Charging Order? The myth

Angelcrackers

@eggbox this is where I'm struggling then and keep re-reading because earlier you were saying about a mortgage company would lend unless the restriction is removed for any purchaser. That's the bit I'm struggling with. How will the purchaser secure a mortgage if it is dependent on our solicitor waiting until moving day to advise the creditor's we have moved? 

Just to be clear on my personal situation. These are just in my name, one is to a creditor who doesn't exist anymore, two were probably statue barred and obtained without my knowledge and th other one I fought at the time on the basis of fees having been added but judgement went their way. I've tried to offer partial settlements but they won't accept. So my plan would be to move and then go back and try to negotiate with the remaining ones once they are back at CCJ level. These all date back to between 2013 and 2017 so none are on my credit file now. 

Land_Registry

Angelcrackers said:

@eggbox this is where I'm struggling then and keep re-reading because earlier you were saying about a mortgage company would lend unless the restriction is removed for any purchaser. That's the bit I'm struggling with. How will the purchaser secure a mortgage if it is dependent on our solicitor waiting until moving day to advise the creditor's we have moved? 

@eggbox is the go-to poster re this thread but something to add to your mix here that may, or may not assist.
The shared guidance on here with regards how HMLR deals with the form K restriction is based on automatic cancellation of the restriction on a sale/purchase provided the restriction has been complied with. 
Compliance effectively means following the wording of the form K restriction, namely providing "a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to ......"
There's no timescale with regards how much notice is given of the disposition. It is not therefore linked to a moving date or telling anyone you have moved.
And it's also important to note the wording re the certificate being given by the applicant (buyer) or their conveyancer, so not you as the seller or your conveyancer. Whilst you/your conveyancer may well be the ones to notify the creditor of the disposition the buyer/their conveyancer are the ones who have to be sure that you have and therefore able to give the required certificate.
So the real issue re that specific point is one for your conveyancer/the buyer's conveyancer to clarify who is going to notify the creditor re the disposition, namely the actual Transfer (not moving date etc). And thus enable the buyer's conveyancer to certify that the restriction has been complied with - that certainty is what then enables the buyer to complete and to also satisfy their own 'new' mortgage lender (if any)
Hope that helps but please do wait for @eggbox's own reply and additional expertise

Angelcrackers

@Land_Registry no that does help thank you. It's a tricky one. We aren't trying to get out of paying what we owe, now that we know we owe it, we would merely like to move first. But everything has been rather up in the air now. I'll speak to a conveyancer and see if they would be willing to proceed I guess.

eggbox

Angelcrackers

As I said previously, it's not what is explained on this thread that isn't correct; instead it's solicitors/conveyancers mostly not understanding that compliance of Form K Restriction only requires what Land Registry Rep has explained above, for a change of ownership to proceed.

Further, even when the information is explained to them, many are still reluctant to help as they are worried they may be doing something unlawful (which they aren't), with several posters reporting back that many solicitors still doubt the information the Land Registry has given. It's those issues, unfortunately, that you have to find a work around to, not the Form K details explained in this thread.

If you conveyancer needs any convincing, you are to welcome to send me their details in a PM.

Angelcrackers

Thanks @eggbox I appreciate all you do on this thread and I'm sorry if I've come off as aggressive or stupid. It's just despite thinking I had it straight in my head, the broker really confused me again. I've got it straight now. 
Conveyancer seems a bit clueless, so I think I might be better starting again with another one. If anyone has any lone they have used who understands this process I'd be keen for a DM recommendation. 

Thanks again 

eggbox

Angel crackers

I don't think you're angry or stupid, you're just experiencing the frustration of not being helped by conveyancers. 

We're constantly looking to find conveyancers to help and I'll always update the board if I find any. 

But one if the things you can do is to PM the posters on here who have sold successfully and find out who they used?

I would say another alternative (although I'm not saying it's easy) is to look for a cash buyer only and then consider renting or a period of time. This eliminates any mortgage companies being involved and  insisting on the Restriction's removal prior to sale.

