Charging Order? The myth

bobbingo

Had a fantastic reply :-

Many thanks for your email.  In the normal manner we would write to the parties with the benefit of the restrictions.  If all they require is notice of the sale then they will provide us with the necessary certificate to comply with the restriction, we would also have to provide to the buyers a Land Registry form to remove the restriction also, which the beneficiaries of the restrictions would also need to sign. However, if to satisfy and remove the restriction there are funds involved you will be notified as soon as we are aware.  If you do not agree with the beneficiaries’ terms, then this would then be for you to deal with, and if necessary revised information would be needed from the beneficiaries in order to proceed.   We will not be able to exchange unless we hold the signed certificates and forms to remove the restrictions, as these are required by the buyers lawyer to accompany their application to change the register.

 

i will reply and let them know they are wrong.

eggbox

Yes, professional solicitors not understanding the profession they are in 🙄

fatbelly

Not surprised

bobbingo

getting the same from various other solictors

We can deal with your sale on this basis and provide the relevant certificates confirming that we have provided the beneficiaries with the relevant notice. However I would imagine that your potential buyers would not want to proceed without the restrictions being removed.

Therefore it is likely that we would need request that they be removed from the title and we would need to provide an undertaking that the correct paperwork to remove the same was provided on completion.

 

The land registry will not remove the restrictions without a valid RX3 or RX4 and these would need to be provided by the beneficial owners of the restrictions. We would need to request the same at that point.

Is there a simple write up with talks about the charge becoming over reached and forms RX3 and RX4?

eggbox

Yes there is will send over tomorrow as out at the moment

eggbox

Bobbingo

The details you need to explain are,

1. The Land Registry will confirm that it is the terms of a Restriction that are crucial and it's those terms that must be complied with, in order to register a new owners details.

2. In both Restrictions registered, the only requirements are for "a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition"  was given to the creditor

3. Therefore, all that is required to comply with both Restrictions terms is for the buyer (or their conveyancer) to notify the creditor that the property is being sold, and then confirm to the Land Registry that this notification has been carried out.

4. The seller (or their conveyancer) does not have to do anything to comply with the Restriction's terms, and no certificate from the creditor (stating they have been notified of the sale) is required.

5. It's also important to note that there is no time period given in either restriction, when the notification or certification has to be carried out. Only that it must be done.

6. There is no legal requirement to remove a Form K Restriction prior to the sale proceeding. If a buyer is concerned regarding the Restrictions removal, they can be assured by the Land Registry Practice Guide 76 Section 4 Paragraph 3 which confirms that the Land Registry will,

"automatically cancel the Form K restriction once it has been complied with on registering a transfer of the registered estate for valuable consideration (except where the transfer is to one, or more, of the existing proprietors). We will assume that if the debt secured by the charging order has not been paid, your client’s interest will have come to an end with the postponement of the charged beneficial interest under section 29 of the Land Registration Act 2002"

7. The above cancellation happens as overreaching occurs when capital monies are paid by the new owner.

8. With regard to any conveyancers having concerns about passing all the sale proceeds to the buyer upon sale, they can be reassured by the recent case law of Dattani & Anr v Rasheed & Ors which ruled that knowledge of a Form K beneficial charging order restriction is not enough for a conveyancing solicitor to be fixed with a constructive trust or dishonest assistance liability in relation to the proceeds of sale.

bobbingo

Many thanks,  replies sent.  I've been surprised by how many solicitors haven't responded to an email.  clearly don't want my money!

boomans12

I’m so glad I have found this thread! 

My ex husband had a charging order placed on the house this year!! We are joint owners but the debt is his name so it can only be a restriction from what I now understand. He is refusing to pay it off and won’t so anything to help. It’s nothing to do with me and I don’t have any funds to clear it. I’m currently in the process of getting a remortgage with new lenders to finally put the house in my name only but obviously need to sort out the restriction.
Does this follow the same rules then as only having to inform the creditors ? My ex husband is not having any money from the transfer because he has already had it.
I’m really struggling to find any solicitor that understands, any advice?

eggbox

Hi Boomans 12

Unfortunately, the same rules don't apply to a transfer as overreaching doesn't occur to remove the Restriction.

boomans12

Hi eggbox.

Im not sure I totally understand the over reaching part.
I have tried to look but still dont.
As part of our divorce and consent order I had to give him a lump sum of money and buy him out of the house, he received £60k from me as a result. I could not take his name off the mortgage at the time because we were locked in so he had the money (agreed by the court) and now im in a position to get my own mortgage. Annoyingly he has received the restriction yet he actually has no beneficial interest in the property as signed out of that when we did our consent order and he received money.
 Does this change anything? I think it may not from now re reading it.
any advice about trying to get in cancelled ? Success rate ? I have a consent order from the courts which outlines the money he had for the property and as a result has no beneficial interest in it prior to the charge being put on.