Charging Order? The myth

harisumo

I don't know the exact details of this, but I was talking to someone recently who told me that someone they knew had had a Restriction handled 'incorrectly' by their Solicitor. When they had found out the real facts about Restrictions from someone else they had threatened this Solicitor with legal action and had subsequently been paid compensation by the Solicitor to avoid legal action being taken. As I say I don't know the exact details but if it is true then it sounds interesting?

eggbox

Harisumo

Whether your info is legit or not; Solicitors paying off a Form K Restriction and acting in in their clients best interests seem incompatible given the information received from the LR and the SRA.

I gave the SRA another chance to confirm that a Solicitor does have a legal duty to pay off Restrictions when acting for a seller but they have failed to respond. Funny that.

asparagus18

eggbox wrote: »

As I've metioned previously on this thread (and on CAG), a quick read up of the facts regarding OFS's and it's fairly easy to see that a creditors attempt to gain an OFS wouldn't get off the ground if the debt was for CCA regulated spending and the property is a the sole residence. So their rush to gain "security" and priority leaves them neutured regarding further enforcement.

Creditors obviously know this as under 5 in a 1000 CO's progress to the OFS stage (and I'd bet that those that do are not for CCA debt)and I'm sure they aren't overly bothered as they feel they will get repaid in the end.

Where do you get these figures from? And do you maybe have any links to further info on Orders for Sale, and how common (or not) they are?

Reason I'm asking is this:

We have a date for a FCO hearing in June, CCJ only issued in March, jointly owned property but debt (HSBC unsecured loan) in my name only. Therefore it will be a type K Restriction that is going to be placed on the house.

I left the UK permanently to live and work abroad (EU, and I'm not a UK national either) two months ago, my partner is staying behind in the house for the time being, and will do so for at least another year, unless we're forced into action by an OFS. He is neither ill nor disabled, and there are no children or elderly people living at the property.

How likely is it that HSBC will go for an OFS straight after the FCO? They don't know I no longer live in the UK, and I have no intention of telling them. I haven't responded at all to the initial claim, the CCJ, and I'm not going to attend the FCO hearing, or issue any written statement prior to the hearing, and neither is my partner.

In case HSBC are satisfied with the FCO and decide to wait until the property is sold "naturally", I know that all we need to do is find a solicitor who knows the fine (but crucial) points regarding restrictions - but we're worried they might take the next step straightaway. And if they did, would they then be entitled to the money under the CO, regardless of the (for them) "worthless" type K Restriction?

Any information or input would be much appreciated.

asparagus

eggbox

The stats are from the official Court Statistics which a search of google will throw up as to the amount of CO's made and also the amount of OFS applications.

Regarding your situation it is hugely unlikely HSBC would make any attempt to force an OFS as 1) they are virtually impossible to obtain and 2) the current conveyancing system is doing creditors jobs for them in paying off attached CO's notified by a Restriction when a house is sold.

And your other half has rights, too, as it is their primary residence as stated in this Goverment CO review (see section 3.1 second paragraph)

https://docs.google.com/viewer?a=v&q=cache:LOli4Ve8-78J:https://consult.justice.gov.uk/digital-communications/county_court_disputes/results/charging-orders-response-ia.pdf+national+court+statistics+charging+orders&hl=en&gl=uk&pid=bl&srcid=ADGEEShTQ6HIFCJXJJZNdtD-YPheuNh8ATfRXTspBjl0DCQtMMK4Xqdo6wuLijJ0DT_luya-hlmDz3Opyk3CRNIxeT9AmG-ByOvBaXgxjKRnm_jLhvHlteTpoXFGrspFFyKgEd54qsC6&sig=AHIEtbQ8-L-czF8XccejGOU4Pxl7lMDSFA&pli=1

abby16_2

Thought i would update you on current situation.

