land Registry. We (and our lender) would not require any changes to be made, so no "disposition" is required as far as I can see, perhaps the LR rep can clarify what a disposition is (and yes I have read Practice Guide 19, but it is not clear)?   

There’s no strict definition of what’s a disposition but the full wording of the restriction is important re ‘no disposition by……’
In basic terms a disposition by the owner (borrower) would be a deed so a transfer, charge, lease are your most common examples. 

If there are no changes to the register then there’s no disposition so no consent re the restriction required  

Land_Registry

Clare47 said:

Will the Land Registry rep can look at this for me please? ... or anybody else with any answers! 

There are two final charging orders on the property that I own jointly with the ex-husband (appearing as restrictions on the deeds). Both of the charging orders are in his name. I am in the process of buying him out to put the property into my sole name. The equity has been calculated taking the debts into account and as I want to remain in the property I will have to settle them in order for the transfer to go ahead. The problem I have is that the two companies won't speak to me about settling the debt as it's in the ex's name and he's being awkward about getting the settlement figures to my solicitor...

My question is... is there any way that the transfer into my name can be carried out and the restrictions removed without the debt being settled? 

See section 4 of PG 76 and the rest of this thread with regards overreaching, automatic cancellation of form K restrictions and settlement of the debt
https://www.gov.uk/government/publications/charging-orders/practice-guide-76-charging-orders#application-for-entry-of-a-form-k-restriction

AngieBaybe2

Stesar said:

Scouse1066 said:

Thank you both for your replies, yes I feel I need a solicitor who completely gets this and is willing to fight on my side convince the buyers solicitors that everything is above board, I'm not convinced my conveyancer is up to it as she's not a solicitor and probably seeking advice from the solicitors in the firm. So if anyone has any details they can PM me I'd be most grateful.   

Hi. I've recently been through this and would absolutely recommend you find a more experienced conveyancer. I've PM'd you the details of the one I used and understood the whole process entirely. We sold with no trouble whatsoever.

Hi Stesar,

Hope you are well. Could you PM me the details of the conveyancer you used please as I am in a similar position to Scouse1066. I have just spoken to my conveyancer about this and he informed me in an indignant manner that what I was suggesting was illegal and wherever I got my information from was wrong. So many really do not understand the process.

Thank you in advance

Stesar

Hi

I've PM'd you the details of our conveyancer. We sold our house with a restriction through her with no issues.

Good luck

KathrynConfused

I would appreciate help with a solicitor who knows about restrictions. Ours is saying they have to be repaid despite me having it in writing from the Nationwide that they are restrictions and we only have to notify them of the sale, they are not final charging orders. Also, how can you tell on the deeds? I have also been told that the Land Registry don't update the deeds from restrictions to final charging orders. Help!