Charging Order? The myth

eggbox

https://forums.moneysavingexpert.com/discussion/comment/81957476#Comment_81957476

You're largely right but for other people reading this; it should be understood that a creditor with a Charging Order does have the right to apply for an Order for Sale on, either, a solely owned or jointly owned property.

Any agreement from the non debtor who jointly owns the property is not required as the Law gives them no say on this matter.

However, it should also be understood that Orders for Sale are rarely sought by creditors (especially for consumer debts) as they know its virtually impossible to get a Judge to grant them as they are almost always family homes.

tksnota

I this scenario Partner 1: Has CCJs; Partner 2: Has No CCJ; Both owned a mortgage property; currently have Form K restrictions

Question 1. What is an equitable restriction? Is it enforceable when the property has no mortgage and both Partner 1 & Partner 2 owned the property? Will they need to get paid before or after acquiring the property? Will they need to be paid when selling the property?

Question 2. If the mortgage property has been fully paid, can the Form K restrictions be converted to equitable?

Question 3. If Partner 2 just owned the new mortgage free property under his/her name and Partner 1 lived there and used it for all his/her correspondences, will any restrictions be applied?

Question 4. Aside from equitable restriction, will the there any other or different ones be applied for co-owned property without any mortgage?

Thanks…tksnota…

timbucks

This thread has been very helpful. I have some restrictions on our jointly owned property that the buyers conveyancers want to know how I plan to overreach them. I thought it was just going to be from proceeds of sale on completion date but it looks like it's simpler than that and I'll just talk to the beneficiaries after the sale has gone through as one of them is being paid off, but the other two I can't remember seeing any communication from them for many years, so hopefully can get a reduction on the amount due. The one I'm paying off said no to a reduced offer as they say the amount will have to be paid on sale of the property, which appears not to be the case now.

This is the restriction (same text apart from company, date) for each of them

(27.09.2012) 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 finance company at address, being the person with the benefit of an interim charging
order on the beneficial interest of me made by the court 2012 (Court reference ———-).

We've cleared the mortgage so that is the disposition of the registered charge part anyway done by the bank so the restriction seems to be of the same form as at the start of this thread

My main question is (and apologies if it has been answered somewhere in these 519 pages) what form does the letter/certificate have to take and what form does the buyers conveyancer have to send to LR after completion? We're using the same conveyancer as the buyer so they should be able to do that easily.

Thanks for any help.

1footinthegrave

1footinthegrave  23 May at 4:54PM

My husband died in 2025 and left everthing (he actually had only his pension no other assets apart from our home) to me in his will, I was the only beneficiary and also executor. I enquired on getting a lifetime mortgage as I now need the money released from the property to live out my days on, only to find that there are two restrictions in my late husband’s name, so I can not get a lifetime mortgage without the restrictions being removed. Also it seems that on the LR our home is now listed as tenants in common due to the restriction. I paid off our original mortgage in full with my own money from an inheritance back in 2020 so I am now wishing I hadn’t done that. Is there anyway that I can get the restrictions removed since the debts are not and never were mine. Also I don’t want to move as the property was bought as our final move and is only a small flat.

MouseCity

How do I find a conveyancer with experience of complex issues involving a joint mortgage, where one party (the debtor) has Form K restrictions registered against him, and the non-debtor is looking to do a transfer of equity with a new mortgage in her sole name (as the previous mortgage has reached end of term and there is still an outstanding balance of around £75,000).

The debtor is compliant with this but wants to do as little as possible as long as his debts are cleared.

The Form K restrictions are based on interim charging orders which were never finalised and date back to between 2007 and 2009. I have been told that an experienced conveyancer with experience in dealing with debt issues would know that these restrictions can be removed as they are no longer valid as they were never finalised.

Any help/ advice/ comments greatly appreciated - this thread has been absolutely invaluable so far!

eggbox

Mouse City

Is the £75,000 owed to the mortgage lender or is the value of the Charging Orders?

Unfortunately, the interim CO's will still be seen as valid, whether finalised or not, as they are still on the register. This is why a lot of creditors don't proceed to a Final Order as it costs them time and money with no extra benefit being gained.

The only way you will be able to get the Restrictions removed will be to, either, get the creditor who registered the Restrictions to remove them using Form RX3 or, as this thread explains, sell your property to a third party (either with or without passing the funds over to the creditor at the point of sale) whereby, the Restrictions are cancelled upon the new owners details being registered)

MouseCity

Thanks, Eggbox. The £75,000 is owed to the mortgage company and the outstanding debt amount is around £75,000 too (still trying to trace where the debt from the restriction registered by Egg Banking plc now sits and how much it is).

Based on your answer my plan is probably going to try to be to settle with the creditors for a significant reduction if they will remove the restrictions and then do the transfer of equity. Unfortunately, time is short as we defaulted on our mortgage in November 2025 - the bank have been understanding in giving me time to find a solution but could repossess at any time. The equity in the debtors 50% share doesn't cover the debts.

In your experience, are creditors such as Link Financial, Intrum, MCS, Barclaycard (if they hold the Egg debt) and Overdales likely to accept 30-50%?

eggbox

Mouse City

Given the details you have given, my advice would be to sell up if the mortgage holder isn't willing to help further . You will still have to settle the 75k mortgage owed as that debt will be an equitable charge, but you wouldn't have to settle the debts owed under the Restrictions registered.

In my experience (and you will find plenty of examples on this thread) Debt Collection companies don't accept lesser amounts if they have a Restriction. However, I think this is because they believe they have security on the full amount of their debt through the CO.

But it may be worth explaining to the DCA's that they may receive nothing if the house will likely be repossessed if they don't accept less. This is because if repossession happens the mortgage company, as first charge holder, has the right to wipe off all other charges on the register to enable them to sell the property.

This means they no longer have a Restriction registered and this, I believe, means you will then receive any surplus from the sale proceeds (if Land Registry Rep is looking in he may want to comment on this bit)

MouseCity

Thank you, Eggbox. You're a star ⭐️.

Land_Registry

https://forums.moneysavingexpert.com/discussion/comment/82055975#Comment_82055975

I probably wouldn't explain the following bit in the same way as you have Eggbox but I get your drift although we don't deal with the slicing of the debt cake for example so can't be definitive on anything but the repossession point you are making

"But it may be worth explaining to the DCA's that they may receive nothing if the house will likely be repossessed if they don't accept less. This is because if repossession happens the mortgage company, as first charge holder, has the right to wipe off all other charges on the register to enable them to sell the property.

This means they no longer have a Restriction registered and this, I believe, means you will then receive any surplus from the sale proceeds"

If the property is repossessed, and there's a timespan and legal proceedings for the mortgage lender to navigate first, they are able to transfer/sell it to a new owner.

The buyer can then register and any 'later' charges and third-party interests invariably fall away - see our PG 75 for guidance on how it plays out from a registration perspective

Transfer under a chargee's power of sale (PG75) - GOV.UK

Wiping off all other charges might be a little strong as each and every scenario, property, series of third party interests etc are unique and have to be treated on merit. But as a general point it's a fair one.

The mortgage lender takes receipt of the sale proceeds but what then happens to any surplus would not involve us so not something I can usefully comment on