Land Registry says there's a charge on property, physical deeds show charge struck through

gundo

Currently selling my deceased parents' house and it's hit a glitch. It was supposed to complete last week but I've been informed that the buyer's solicitors spotted a charge on the property according to the Land Registry.

When Mum died (she outlived my Dad by 12 years) I contacted the mortgage lender (since taken over by Santander) as they held the deeds because my Dad had left an outstanding debt of £1 on the mortgage so that the Alliance & Leicester would look after the deeds. Sent Santander the death certificates of my parents and the deeds of the house duly arrived in the post (I'm sole executor and beneficiary).

When I took on solicitors in November last year to sell the house I handed them the deeds. I know that these days the deeds are less important than they were and that the Land Registry entry "trumps" them but I can't understand why the solicitors (mine or the buyer's) didn't spot this problem sooner - I assume Land Registry queries is done fairly early on in the buying process along with Local Authority searches, environmental searches etc. 

My parents bought the house in 1984 and lived there the rest of their lives. The charge is present on the deeds and has been struck through, officially stamped and the alteration dated May 1984 when they bought the house (it was built in 1973) so that's consistent with when they bought the house. Surely in the 37 years since someone would have come forward and said "I'm owed money, pay me" in relation to the charge? To be honest I'm not sure I understand what a charge on a property actually is or what it means in practice.

Anyone else ever experienced a similar thing? My solicitors have sent a copy of the deeds showing the relevant crossed out charge to the Land Registry and the Land Registry have said they are likely to respond to the query in a few weeks time.

It's very frustrating as currently I'm having to pay house insurance, full council tax, gas, water and electric on an empty property. 

AdrianC

gundo said:

Currently selling my deceased parents' house and it's hit a glitch. It was supposed to complete last week but I've been informed that the buyer's solicitors spotted a charge on the property according to the Land Registry.

When Mum died (she outlived my Dad by 12 years) I contacted the mortgage lender (since taken over by Santander) as they held the deeds because my Dad had left an outstanding debt of £1 on the mortgage so that the Alliance & Leicester would look after the deeds. Sent Santander the death certificates of my parents and the deeds of the house duly arrived in the post (I'm sole executor and beneficiary).

When I took on solicitors in November last year to sell the house I handed them the deeds. I know that these days the deeds are less important than they were and that the Land Registry entry "trumps" them but I can't understand why the solicitors (mine or the buyer's) didn't spot this problem sooner - I assume Land Registry queries is done fairly early on in the buying process along with Local Authority searches, environmental searches etc. 

My parents bought the house in 1984 and lived there the rest of their lives. The charge is present on the deeds and has been struck through, officially stamped and the alteration dated May 1984 when they bought the house (it was built in 1973) so that's consistent with when they bought the house. Surely in the 37 years since someone would have come forward and said "I'm owed money, pay me" in relation to the charge? 

So the property IS registered?

When was it registered, by whom?
Once it was registered, the deeds held by A&L were historical-interest-only - but it couldn't have been easily registered without them to hand.

It sounds like the registration correctly noted the A&L/Santander charge, then - when the debt was repaid and the charge should have been removed - A&L/Santander simply removed it from the paper deeds not knowing about the LR registration.

To be honest I'm not sure I understand what a charge on a property actually is or what it means in practice.

It's the method by which a creditor's interest in the property as security for a debt is noted. The property cannot be transferred without that charge being released - which is the creditor saying "Nope, not interested any more".

Without it, loans secured against property would be worthless, because when the repo man comes knocking, the creditor simply shrugs and says "Sorry, too late, this house is now owned by my best mate from down the pub, who I pay no rent to..."

Section62

gundo said:

My parents bought the house in 1984 and lived there the rest of their lives. The charge is present on the deeds and has been struck through, officially stamped and the alteration dated May 1984 when they bought the house (it was built in 1973) so that's consistent with when they bought the house. Surely in the 37 years since someone would have come forward and said "I'm owed money, pay me" in relation to the charge?

 

So the charge you are concerned about was in place before your parents purchased?

Who was person or organisation the charge was in favour of? I.e. does it relate to a previous mortgage or loan, or is it something else.

Land_Registry

The debt was a mortgage but reduced to a £1 so the lender would hang on to and keep the deed’s safe. Common thing to do historically and nobody would come forward to say monies are owed as the arrangement had been agreed 
The issue is then getting the charge discharged. I don’t follow the crossed through and stamped unless you mean the lender did that as part of the arrangement? 

The charge is it seems still on the register so we’d need an application to remove the charge plus a discharge. This is usually done electronically by most major lenders. 

