Charging Order? The myth

eggbox

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mainstand

Just discovered this thread, and have a couple of questions. I have 4  Interim charging orders on my account, all registered between13 and 15 years ago. 2 of these for my late wife (deceased 2011) I note that all orders are of an ""interim nature, and listed as "Restriction". An example is shown below, with reference numbers removed.


RESTRICTION: No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to HSBC Bank PLC (Co. Regn. No. 00014259) at care of D G Solicitors, 12 Calthorpe Road, Edgbaston, Birmingham B15 1QZ (Ref. No. xxxxxxx) being the person with the benefit of an interim charging order on the beneficial interest of (deceased wife) made by the xxxxxx County 4 2008-10-23 Court on 1 October 2008 Court Ref. xxxxxx

The main mortgage on the property was in joint names at the time, (in fact it still is).

1) As my wife is deceased, are the charges pertaining to her only still valid, ie, will still need to be settled when the house is sold (which will be when I die)? Could they be removed before then?

2) I do not really understand the term "restriction". I also do not understand why a final charging order was never made, does this make a difference?

Hope somebody on here can clarify the position. I am being chased constantly by Mortimer Clarke Solicitors for a order against me from 15 years ago. There was nothing in the CCJ which said I had to repay anything, so simply assumed everything would be settled on the sale of the property, previous advice on here suggested I should not be concerned about this, I hope this is still the case.
Sorry for the long-winded post, thanks in anticipation

mainstand

... can anybody advise please?  Thanks

eggbox

mainstand

The Charging Order that the Restriction advises is still valid, but the creditor would now have to seek repayment from your late wife's estate (Land Registry Rep may be able to expand on this is he's around)

To explain, a "restriction" is a notification of a charging order being made against a joint owner of a property. If the property is jointly owned, but only one owner owes the debt; then a charge can't be placed on the register (deeds) as both owners own 100% of the property which is indivisible in that form.

Therefore, the Law allows a "restriction" to be placed on the register notifying that one of the owners has a CO on his share of the properties "beneficial interest" (equity value). If a CO is made in this scenario, joint owners then become "tenants in common" which each owner no owning a 50% share of the property (unless another share split is already advised on the register.) The creditor can then only claim on the debtors share of the property.

Because of the above, creditors rarely push forward to a "final CO", as an interim gets them the same - which is a restriction being placed on the debtors deeds.

Regarding Mortimer Clarke's letters, just put them in the bin. They are a bottom feeding company that act for debt collection company's and the only way they could enforce the debt further is to apply to the Court for an "order for sale" . This is where they apply to the Court to force you to sell your house to recoup their debt owed.

Creditors almost never apply for this type of order, as the decision to grant an order for sale is totally at the Judges discretion. As Court records show they are only granted less than 0.05% of the time, creditors know they are a waste of time and, more importantly, money. Do a Google search for a Judge granting an OFS for a loan or credit card debt and you will struggle to find any.

So just ignore them as they are fishing for repayment, any monies they do receive will only available after you've passed away and the house is then sold. Should you wish to sell the house before that time, however, this thread is showing how property can be sold without settling any repayment from the sale proceeds. 

Land_Registry

mainstand said:

... can anybody advise please?  Thanks

I can only advise on 2) as the remainder would be for eggbox or others to comment on 

2) I do not really understand the term "restriction". I also do not understand why a final charging order was never made, does this make a difference?

The restriction referring to your late wife is a form K restriction. A restriction is one of three ways an ‘interest’ such as a charging order can be protected 
https://www.gov.uk/government/publications/charging-orders

This thread focuses on such form K restrictions and how the wording is crucial to understanding their impact and how they are complied with depending on what you want to do re the property such as sell or mortgage. 

There’s no difference from a purely registration perspective between an interim and final charging order - they are the same ‘interest’/debt 

mainstand

Thank you both very much, your expertise is much appreciated 

Land_Registry

Appears we appears we weren’t typing at the same time. So with regards ….

