Charging Order? The myth

englishmade

I have been following all your posts with interest. I have 2 x charging orders registered against our jointly owned home. The debts are on my side and the Land Registry have informed us we have a restriction on my side. We are also thinking of selling our home this year. In my view; The buyers solicitor will require an undertaking from the sellers solicitor to clear these charges on completion of sale. Our solicitor will become liable under the undertaking to discharge these amounts. Therefore, I can't see how we can avoid a payment to the persons holding the charges, irrespective that if the property were sold the charging orders could not be implemented as they are applicable to the person and not the property ( they fall away). The only way it can work is with the buyers agreement which would mean our solicitor would be releived of any obligation to discharge the debt,( if they understand the LAW). I'm sorry to spoil the discussion but that's the way I see it. The chances of avoidence are very limited.

Sparklyfairy

Englishmade, I think you are getting rather muddled in what could happen. Please take the time to read the entire thread. You will see that people have gone on to sell their homes & keep their money. Any solicitor who knows their duty will understand that the restriction falls away upon completition. The duty for the buyer's solicitor is to inform the holder of the charge the sale has taken place. That's it. Eggbox has confirmed this with a LR solicitor.

Sparklyfairy

Also, just to add that I have read that a creditor could go back to court to try to obtain another co (restriction) after original restriction fell away upon completion OR they could make you bankrupt (v. expensive for them) or try to get an attachment of earnings, etc..but I haven't heard of this happening & appears to be quite rare.

dawnyp64

Hi Englishmade..
Its my understanding that the sellers solicitor doesnt have to do anything on completion of sale,that has a relevance to the sale going thru..My buyers solicitor wants the restriction removed BEFORE going ahead with the sale. What you need to remember is this:
a restriction is a requirement of the buyer/buyers solicitor to notify the creditor of the sale ONLY..it is not an equitable charge(joint mortgage,joint debt=automatic repayment to the creditor),AND it is a beneficial interest in the debtors share of any equity gained from the property,NOT the property itself.
Also to they would need to notify the LR of the same ,providing proof of the notice to the creditor.
The creditor should then,once the debtors share has been raised,make a legal claim for that share.

Im sure if iv got it wrong,Eggbox or one of the others will correct it...but thats my understanding of the situation...

eggbox

Englishmade

Their is no obligation for a Solicitor to discharge a debt under the terms of the Form K Restriction. It merely requests the buyer or the Solicitor to notify the Restriction holder a slae is being made.

There is also no time limit set down in the Form K's terms, either, meaning the Restriction holder can be notified after the sale is completed.

englishmade

Hi Everbody, Yes, I do understand how a (sellers) solicitor should act as there is no obligation for the (sale) solicitor to deduct sale funds to a charging order creditor only to inform them of the sale at the time of exchange (the transfer document sent to the land registry). However, the problem comes when the (buyers) solicitor requires all charges entered on the charges register be discharged. The charging order creditor will not withdraw the charge without payment. Okay, the charge cannot be enforced by the creditor after the sale is completed, but they remain on the property title. Would you be happy to buy a property on this basis?
I agree, it can be done, but in reality it won't work with the either the buyer or sellers solicitors. Hope I am wrong.

englishmade

Hi Dawnyp64, The problem you are having is with the buyers solicitor not understanding or wanting to understand the legislation in place. I'm afraid most of them will run scared to avoid being sued or reported to the Law Society. Sorry to be so neqative.

terryw

englishmade wrote: »

Hi Everbody, Yes, I do understand how a (sellers) solicitor should act as there is no obligation for the (sale) solicitor to deduct sale funds to a charging order creditor only to inform them of the sale at the time of exchange (the transfer document sent to the land registry). However, the problem comes when the (buyers) solicitor requires all charges entered on the charges register be discharged. The charging order creditor will not withdraw the charge without payment. Okay, the charge cannot be enforced by the creditor after the sale is completed, but they remain on the property title. Would you be happy to buy a property on this basis?
I agree, it can be done, but in reality it won't work with the either the buyer or sellers solicitors. Hope I am wrong.

I am working from memory here. The standard contract for the purchase and sale of property states something like:
"All charges must be discharged on or before completion"

but this is the crux of the whole thing as I understand It

This is a restriction NOT a charge. The restriction is far less onerous and only requires notification to be sent, not payment of the amount outanding.

dawnyp64

firstly..my 'c' isnt working on my laptop (just noticed a couple of mistakes!lol)
now back to business..
terryw..i agree with all you say and thats been my understanding of the whole situation..however both solicitors seem to be of the same opinion of englishmade..and the buyers solicitor wont budge on this matter.
Im now wondering whos in the wrong here.
Everything that you all have said on here makes sense,can be backed up as fact and seem to be the way forward,BUT,the solicitors do not see it that way..how can that be??..if its the law,why are they not abiding by it??..all i know is,if this sale doesnt go thru,it WILL most definately be repossessed..and im getting to the point where i dont actually care..its made me ill!!..

harisumo

dawnyp64, so sorry to read about your predicament, i can only say it's such a shame that earlier contributors to this thread, who have had successes in selling their properties and getting their restriction removed, have gained knowledge from this thread but never shared their experiences to help other people in the same boat