Charging Order? The myth

Gimbal

Am I right in thinking that:

4.7.4 Restrictions cancelled without application

We may cancel a restriction without any application being made if it is clear that the restriction has become superfluous (paragraph 5(d) of Schedule 4, LRA 2002). The following are examples of where we might cancel a restriction automatically.

• Where the restriction was entered to protect an interest that has since been overreached by the payment of capital money arising on a registrable disposition to the proprietors who have given a valid receipt (for example Form A).

Means that the LR will cancel the restriction automatically once it has been overrached by the paying off of the mortgage (selling the property) and that the 'registerable disposition' is the mortgage and the proprietors who give the receipt are the new owners solicitors?

Many thanks in advance as I have to send this off to the solicitor asap.

eggbox

Gimbal wrote: »

Am I right in thinking that:

4.7.4 Restrictions cancelled without application

We may cancel a restriction without any application being made if it is clear that the restriction has become superfluous (paragraph 5(d) of Schedule 4, LRA 2002). The following are examples of where we might cancel a restriction automatically.

• Where the restriction was entered to protect an interest that has since been overreached by the payment of capital money arising on a registrable disposition to the proprietors who have given a valid receipt (for example Form A).

Means that the LR will cancel the restriction automatically once it has been overrached by the paying off of the mortgage (selling the property) and that the 'registerable disposition' is the mortgage and the proprietors who give the receipt are the new owners solicitors?

Many thanks in advance as I have to send this off to the solicitor asap.

Yes you are correct. There is no legal obligation to pay any CO (upon the sale of a property) where it can only be registered as a Restriction. If your Solicitor queries then ask her to point out to you where there is a legal obligation to do so?

The Land Registry will confirm to her this is the case and also that the the Form K Restriction only has the power to"flag" the restrictioner that there "may" be funds now available upon which they can claim.

Gimbal

I have had the following email from Persimmons solicitor forwarded to me from my solicotor:

Despite reading your client’s email I am not prepared to rely on his understanding that the restriction will be null and void and that the restriction holder can chase the debtor using other means. I realise the restriction wording states that written notice of the disposition only needs to be given to Shoosmiths and my registration would be completed but the restriction would still remain on the title and ultimately the debt could end up being Persimmon’s problem.

Accordingly in respect of the restrictions at 6 and 7 of the Proprietorship Register I will require your undertaking on exchange that you hold Form RX4’s signed on behalf of National Westminster Bank plc and Northern Rock so that the restrictions will not follow onto the title when I register Persimmon’s interest and that they will be forwarded to me on completion.

Neither of them, mine nor the buyers (persimmons) solicitor want to actually find out for themselves.

They want the restrictions lifted before anything else happens.
This isnt going to happen.
Why on earth would the creditors remove the charges when they dont have to?
they wouldnt.
The whole thing is utterly ridiculous.

My solicitor spoke to one of the phone jockeys at the land registry who said that a RX4 is needed to lift the charges.

Which is right, if i wanted the charges removed. But I don't.

I need to convince them that the charges dont need to be lifted and that they will be removed by the LR on completion.

I've quoted the LR text that explains how this happens but apparently this isnt good enough.

I'm not letting this go, but I need advice on the best way to move forward.

Changing solicitors is no use as persimmon wont change who they use.
The only way forward that i can see would be to knock the part exchange on the head and sell my property with a solicitor that actually understands the law in this case.
This would incur massive extra costs though and I cant really afford to go down this route.

Please help.
Any suggestions would be welcomed at this point.

I have an appointment to see my solicitor in the morning so need to have a plan of action before then.

Thanks

eggbox

miekaj05

The Land Registry wouldn't allow an application for a change of the details or remove your Ex's Restriction if it was by way of a transfer of Equity. Your Ex either needs to pay them off (which I understand isn't going to happen) or you need to sell you property whereby they will be removed by the LR as being over reached (but as you will see by Gimbals case, its not plain sailing!

My advice would be to get it legally ratified that your Ex has given up any financial interest in the property. That prevents any comeback in future years as he sounds a sweetheart! You can then stay in your home for as long as you wish knowing there isn't anything your Ex's creditors can do as its your main residence. And whilst I understand why you want your Ex off the deeds, isn't something you should worry over.