“The Charging Order that the Restriction advises is still valid, but the creditor would now have to seek repayment from your late wife's estate (Land Registry Rep may be able to expand on this is he's around)”

How the debt is dealt with now following her death we can’t advise on. You’d need legal advice for an answer to that point 

Worryworm21

Hi and thank you in advance for any replies. I have read through some of the forums and seen some of the advice which has been helpful, just wanting to get it straight in my head before proceeding. 
 

several years ago myself and my husband got into a bit of debt due to some bad decisions financially and very low incomes. I ended up with 2 ccjs which have now dropped off our credit file and we are in a much better place financially.

One of the ccjs I am still paying as an AOE direct from my salary, however the original lender has sold the debt several times and I have no idea who owns it, several companies have contacted me and none seem to be aware of this so I have no idea where the money is going, as it is an AOE I can’t stop it. 
 

the other (HFC) had an arrangement in place but I haven’t paid since 2019 and not heard anything, however company is restons solicitors. 
 

my husband and I are now wanting to move homes, we have found a house and sold ours, however I have since found out I have 2 restriction ks in my name and I am worried that this could prevent our sale going through.

I have instructed a solicitor who said they can help with them but I am worried they will contact restons (the other I’m not as concerned seen as it has been passed on and the original lender has closed) and they will try and stop the house sale. 
 

I know the restriction has no requirement to be paid on sale, I am just worried they could do something to stop it, we only have enough equity for the deposit for our new house so cannot afford to pay them from the proceeds

I’m really worried something will go wrong and we will be stuck in our house (which we aren’t paying off due to one of the bad decisions and a ridiculous mortgage we signed up to at the age of 21 making us mortgage prisoners) please advise if there is anything we can or need to do? 
 

thank you 

 

the wording of the restrictions are:-

 

RESTRICTION: No disposition of the registered estate, other than a disposition by the proprietor of any registered charge registered before the entry of this restriction, is to be registered without a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to FGA Capital UK Limited (Co. Regn. No.02739931) at DWF LLP, 1 Scott Place, 2 Hardman Street, Manchester, M3 3AA (Red), being the person with the benefit of an interim charging order on the beneficial interest of xxxx) made by the on xxx (Court reference xxx).

 

 

RESTRICTION: No disposition of the registered estate, other than a disposition by the proprietor of any registered charge registered before the entry of this restriction, is to be registered without a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to HFC Bank Limited (Co.
 

Charges Register
Regn. No. 01117 at Restons Solicitors Limited of Trinity Chambers, 800 Mandarin Court Centre Park, Warrington, WA1 1GG, being the person with the benefit of an interim charging order on the beneficial interest of Miss xxxx made by the xxon 2013 (Court reference xxx.

eggbox

Worryworm21

Firstly, the creditors with registered restrictions have no power to prevent a sale proceeding, so don't worry on that score. However, you do need to understand that the biggest obstacle you need to get over, if you want to sell without paying the charging orders on completion, is the solicitor you use. You need to ensure that whoever you use, fully understands you do not wish to proceed with the sale if the solicitor concerned insists on settling the charging order debts upon sale.

I'd go as far as obtaining written agreement on this, when getting them to act for you. This is because you will see from the thread, that we had a recent case where the solicitor agreed to act as the seller wanted, but reneged on the agreement and settled the outstanding debts. So its vital you use a solicitor who will follow your instructions and understands YOU are paying them for their services.

With regard to your AOE, it is possible to apply to the Court to suspend the payment if its causing financial difficulties. But you should be able to find out who the payment is going to from the bank account details the payment is made through.

Worryworm21

Thank you @eggbox that is reassuring they cannot stop the sale. 

I have appointed a solicitor who stated they deal with restrictions but have not gone into details, should I contact them and advise if the above before proceeding do you think? 

Thank you