Charging Order? The myth

Land_Registry

eggbox wrote: »

LRR

Ok, I will have a look through the case law, thank you

Eggbox - I took a look at the case law quoted in your earlier post and to my mind that relates to other people's interests in a property i.e. through possible occupation. Not too sure how it is linked to the number of purchasers involved?
If you wanted to share the forum link where the posts have been made I can take a look and try to offer some further insight?

eggbox

LRR

Its ok, he has since retracted his statement realising he was getting Purchaser & Seller mixed up!

Thanks for looking into it, though.

eggbox

For anyone wishing to sign it, there is a petition HERE trying to get the Government to raise the Charging Order limit to £25,000 as originally intended.

kobylka

Dear Land registry Representative,

I wonder if you could help.
My husband got a CCJ against him, and he creditor got a charging order granted for our jointly owned home. This now appears as a Form N restriction:
“RESTRICTION: No disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent signed by [creditor]"

I read LR Practice Guide 19, and Section 8.8 says:
"So, if a charge is not substantively registered and an application is made to note the charge instead, a separate application must be made in form RX1 for an appropriate form of restriction; this will generally be for a restriction in standard Form N. The consent of the borrowers to the form of restriction applied for should accompany the application."
Does the last sentence mean that the consent of my husband was required for the Form N to be registered? Obviously, we were not asked for any consent.

Land_Registry

Kobylka - section 8.8. of PG19 relates to guidance as to Protection of charges in the register when a restriction prevents registration , namely a registered charge (mortgage) already exists and they have not consented to a further charge by the owner. A charge is different from a charging order in this context and as such I do not think this section applies here.

IF a form N restriction has been entered it is possible that the court may have issued a separate order directing Land Registry to register the restriction?

If you are unsure as to the circumstances behind how the restriction has been registered then you should refer to the notice(s) (if any) received when the restriction was applied for as they should provide the relevant details.

Alternatively you can Contact Us (I would suggest by email) and provide the property address and title number and enquire how and why the restriction has been registered.

brightonian

I have been on this thread previously and I am now confused, as my solicitor is telling me the opposite of what I believe to be true. I have also tried the Land Registry, and they have told me "Read Practice Guide 19" and "Here is a link to RX3".

Situation is:

• Joint Mortgage with my ex-wife
• Both named on the register
• Form K restriction in favour of Natwest in my name only
• House being sold to a couple "for value"
• Natwest's solicitors have been "informed of disposition" and have acknowledged this

I was of the belief that the restriction would be "overreached" when the "applicant for registration" (new owners?) sends an RX3 with certified evidence that NWB had been informed (presumably a letter from my solicitor stating that NWB had been informed of the disposition).

Now we are close to exchange of contracts and I have been told by my solicitor that the sale by my ex-wife and I will not overreach the restriction and that the Land Registry have said "only NW through their solicitors can remove the restriction".

This is extremely alarming for me! I also can't understand why the LR would say "only NW through their solicitors can remove" - the LR told me they couldn't advise on individual cases and only on procedure. Plus, surely I could apply for it to be removed if the debt had been paid and NWB didn't remove it (if I provided evidence) or a court could apply for it to be removed, if they so ordered?

I feel I am now in a position where she is basically saying "completion will only happen if I pay the money to Natwest".

I thought this was an open and shut case of "Form K restriction in one of two proprietors names, restriction overreached and removed upon re-registration when sold for value".

eggbox

Your Solicitor is not giving you the full facts on this and it may, possibly, be he isn't up to speed on the rules.

It's correct that only NatWest can remove the Restriction BUT, that is if you want it removed before the house is sold. If the house is sold without NatWest removing the Restriction, however, the Restriction has to be removed because it has become overreached as the interests of the new owner take priority under Land Registry rules. (Land Registry Rep should confirm this)

So there is no "legal" responsibility for you to pay off the CO from the proceeds of the sale. Unfortunately, you will get resistance from your Solicitor as they don't like being corrected.

So you need to get your Solicitor to ask the Land Registry what will happen to the Restriction once the house is sold to a third party for value. Then he will get the response you require to allow him to give the assurance that is required for the sale to proceed.

brightonian

Thanks Eggbox.

The problem I had with the LR is that they told me to look at Practice Guide 19 and RX3, plus:

Under our advisory policy, we can provide factual information and procedural advice to customers about how the land registration system works, but we cannot give legal advice. In view of the complexities of the law in relation to this matter you may wish to seek legal advice from a solicitor or other legal advisor.

The problem seems that neither I nor my solicitor can get the LR to say "upon registration by the new owner/s of a property in the name of two or more people, a form K restriction in the name of one of the former owners will automatically be cancelled, where evidence has been provided that the restriction has been complied with, ie the beneficiary of the restriction has been given notice of disposition"

What would happen if I wrote to NWB's solicitors saying "As required by the Restriction dated xxxxxx on the property xxxxx I hereby give you notice of the sale of my interest in the property for value, please can you reply by return to acknowledge both receipt of this notice and that this is the only requirement of that restriction" and then sent an RX3 plus their reply to the LR? Would the restriction be cancelled, on the basis that it was no longer required as they had been notified and therefore its purpose had been served (ie that NWB are then aware that I am/will be in receipt of funds, should they wish to send in the heavies)?

eggbox

brightonian

Firstly, I think you have to accept NatWest aren't going to "voluntarily" remove their Restriction - simply because it's not in their interests to do so. So I would forget any dealings with them as it is your buyers Solicitor that you need to concentrate on.

I do have a little sympathy regarding your comments about the Land Registry but the key (I found) is in what way questions are put to them (as I suggested in the previous post.)

However, Land Registry Rep was helpful enough to point posters on this board to Practice Guide 76 HERE which Section 5, Para 3 should give your Solicitor the verification you require him to understand.

Land_Registry

I am sorry if you had difficulties with regards the guidance provided by us.

There are two main issues for Land Registry associated with the subject of charging orders, namely their complexity for all involved and the fact that a lot of the issues which arise are 'off the register' i.e. not matters on which we can advise as you are already aware from our Advisory Policy in each PG and the conversation/correspondence you have had with us.

From a general enquiry perspective our advice should largely start and end with our existing guides, namely PG19 and PG75 as already mentioned.

If the question 'How do I remove a form K restriction?' is asked then PG19 is the referral point as removing is the same as cancelling (form RX3 by someone other than the beneficiary, for example You) or withdrawing (RX4 by the beneficiary, Nat West in this case). ‘I remove’ is different for example from ‘will it be overreached and automatically cancelled?’

However a restriction that protects an interest under a trust of land (form K is one of these) and the interests under the trust has been overreached because there has been a transfer for money by two or more proprietors to a third party, will usually be automatically cancelled as you suggest.

PG 76 refers but only briefly, as the guide is not dealing with the removal of entries which protect Charging Orders but is dealing with how to protect such interests on the register. Section 4.7.4 of PG19 3rd bullet point also refers and this is the go-to-guide with regards removal of protected interests from the register.

We can only say 'usually' as our Advisory Policy clicks in and we cannot say categorically what will happen until an application is actually submitted, considered and registered - this can leave applicants in a difficult position although those difficulties should be considerably less if they read and understand the guidance provided alongside an understanding of how and when such interests are overreached.

This thread contains useful examles of how posters have understood the processes nvolved but ultimately it is for the conveyancers/solicitors involved to understand the specific nuances involved for both their respective sellers and buyers