The situation is not ideal, but it does at least give you options which you can use when the time is right for you and you family.

Gimbal

eggbox wrote: »

Yes you are correct. There is no legal obligation to pay any CO (upon the sale of a property) where it can only be registered as a Restriction. If your Solicitor queries then ask her to point out to you where there is a legal obligation to do so?

The Land Registry will confirm to her this is the case and also that the the Form K Restriction only has the power to"flag" the restrictioner that there "may" be funds now available upon which they can claim.

Thanks for the response.
I will ask her when i see her in the morning about the legal obligation.
As i said in my other post she spoke to a phone jockey at the LR and no the solicitor as I had recommended. Thus the incorrect information.

If I can convince both sets of solicitors that the charges will be removed on completion then I'm home free. But even the text from the LR doesnt seem to be good enough.

I feel like I'm going round and round in circles and have reached a stalemate.

eggbox

Gimbal

You need to get them to understand there are no Charging Orders registered against the property and that the Restrictions are only notifications of CO's against your financial interest in the property.

Your Solicitor can also contact the LR to gain the assurances of what happens when your property is sold. She can then give her assurance to Persimmon that the Restrictions will be removed upon completion which will be legally binding. You can also explain to Persimmon that its not legally possible for the Restrictions to become their problem which the LR will also confirm.

And as I said, you need to speak to a Solicitor at the LR not the "Phone Jockey". (but she could also ask the PJ what happens to the Restrictions when the property is sold and take her answer from there)

You are unfortunately suffering from the "system" whereby the creditors have had an easy ride from Solicitors who have been doing their job for them. But please keep at it!

miekaj05

eggbox wrote: »

miekaj05

The Land Registry wouldn't allow an application for a change of the details or remove your Ex's Restriction if it was by way of a transfer of Equity. Your Ex either needs to pay them off (which I understand isn't going to happen) or you need to sell you property whereby they will be removed by the LR as being over reached (but as you will see by Gimbals case, its not plain sailing!

My advice would be to get it legally ratified that your Ex has given up any financial interest in the property. That prevents any comeback in future years as he sounds a sweetheart! You can then stay in your home for as long as you wish knowing there isn't anything your Ex's creditors can do as its your main residence. And whilst I understand why you want your Ex off the deeds, isn't something you should worry over.

The situation is not ideal, but it does at least give you options which you can use when the time is right for you and you family.

Many thanks eggbox and I appreciate exactly what you have said. I feel a little less anxious now knowing what I can and cannot do.

Just two more questions if that's ok. If the mortgage remains in joint names and I get the ratification can any other creditors try and put charges on in the future? Also having the mortgage remain in joint names - will this affect my credit because I am still associtaed with him? At the moment I have a fair rating. I know I can ask Experian to look at a disassociation and it is something I will follow up on with them but dont want to alert any creditors to the fact that I may sell or he has no financial interest and they then go back to court and try and stop a sale or any agreement I reach with my ex.

Sorry to have op ask so many questions but I want to ensure that I do the right thing.

Thank you.

eggbox

Miekaj05

Its your Ex's name on the deeds that allows CO's to be gained not the fact you have joint mortgages. Other creditors can unfortunately still obtain CO's on his BI in the property but that's not really a problem given the circumstances (as it won't make any difference to you)

What you could ask for (but I'm not sure if its possible?) is a reduction in the ownership split given you are paying the mortgage. This would at least limit his BI and put more on your side.

But you must disassociate yourself with your ex with the CRA's or his record shows up on your searches. Creditors cannot stop you selling with a Restriction, either, and any agreement regarding a financial settlement would be non of their business. So don't worry on that score.

sampete

Is it possible for any member, who has had success with this issue, to provide Gimbal with their Solicitor details. They could confirm that it is legal and that they have a "duty of care" to act in Gimbals best interests.
Dont give up Gimbal, we are right behind you. Good luck!

eggbox

Nice thought, Sampete, and I would certainly like to see the "Duty of Care" issue tested a bit more given Solicitors are freely handing over thousands of pounds of their own clients money from sales when there is no obligation placed upon them to do so?