Charging Order? The myth

Poppy2740

Thank you eggbox, 
I will speak to them tomorrow to see we can sort this out. 

I will let you know how I get on. 

Thank you again. 

Jcbkabs

in0125 said:

EUREKA.. I just got an email from my solicitior.. They have finally seen the light that the restriction does not need removing, and got the buyers solicitor on board as well...

Dear Mr ........,

I emailed the buyer's solicitors reiterating that (as per Land Registry Practice Guide 76) the Land Registry will cancel a Form K restriction on a transfer for value without application provided the terms of the restriction have been complied with.

The buyer's solicitors will need to lodge a certificate of compliance with their normal application for registration following completion.

The restriction simply requires that notice be given to Bank of Scotland.

The latest from the buyer's solicitors is that they appear to be accepting this provided that we can undertake with them that we have written to Bank of Scotland as required by the restriction and that we will assist them with any queries raised by Land Registry in relation to this - a) written notice has been given, and b) we can assist them with the Land Registry queries as required, so neither of these requests pose a problem.

Kind regards,

I’ve got the similar  problem with a charging order on a jointly owned property I’ve emailed the land registry practice guide 76 to my solicitor she’s saying she still has to pay it as it unethical not to unless I can find where in law it say she doesn’t have to as they could come after her?
so how do I find this in law as she won’t accept the practice guide?

Jcbkabs

FoxLark said:

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

Hi FoxLark what happened with this as this is what my solicitor is scared will happen to her ?

eggbox

JcbKabs

You need to turn this around and ask your solicitor where it states any conveyancing solicitor can be pursued for funds not handed over at the time the property is sold. A Judgement has been made that the creditor is entitled to funds realised when the property is sold. End of. Nowhere does the Law state the creditor is entitled to the funds at the point of sale, and neither does it state who is responsible for handing over the funds. 

The fact of the matter is, the creditor could only ever pursue the person responsible for the debt as the Law confers no responsibility on any other party involved in the sale as being responsible if the funds aren't handed over. There has been a long held practice of solicitors handing over funds to the creditor at the point of sale, however, its important to understand that the Law does not state this is what has to happen. 

Regarding her feelings on ethics, ask her how ethical she feels it is that Banks are still  able to advertise "unsecured" loans stating "Unsecured loans allow you to borrow money without offering up security based on a major asset, such as your home" then, if a  debtor defaults, the Law allowing the banks to turn the debt into a secured debt against the debtors home. So tell her (politely) she's talking nonsense about ethics.

The fact is, the Law only allows a restriction to be placed on the deeds of a jointly owned property where only one of the owners is a debtor. The restriction (normally a Form K) is very easy to comply with and offers creditors very weak security for the debt. It is, therefore, very easy for a seller to evade paying the debt at the point of sale. It is not the responsibility of the conveyancer being paid to act for the seller, to aid a sellers creditor in obtaining there money. If your solicitor disagrees, ask her where in the Law states she should aid the creditor?

As for her not accepting Practice Guide 76, simply tell her to up ring the Land Registry and they'll put her right. Unfortunately, you've just landed on another shyster who's more interested in covering her own behind before that of her her (paying) clients. 

Jcbkabs

Hi eggbox I’ve just sent her a articial I found in the property news on the Guildford chambers website written by a barista Mr Matthew pascall https://guildfordchambers.com/charging-order-works/. Very interesting read.
I’ve sent this to solicitor along with the land registry rules on jointly owned property and a also emails the Guildford chambers as I think my solicitor is wrong she even told me the restriction would become overstretched once the transfer was processed by land registry. If I’m right I believe this came into force 2003

eggbox

Jcbkabs

Yes, I think there is a link to that piece somewhere on the thread along with similar pieces from other solicitors firms. So let's hope it puts her right and she now understands that the law consists of a set of rules and regulations, whereas ethics comprises of guidelines and principles that inform people about how to live or how to behave. As no rules and regulations are being broken, there is no reason for her to be obstructive. 

Jcbkabs

Hi egg box 

my solicitor has refused to do as I ask and sent email stating they can no longer represent me if I wish to continue down that route anyone no a solicitor that will do what I’ve asked with this K restriction?

in0125

EUREKA.. I just got an email from my solicitior.. They have finally seen the light that the restriction does not need removing, and got the buyers solicitor on board as well...

Dear Mr ........,

I emailed the buyer's solicitors reiterating that (as per Land Registry Practice Guide 76) the Land Registry will cancel a Form K restriction on a transfer for value without application provided the terms of the restriction have been complied with.

The buyer's solicitors will need to lodge a certificate of compliance with their normal application for registration following completion.

The restriction simply requires that notice be given to Bank of Scotland.

The latest from the buyer's solicitors is that they appear to be accepting this provided that we can undertake with them that we have written to Bank of Scotland as required by the restriction and that we will assist them with any queries raised by Land Registry in relation to this - a) written notice has been given, and b) we can assist them with the Land Registry queries as required, so neither of these requests pose a problem.

Kind regards,

well the twist was on the day of completion my solicitor paid the Form K dispite me refusing..what a sneeky !!!!!!.

I'm taking it up with ombudsman but dont hold any hope.

It took me 10 weeks to simply get a reply from ombudsman asking me to send more info.. I'm keep this thread updated..

fatbelly

in0125 said:

well the twist was on the day of completion my solicitor paid the Form K dispite me refusing..what a sneeky !!!!!!.

I'm taking it up with ombudsman but dont hold any hope.

It took me 10 weeks to simply get a reply from ombudsman asking me to send more info.. I'm keep this thread updated..

Is that the SRA? And/or Legal Ombudsman?

https://www.sra.org.uk/consumers/problems/

I wish you luck.

Jcbkabs

Hi eggbox 

they’ve come back with 

‘Unfortunately doing what you propose risk a claim against us by the beneficiary of the form K restriction for breach of trust.

You could also face action against you by the beneficiary of the charging order as one of the joint trustees of the property.“

just need to find a solicitor that will do as I ask I’ve tried 10 locally none so far