You can explain to a cash buyer that they can hold on to the funds covering the debt until the Restriction is shown to be removed. I'm pretty sure some posters have done this when selling up.

This then leaves you free to search for a mortgage later on unimpeded by the Restriction problem.

FizzyFil

Hi, please forgive my ignorance but I am absolutely bamboozled and my head is battered with all the information out there! I’ve tried to make sense of all the comments in this thread as per my situation but I am struggling. My husband and I have a joint mortgage. We each have individual charging orders on our property - 35k and 10k. We are trying to move house and our creditors are telling us we have to pay our outstanding debts in full - Northern Rock/Cabot Financial/Mortimer Clarke. I’ve offered a 60% settlement but they are not budging. I am confused re where we stand legally. Any advice will be gratefully received.

eggbox

Fizzyfit

A Court has made a legal Judgement that you owe your creditors money (presumably for loan or credit card debts.) As you haven't paid them, they have "secured" their debts on your property. This means they have a legal right to receive the money when you sell the property.

However, as anyone who has secured a Judgement understands, being legally entitled to the money and actually getting the money from a debtor, aren't the same thing. This is because the Law does absolutely nothing, unless a creditor takes further action, when a debtor doesn't pay up.

So with that in mind, this thread is explaining that a Charging Order secured against a debtor who jointly owns property, but only one of the joint owners is responsible for the debt, can only be registered on the property deeds as a restriction.

In the overwhelming majority of cases this will be a Form K restriction and, as this thread explains, it offers very weak security to the creditor. This is because all that is required to sell a property with a Form K Restriction on the deeds, is to comply with the restrictions terms.

Those terms are simply to notify the creditor the property is being sold, and then the Land Registry that the notification has been complied with. That's it. 

Further, as there are no time restrictions placed on a Form K's compliance; the creditor can be notified at the very last minute, making it extremely difficult to request the monies they are due.

Once the new owners details are registered on the deeds, then the Land Registry will automatically cancel the  Restrictions as they become overreached?

The reason your creditor won't accept anything less than the full value is because they have no need to. Despite what is explained on this thread, most conveyancers will still want to pay the creditors when you sell your house. 

The creditor also currently has the full debt you owe showing on their balance sheet. They won't, therefore, want to reduce the amount as it weakens their companies overall financial position.

But there is nothing a creditor can do to prevent you from selling your house if all they have is a Form K Restriction registered. But I do have to caution that if you were successful in selling your house without paying the creditors, but your intention was to purchase another house with the same debtors registered on the deeds, then it wouldn't be too difficult for a creditor to cause you problems again.

So you need to be smarter than that, if you are planning to use the details on this thread.

fatbelly

Was this the dreaded Northern Rock Together Mortgage?

Your first job is to check what is actually entered on the charges register. It now costs £7 as the fee more than doubled yesterday. You need the title register.

https://www.gov.uk/search-property-information-land-registry

What is your conveyancer telling you?

FizzyFil

Eggbox

Thank you so much for your expertise (and very rapid response). I have accessed the title deeds and the wording is thus:

2007-10-01

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 Northern Rock PLC at care of Wallers Solicitors, Merchant House, 30 Cloth Market, Newcastle-Upon-Tyne NE1 1EE (Ref: *********) being the person with the benefit of an Interim charging order on the beneficial interest of **** made by the Gateshead County Court on 20 August 2007 Claim Number ***** 2014-10-30 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 Arrow Global Guernsey Limited (Co. Regn. No. *********) at Wilkin Chapman Solicitors, PO Box 16, Town Hall Square, Grimsby, North East Lincolnshire DN31 1HE (ref:********), being the person with the benefit of an interim charging order on the beneficial interest of ********* as made by the County Court at King's Lynn on 18 September 2014 (Court reference ********) There is no mention of these being 'Form K Restrictions' - are they? Is the fact they are Interim Orders material, or is that no different to Final Charging orders (which I'm certain we were issued with)? Fatbelly No, it wasn't a Northern Rock mortgage. We don't have a conveyancer as yet but it seems from other people's posts they're not easy to come by...