What’s the title number involved as it doesn’t read like a routine matter? 

gundo

Land_Registry said:

The debt was a mortgage but reduced to a £1 so the lender would hang on to and keep the deed’s safe. Common thing to do historically and nobody would come forward to say monies are owed as the arrangement had been agreed 
The issue is then getting the charge discharged. I don’t follow the crossed through and stamped unless you mean the lender did that as part of the arrangement? 

The charge is it seems still on the register so we’d need an application to remove the charge plus a discharge. This is usually done electronically by most major lenders. 

What’s the title number involved as it doesn’t read like a routine matter? 

I downloaded the relevant docs from the LR and here's what I found:
Under the Charges Register section there's two entries. The first one is a restrictive covenant saying that they have to maintain fences and not carry out any trade or business. The second one is dated 1982 and is a Notice of Deposit of Land Certificate with Lloyds Bank Ltd, Swansea. I'm guessing the second one is when the occupiers had a mortgage on the property with the Lloyds Bank. Which predates the purchase of the property by my parents by more than 2 years. My parents never had a mortgage or accounts with Lloyds so it does appear as if the previous owners' mortgage lenders interest in the property wasn't removed though it was struck out on the deeds. Title number is HP199083

v_sujeevan

gundo said:

Land_Registry said:

The debt was a mortgage but reduced to a £1 so the lender would hang on to and keep the deed’s safe. Common thing to do historically and nobody would come forward to say monies are owed as the arrangement had been agreed 
The issue is then getting the charge discharged. I don’t follow the crossed through and stamped unless you mean the lender did that as part of the arrangement? 

The charge is it seems still on the register so we’d need an application to remove the charge plus a discharge. This is usually done electronically by most major lenders. 

What’s the title number involved as it doesn’t read like a routine matter? 

I downloaded the relevant docs from the LR and here's what I found:
Under the Charges Register section there's two entries. The first one is a restrictive covenant saying that they have to maintain fences and not carry out any trade or business. The second one is dated 1982 and is a Notice of Deposit of Land Certificate with Lloyds Bank Ltd, Swansea. I'm guessing the second one is when the occupiers had a mortgage on the property with the Lloyds Bank. Which predates the purchase of the property by my parents by more than 2 years. My parents never had a mortgage or accounts with Lloyds so it does appear as if the previous owners' mortgage lenders interest in the property wasn't removed though it was struck out on the deeds. Title number is HP199083

Hello,

Did you manage to resolve this? The property we are purchasing has the same charge called "Notice of Deposit of Land Certificate with Lloyds Bank........". If you have resolved it, what is the exact procedure to remove this as sellers seems to struggle to remove this, but my solicitor insist them to remove prior to completion

Land_Registry

v_sujeevan said:

gundo said:

Land_Registry said:

The debt was a mortgage but reduced to a £1 so the lender would hang on to and keep the deed’s safe. Common thing to do historically and nobody would come forward to say monies are owed as the arrangement had been agreed 
The issue is then getting the charge discharged. I don’t follow the crossed through and stamped unless you mean the lender did that as part of the arrangement? 

The charge is it seems still on the register so we’d need an application to remove the charge plus a discharge. This is usually done electronically by most major lenders. 

What’s the title number involved as it doesn’t read like a routine matter? 

I downloaded the relevant docs from the LR and here's what I found:
Under the Charges Register section there's two entries. The first one is a restrictive covenant saying that they have to maintain fences and not carry out any trade or business. The second one is dated 1982 and is a Notice of Deposit of Land Certificate with Lloyds Bank Ltd, Swansea. I'm guessing the second one is when the occupiers had a mortgage on the property with the Lloyds Bank. Which predates the purchase of the property by my parents by more than 2 years. My parents never had a mortgage or accounts with Lloyds so it does appear as if the previous owners' mortgage lenders interest in the property wasn't removed though it was struck out on the deeds. Title number is HP199083

Hello,

Did you manage to resolve this? The property we are purchasing has the same charge called "Notice of Deposit of Land Certificate with Lloyds Bank........". If you have resolved it, what is the exact procedure to remove this as sellers seems to struggle to remove this, but my solicitor insist them to remove prior to completion

A NofD is is an old form of security used back in the day that there were Land Certificates (deeds issued by HMLR) 
To withdraw one we’d need the lender to apply using either a form WCT or AP1 so you’d need Lloyds to do that
To cancel it yourselves you’d need form CN1 plus supporting evidence that it’s been paid off - that would normally be a form DS1 if paying off now or could be ‘old’ evidence such as the original form used to register it having been signed off on by Lloyds at the time 
So simple removal process but all about proof of redemption/discharge