Difference between Charing Order and Restriction?

wmat983

As title states just wondering what is the difference between charging order and a restriction attached to a property? Also is it true they expire after 12 years?

sourcrates

A charging order secures a debt you have with a creditor against your property. This means if you sell or remortgage your home before the debt is cleared the charging order will be paid off from the proceeds.

A restriction is an entry on the registered title deeds to a property which prevents a sale or transfer of an interest in a property, without the creditor first consenting.

Section 20 of the Limitation Act 1980 prevents the commencement of any action to recover money secured by a mortgage or other charge on a property after 12 years have elapsed following the date on which the right to receive the money accrued.

wmat983

sourcrates said:

A charging order secures a debt you have with a creditor against your property. This means if you sell or remortgage your home before the debt is cleared the charging order will be paid off from the proceeds.

A restriction is an entry on the registered title deeds to a property which prevents a sale or transfer of an interest in a property, without the creditor first consenting.

Section 20 of the Limitation Act 1980 prevents the commencement of any action to recover money secured by a mortgage or other charge on a property after 12 years have elapsed following the date on which the right to receive the money accrued.

Thanks for your reply. 

So if you had a charging order would you be able to secure a new deal with your lender if say your 5 year deal ran out and went onto a SVR?

So a restriction you could remortgage but you couldn't sell property without creditor first consenting? Well, within 12 years anyway.

sourcrates

CO only comes into effect if house is sold.

Kay_Bee_2

Can I please ask if  this clause applies in England and Wales, and if it so does it mean that you can apply to have the charging order struck off after 12 years, want happens to the order?  if the creditor has not made any attempt to recover the money after 12 years.  For an example can a restriction  registered with the land registry be remove. 
Any information shared  would be appreicated ? 

sourcrates

Yes the limitation period in England and Wales on CO`s is 12 years.

Edit -

It appears a charging order can be enforced more than 12 years after it was made. This was confirmed by the Court of Appeal in Yorkshire Bank Finance Ltd v Mulhall. Mulhall from 2008 apparently.

Gulliablenskint

Ive been researching charging orders and the guidance I found was that they are not covered by the limitation period Charging orders. These appear not only to be immune from section 24(1) of the 1980 act but also from section 20(1) of the same act, which places a 12-year limitation on enforcement in relation to a charge on land, running from the date on which the right to receive the money under the charge accrued. 

Kay_Bee_2

Thank you, I did see that after my post, these charging orders seem to supersede all LAWS.

fatbelly

You've had a good explanation on
https://forums.moneysavingexpert.com/discussion/comment/77866028#Comment_77866028