Charging Order? The myth

eggbox

alewin

Firstly, valuable consideration means something of worth. This can be money but also, say, to pay off a debt owed.

When a CO is granted you cease to be joint tenants and become Tenants in Common. This means that unless other wise stated when the property was purchased; you each now own 50% each of the property. So she can gift her half of the property without any issue.

alewin

eggbox said:

alewin

Firstly, valuable consideration means something of worth. This can be money but also, say, to pay off a debt owed.

When a CO is granted you cease to be joint tenants and become Tenants in Common. This means that unless other wise stated when the property was purchased; you each now own 50% each of the property. So she can gift her half of the property without any issue.

Thank you very much for the reply and your time.

I did know about the Tenants in Common with relation to the charging order, it should now be 50/50 as the house was originally purchased as Joint Tenants.
So the other half owner could easily gift their share of the property without trying to find a conveyancer that is prepared to deal with charging order restrictions and having to pay of the debt first. It should not come into the equation as they are just dealing with their 50% share.

eggbox

Yes as the CO is only attached to your half of the property

tifo

eggbox said:

can I ask what advice NDL gave that could have disadvantaged you, as they have been fairly helpful in the past? 

I assume CAB or NDL would have said to inform the creditor well in advance of the sale and they would then have time to ask for their money back. These organisation never tell you legal loopholes.

With joint owners, this has always been the case with restrictions and it is very unfair how unsecured creditors can then secure these with a 'mortgage' on your home. You only get to know when you're sent an interim charging order, to be made final at a hearing. Generally the judge awards the order, whatever it is.

housebuyer143

I as a buyer had to recently contend with 3 charging orders on my recent purchase and what a nightmare it was. 
Can I just say, just because you find a lawyer that understands charging orders, does not mean the buyers does and it should therefore be established early on that the restrictions will not be paid off. 

After a failed completion and a lot of stress, it eventually went through and the title has been registered fine 4 months later but it shouldn't be assumed to be a simple process. 

Normally it's for the buyers solicitor to notify the creditors and certify to the land registry that it's been done, but if they do not understand form K it becomes a contentious issue. 

buyinghouse

This thread has been really interesting. 

We are currently buying a house which had 3 charges and one has been problematic (Egg bank plc). The seller's solicitor has now tracked down the creditor and they have completed paperwork sent by the creditor. 

We need to exchange contracts by next Monday and this paperwork was only returned on Friday. Does anyone one know the process? I am assuming this will not directly go to Land Registry now? 

FoxLark

Hi all,

So I posted back in June about my solicitor insisting we repay the creditors who held Form K restrictions on our property......well I finally managed to convince her that all she had to do was notify them of the proposed sale and we completed on 26th September. She sent out the notices on the same day. 

On Friday we had a message from her saying that she had been contacted by solicitors for one of the creditors wanting to know if there were any surplus funds from the sale. As instructed she went back to them stating that she was not authorised to give any details regarding the sale. Then we got a message from her stating that she had been e-mailed straight back with the solicitors for the creditor with the following stating that they are entitled to the information.

"Dear sirs

Please note we wrote to you following a letter addressed to us dated 26 September 2022.

Due to our Clients interest in the property, we’re entitled to confirm if any surplus funds were available following the sale of the property in order to satisfy our Client’s interest.

Please can you confirm if there are any surplus funds available to satisfy our client’s interest in the property.

We look forward to your response.

Kind regards

 

Charlie Simpson

Legal Assistant

Howard Cohen & Co Solicitors"

She has informed us that if we fail to give them the details of the surplus they will apply for a Court Order for disclosure of how the funds were distributed and will also seek costs and probably be awarded them on the basis that we could have given the information without them going to Court but chose not to......

So what do we do? We're not legally obliged to repay the debt upon sale of the property so why are they entitled to know whether there was any surplus? Their interest in the property is merely that they are entitled to notification of a proposed transfer surely and they are confusing this with an actual Charging Order rather than a restriction?

Does anyone have any advice because I'll be honest after reading the experience of many others on here who managed to sell without repaying creditors with Form K restrictions and who in fact never heard from them at all, I didn't expect anyone to actually contact us regarding it!

TIA

FoxLArk

fatbelly

She has informed us that if we fail to give them the details of the surplus they will apply for a Court Order for disclosure of how the funds were distributed and will also seek costs and probably be awarded them on the basis that we could have given the information without them going to Court but chose not to......

So what do we do? We're not legally obliged to repay the debt upon sale of the property so why are they entitled to know whether there was any surplus? Their interest in the property is merely that they are entitled to notification of a proposed transfer surely and they are confusing this with an actual Charging Order rather than a restriction?

Firstly, that's not a given. There are many legal avenues that are available - it doesn't mean that they will be used.

Secondly, it is not guaranteed that a judge would agree with them. As you say, the terms of the restriction were complied with..

This is not a secured debt (and in truth never was - they made a tactical error by applying for a charging order). If they want to enforce the ccj by another means (attachment to earnings, bailiff, third party debt order, statutory demand) then they can apply to the court for that order. If they don't have the information they need then they can apply for an order to obtain information.

eggbox

Just tell your solicitor to explain all the funds were passed to you. End of. Howard Cohen can threaten everything they like, there is no Law that states the money had to be repaid upon completion, only an order that they are entitled to the money. You are responsible for non payment, not your solicitor.

As anyone who has taken anyone to Court and received Judgement in their favour that someone owes you money understands - receiving the Judgement in your favour and getting repaid are two different issues. Howard Cohen knows his client has been stuffed on this as the Court does nothing to help the credtitor if a debtor doesn't repay as the Court has instructed.

As Fatbelly has stated, there are other avenues they can use so you just need to be prepared if they use any of those. The chances are, however, they won't as they are a business and will realise they will need to spend more money, time and effort pursuing the debt further. This is borne out by others who have sold as you have and haven't been pursued further.


 

Secut

subbing too.