OH sent a ltr to solicitor agreeing for 50/50 split between us but that he disagreed to his half being paid to the creditors. Told them as property was in joint names and charging order was in his name only it was only a restriction and that money should be paid to him. Solicitor said she would have a word with a senior colleague. Senior colleague adv her to fwd his ltr on to the creditors solicitors which she has and they disagree with what he say's. Our or NR solicitors said they will transfer money to the court for them to sort out it out.

Therefore we have sent a ltr adv them not to send money to the court as they didnt even have the decency to reply to our queries as we intend to contact their complaints dept this week to make a formal complaint.

In the meantime i am still waiting for my share and the solicitor has gone on a weeks holiday so I wont receive it until the middle or late June some 2 months after the sale. But she did say to my oh that next time she would be in contact with him would be to adv funds had been transferred to the court. Fun how they can sort out court quick but not me

eggbox

abby16

Firstly, thank you for updating the thread (and for not being another person who just disappears and we never get to hear the full story!)

I did say your OH would probably struggle to get his share as it was already in the hands of NR who probably won't play ball. But don't give up as what you have shown is that Solicitors, when pressed on the matter, don't tell you that they have a legal obligation to pay the Restriction holder.

I would, personally, send another recorded letter in to the NR Solicitor and explain that as there is no legal obligation to pay any CO notified by a Form K Restriction when a sale of a property made; that you will have to hold them responsible for any time and cost of recovering the money from any third party they decide to send your OH's share to.

Stating this will be due to the fact that your OH has not given any permission, which they tried to seek, to pay the monies to any third party and to do so is a breach of their legal obligation to return excess proceeds from the repossesion sale to the legal owners of the equity surplus.

You have absolutely nothing to lose by doing this and it puts NR in the position of having to justify passing your OH's proceeds to a third party without his permission. As they knew they had to seek permission to do this originally (hence te letter your OH received) it would be interesting to see their response.

abby16_2

Hi oh has been in contact with the solicitors this week and it was passed to someone higher up the ladder but still no joy.

Basically he told them he didnt give them permission to send the money to a 3rd party and that they had no legal obligation to do so and that he wanted the cheque sent to him. They are refusing to do this as the other creditors want the money. She is now going to hold on to his 1/2 share of the money for 14 days and if she hasnt heard from us or are legal advisers the money will be sent to the court.

What i was wondering if this has happened to anyone else and if so did they win and who pays for the fees etc as if it was to come out of his share its whether there would be much left.

Or alternatively i thinking should we complain to the Law Society via the legal ombudsman.

Any advise would be gratefully appreciated.

Sparklyfairy

I haven't been in this situation before but I believe you should ring the law society ASAP & explain your situation thoroughly to them...I'm sure Egg will pop in & let you know his thoughts soon. Hth, SF x

eggbox

To repeat what I advised above,

I would send a recorded letter to the NR Solicitor and explain that as there is no legal obligation to pay any CO notified by a Form K Restriction when a sale of a property made; that you will have to hold them responsible for any time and cost of recovering the money from any third party they decide to send your OH's share to.

Stating this will be due to the fact that your OH has not given any permission, which they tried to seek, to pay the monies to any third party and to do so is a breach of their legal obligation to return excess proceeds from the repossesion sale to the legal owners of the equity surplus.

You also add that they need to provide evidence of a legal responsibilty, on their part, if they do decide to pass on this money without your oh's permission; and failure to do so will leave them liable as stated above for your recovery costs.

terryw

eggbox wrote: »

To repeat what I advised above,

I would send a recorded letter to the NR Solicitor and explain that as there is no legal obligation to pay any CO notified by a Form K Restriction when a sale of a property made; that you will have to hold them responsible for any time and cost of recovering the money from any third party they decide to send your OH's share to.

Stating this will be due to the fact that your OH has not given any permission, which they tried to seek, to pay the monies to any third party and to do so is a breach of their legal obligation to return excess proceeds from the repossesion sale to the legal owners of the equity surplus.

You also add that they need to provide evidence of a legal responsibilty, on their part, if they do decide to pass on this money without your oh's permission; and failure to do so will leave them liable as stated above for your recovery costs.

Superb. Post of the month.