Charging Order? The myth

miekaj05

Hi again,

Just a quick update. I have completed a disassociation form online with experian. Hopefully they will get back to me in a couple of weeks and let me know if it can go ahead.
Can't thank you enough for the advice. Means I dont have to worry so much now.

Land_Registry

eggbox wrote: »

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!

The issues around Charging Orders can, as you clearly already appreciate, be very complex. It might therefore be helpful to make the following observations from a purely Land Registry perspective, re this most recent post

As eggbox rightly points out the beneficial and legal interests are two separate matters and where a CO arises the beneficiary has to consider how best to protect their interest – where it is against one of joint proprietors this is most likely to be by registering a form K restriction. See section 8.1 of the PG

The wording of a form K restriction is quite clear as to what is required from a registration perspective IF the restriction catches the disposition as lodged, namely a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to the person with the benefit of the charging order (as named in the restriction itself)

We are not able to supply guidance on the legal implications behind the restriction or indeed what impact it may or may not have on a prospective purchaser or any of the parties involved. To do so would be to provide legal advice and whilst we can explain the procedural implications e.g. a restriction may be cancelled (form RX3) or withdrawn (form RX4) or it can fall automatically, we cannot give any more detail as the situation is a hypothetical one until such time as an actual application is submitted.

eggbox has also explained the most likely outcome regarding the automatic cancellation of a form K restriction if the application lodged is to register a transfer by two or more proprietors to a third party for value AND the required certificate has been provided. In other cases, unless it is absolutely clear that, as a result of the registration being completed, the charging order no longer affects any beneficial interest in the estate, then the restriction can be left on the register and hence a need for an RX3 or RX4 to then be lodged if the restriction is to be removed - it may have been this scenario to which we refererd when rung?

Land Registry are not in a position to advise/tell a third party how they should view or respond to the existence of a form K restriction or indeed whether they pose ‘a problem’ for them. However I do appreciate that there will be occasions where a customer may have entered into correspondence with Land Registry regarding a specific title/application and more specific guidance has then been supplied – references to a lawyer at Stevenage supports this although I should stress that there is no longer an office in Stevenage and that Land Registry lawyers are also required to operate within the limits of our Advisory Policy.

I would also add that our Customer Support Centre staff are experienced caseworkers and will do their best to respond to the questions asked of them within the limits of that same Advisory Policy. Whilst we may not get everything right, we are after all, all human.

I understand that the term ‘Phone Jockey’ is often used to describe someone employed to answer calls – that is not the case with Land Registry where the Customer Support Centre has existed since circa 2008 and staffed with our caseworkers to deal with general telephone enquiries.

eggbox

LRR

Thank you for your comments, and whilst you have (understandably) had to say they are observations rather than advice; there is nothing in your comments that I can see that contradicts what this thread is stating.

Hopefully, stubborn and ill informed Solicitors will read those comments and understand they have options in protecting their clients best interests from now on.

Land_Registry

eggbox wrote: »

LRR

Thank you for your comments, and whilst you have (understandably) had to say they are observations rather than advice; there is nothing in your comments that I can see that contradicts what this thread is stating.

That is quite correct eggbox although I must stress that I have not looked back through every single post but merely the most recent.

Land Registry's primary role in such matters is to record such interests as applied for and to provide that information and any procedural guidance where appropriate. The legal title, namely the land register, is one part of the equation and those affected by such issues (on both sides) should always seek legal advice on how to proceed.

As you clearly appreciate though legal advice can differ in much the same way as Land Registry or forum advice can as well.

miekaj05

Hi eggbox,

I tried to get a disassociation but experian have refused because the mortgage and secure loan are in joint names. Taking everything into account and as much as it pains me I think the only way forward now is to sell before anymore debts arer put on the house. I will ensure that any solicitor or conveyancer knows about the restrictions so that creditors get notified of a sale. Hopefully I will not have the issues that Gimbal has had to deal with.

Thanks for your advice and I will keep you up to date.



If anyone has any other ideas then I am very happy to have a look.

inseveralpickles

Hi All,

Hoping for some clear advice and help, I have sold my property due to being unable to afford the mortgage any longer and to avoid repossession, my two restrictions have raised their heads just as we were about to exchange (although my solicitor has been aware of them from the start as I purposely chose someone who knew about restrictions). I jointly own the property with my partner but the restrictions are just that (not charges ) as I understand, because they were solely my debts not my partners who co-owns the property.

Buyers solicitors are now advising them to not proceed with sale due to restrictions, estate agents contacted me today and my solicitor, estate agent and I have emailed them the necessary quotes etc from Land Registry along with the Practical Guide 19 from Land Registry website to show their solicitor.

My question is who the hell do I proceed now, I think the sale is going to fall through because of these restrictions, my solicitor contacted them for settlement and they are quoting full payment which isn't possible with the equity left so we are stuck. I am waiting to hear back from the estate agents as to whats going to happen but doesn't look good, I am so stressed with it all, it seems I have no option but to hand my keys back to the mortgage lender for voluntary repossession as even though the restrictions say it doesn't affect selling your property it clearly does which leaves me with no other options.

Please please any words of wisdom?

inseveralpickles

Sorry should have mentioned that they are both 'K' restrictions

eggbox

inseveralpickles

Your creditors have no powers, legal or otherwise, to prevent you selling your property as a Form K Restriction holds no power of prevention. It merely acts as a "flag" to the Restrictioner that a sale is happening and there may be funds they can try to claim. And as the Land Registry have confirmed; if a sale proceeds to a third party for value then they are not prevented from registering the new owners details and the Restrictions will be automatically removed as they will be over-reached.

Knowing the above, however, is the easy part. The hard part is getting Solicitors to understand this (on both sides) and also to take the time to understand that there is no legal obligation to pay any Restrictioner upon the sale of a property.

You will see a post above from a Land Registry Representative who confirms this and my advice would be to start there with your Solicitors.

inseveralpickles

Thanks eggbox, I have forwarded on the Land Registry info to my solicitor, I have also tonight contacted the restrictions who are considering my proposals for settlement in order to remove the restrictions, this is in the hope that it will help things along. I am not trying to avoid payment just to sell my property and pay what I can from my share not my partners but it seems that although we are told restrictions don't prevent a sale its a very different story in the real world!!

I shall keep everyone updated with how things proceed.

eggbox

inseveralpickles

Its important to keep in mind that Restrictions only prevent a sale through Solicitors attitude towards them; not because they legally prevent a sale. If you read Gimbals post #791 you will see a Restrictoner (Shoesmiths) confirm they have no power to block a sale.

Its also important to understand that your Restrictioners have only been given a Charging Order against your financial interest in the house not against the land (property) itself. If that financial interest, therefore, doesn't cover there debts then that's just tough on them as the Restrictions will fall away upon a sale (provided they are notified of the sale) anyway. The Land Registry post #809 confirms this.

Its vital you explain to your Solicitor these facts and to also explain she is being paid to represent your best interests.