Second Charge on a property

ACG

Hi,

I own a property with another person. They had a business which had a debt and a company has placed a second charge on our property, its an energy company who only supply business premises as far as im aware.

My understanding is if the house is sold they get their money which is fine, but what happens if we decide to remortgage (not increasing the mortgage amount just who its with etc), obviously interest rates wont stay this low forever so at some point we are most likely going to have to find a better deal at some point in the next few years.

Cheers

_Andy_

If you change lender the energy company will need to grant a 'deed of postponement' (DOP) for the charge to change from one mortgage company to another.
I would very much doubt they would do so.
If you stick with the existing mortgage company there's not going to be any problems.

Senior_Paper_Monitor

"as far as I am aware" !!! A second charge on a property that you jointly own can only be placed with your agreement demonstrated by a signature !

Leaving that aside - Andy's information is obviously correct

ACG

I have never agreed to a second charge verbally or written and have never even been asked - not that i doubt what your saying but nobody would ever agree to that would they.

Senior_Paper_Monitor

In that case it would be my opinion that any second charge they claim is unsupportable.

How do know about this 'second charge' ? - depending on the answer I will happily come back with my opinion on best action (which will probably be - go to a solicitor).

What is the basis of your relationship with the co-owner (and how amiable is it and do you wish it to be) ?

ACG

Its a relative - there are no problems at all between us and doubt there ever will be.

As for how i know about it, i received a letter at the same time as my relative telling us that a court date had been set. The court date was last week and this is when the second charge had been applied.

Trollfever

Sounds like a charging order has been granted.

Do not ignore court papers.

Senior_Paper_Monitor

Go to a solicitor immediately and get him to challenge the order - My clear opinion is it cannot be placed on a jointly owned property unless both parties agree to it (if I am wrong the solicitor will obviously advise you).

What I would be worried about is I have no idea why you should have been provided the court papers (hearing advice) unless you were in some way already a guarantor (or similar) of some sort for this debt.

You do not want this charge on your property - not only will it make remortgaging difficult (as per Andy's post), there is a danger of this affecting your credit rating (as a financially associated person) and most important of all ... a second charge can force the sale of the property (what would happen in this case is that the mortgage/1st charge would be paid in full, then any remaining funds would be applied to the second charge in full and any remaining funds shared between the owners).

I strongly recommend that you head off to the solicitors now.

ACG

It already went to court. The company won.
As for how i know about the date, i may be wrong but im sure it was in with my letter but im close to the relative, everything gets shared there are no secrets.

Its only for a small amount(ish) £3k - not enough to force a house sale.

If you think it can be disputed i will look into it.

Senior_Paper_Monitor

Yes I think it can and should be disputed - my previous posting expresses my clear opinion:

"Go to a solicitor immediately and get him to challenge the order - My clear opinion is it cannot be placed on a jointly owned property unless both parties agree to it (if I am wrong the solicitor will obviously advise you)."

ACG

I received a letter today to say the charge has been applied, my relative has received one to say they are taking us to court for a forced sale.
this is a nightmare! im going to a solicitor tomorrow.