Charging Order? The myth

KathrynConfused

Apologies to post again but I would appreciate some clarification if anyone can help? When an Interim Charge is made Final, are the deeds updated? I have spoken to the courts who dealt with the Charge, they say categorically that the Deeds are updated. The Land Registry says not. I just find it hard to believe as, otherwise how do you know? They said you have to ask the creditor but who would want to do that?

Land_Registry

KathrynConfused said:

Apologies to post again but I would appreciate some clarification if anyone can help? When an Interim Charge is made Final, are the deeds updated? I have spoken to the courts who dealt with the Charge, they say categorically that the Deeds are updated. The Land Registry says not. I just find it hard to believe as, otherwise how do you know? They said you have to ask the creditor but who would want to do that?

You’ve asked us already of course but a creditor can, if they wish, protect their charging order by registering it when the interim order is granted. 

If they get a final order they can if they wish apply to register that as well and/or cancel the previous protection from the register. It’s very rare that they do as the interim is enough from a registration perspective as their protectable interest hasn’t changed 

KathrynConfused

Sorry, I was just seeking clarification. Thank you for your answer.

Steve7811

Land_Registry said:

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  

Further to the above, despite writing to Lloyds two weeks ago (letter received on the 24th) they have not been in contact and I wrote to Santander stating the following:

1)      The entry in the Land Registry is a “restriction” not a charge. This only affects my interest in the property, not my wife’s and as such it is only my share of any sale that could be challenged.

2)      The entry only states “no disposition of the registered estate shall be registered without a certificate signed by the applicant or his conveyor that written notice of the disposition was given to Lloyds TSB” . Whilst the Land Registry do not have a definition of the word “disposition” it is generally taken to mean the sale of the property, so the restriction here would not apply.

3)      Although the Land Registry do not have a legal definition of the word “disposition” they do have strict guidance on what constitutes an entry (registration) in the register. That is when a property is sold, charges are entered onto the register or charges are removed. When a mortgage term is extended no entry is required.

Today I had a voicemail from the man at Santander, obviously prompted by the letter asking if we had permission from Lloyds to go ahead, despite me making it clear in the letter we had not heard anything! I get the feeling we are stuck in a loop, Santander wont extend without permission they don't need and Lloyds wont give permission as they don't understand or care!  

Land_Registry

Steve7811 said:

Today I had a voicemail from the man at Santander, obviously prompted by the letter asking if we had permission from Lloyds to go ahead, despite me making it clear in the letter we had not heard anything! I get the feeling we are stuck in a loop, Santander wont extend without permission they don't need and Lloyds wont give permission as they don't understand or care!  

There’s nothing we can really add here as very much up to Santander to decide whether they will/can extend and if so on what terms. 

How you challenge that decision would most likely be by escalating it with Santander themselves. Lending processes are just that, a process, so to change the outcome/decision would also follow a process for example speaking to the next ‘up’ the command chain or using their complaints process. 

wmat983

Hi guys I've read through some of this thread and a bit confused. I was wondering if someone could clear this up.

So if a creditor wished to secure a debt to property they would apply for a charging order form k restriction, this basically doesn't stop you selling property but let's creditor know AFTER the sale that the house has been sold?

If they go back to apply for full charging order then you cannot sell the property until debt is paid by any equity first?

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welshmatt983

"So if a creditor wished to secure a debt to property they would apply for a charging order form k restriction, this basically doesn't stop you selling property but let's creditor know AFTER the sale that the house has been sold?"
If a property is jointly owned but only one of the owners is responsible for the debt, then a creditor (after obtaining a CCJ for the debt) can apply for a Charging Order against the debtors Beneficial Interest (equity share) in the property. However, unlike with a sole owner who owes a debt where an equitable charge can be registered on the deeds; the creditor can only register a Restrction in the above scenario. 

For the debtor to be able to sell their house the terms of the Restriction registered must be complied with to allow the Land Registry to transfer the property to a new owner. If the Restriction is a Standard Form K; then the only requirement is to notify the creditor the property is beng sold along with verification to the LR this has been carried out. Whilst you can notify the creditor after sale, you must verify to the Land Registry the debtor has been notified before any transfer can proceed.

"If they go back to apply for full charging order then you cannot sell the property until debt is paid by any equity first?"
No. Whether the CO is Interim or Full, it doesn't alter the terms of the Restriction applied as explained above.

 

KathrynConfused

Back again after a couple of posts and still following as our solicitor has told us that we HAVE to repay our restrictions or they cannot proceed with the sale. I have kindly been recommended a solicitor from two posters on here who have expertise with these things but they are not taking on any new cases at the moment. Please PM me if anyone has any experience with a decent solicitor. Or can send me the link to the government page that deals with charges, I cannot find it. Thanks in advance to anyone who can help

KathrynConfused

Update ... we're screwed. Our solicitor has written to the restriction 'holders' asking for redemption figures stating they will be paid on completion of the sale. So disappointed 

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Kathryn confused

How much are the CO's for?