Charge orders

Dakta

I wasn't sure where to put this, in mortgage free wannabee (does technically apply), debt free wannabe (does technically apply though not directly to me) or here - this seemed a more informational board for mortgage stuff so here goes.

Situation is a bit complex but my dad passed away suddenly a few years ago, he was a hard working man but struggled to make ends meet,  at the time I was the only sibling living at home and to keep it really breif I've thrown myself into work, built up a career and I've taken on the mortgage payments, other stuff etc, we've pulled ourselves into a stable place. House is still in mothers name but we're sorting wills, I've got life insurance (there's a lesson there)  and idea was to possibly put it in my name soon or so was the plan.

I randomly did a land registry check and found a charge order on the property from a company I recognise as a land lord from when my dad run his business, whilst I don't know any details it looks like he ran up what must have been a significant debt whilst trying to save his business and whilst it did turnaround he died before it fully recovered.

I've not had any contact with this company, but I am (selfishly?) concerned now about my status, I've no idea how big this debt is, and I've just thrown six years of graft at getting the house (me and remaining parent) onto what I thought was stable ground. Now it might not be so.

There's been no effort to make us sell the property, but as I understand it it could happen and I have no information on the debt having existed up to press or the amount. I appreciate this company is likely owed the money but converesely I'm suddenly in a changed position where i might be funding a house (which doesnt have much value) which actually is significantly diluted from what i thought.

Any ideas on next steps? TIA

fatbelly

Is this actually a restriction? It would still appear in the charges section.

That should be the case if this was a ccj for a debt in your Dad's name that was secured by a charging order on a house jointly owned with your mum

If so then there is a dedicated thread where the Land registry Rep answers questions on this and it's here

https://forums.moneysavingexpert.com/discussion/1839539/charging-order-the-myth#latest

housebuyer143

Dakta said:

I wasn't sure where to put this, in mortgage free wannabee (does technically apply), debt free wannabe (does technically apply though not directly to me) or here - this seemed a more informational board for mortgage stuff so here goes.

Situation is a bit complex but my dad passed away suddenly a few years ago, he was a hard working man but struggled to make ends meet,  at the time I was the only sibling living at home and to keep it really breif I've thrown myself into work, built up a career and I've taken on the mortgage payments, other stuff etc, we've pulled ourselves into a stable place. House is still in mothers name but we're sorting wills, I've got life insurance (there's a lesson there)  and idea was to possibly put it in my name soon or so was the plan.

I randomly did a land registry check and found a charge order on the property from a company I recognise as a land lord from when my dad run his business, whilst I don't know any details it looks like he ran up what must have been a significant debt whilst trying to save his business and whilst it did turnaround he died before it fully recovered.

I've not had any contact with this company, but I am (selfishly?) concerned now about my status, I've no idea how big this debt is, and I've just thrown six years of graft at getting the house (me and remaining parent) onto what I thought was stable ground. Now it might not be so.

There's been no effort to make us sell the property, but as I understand it it could happen and I have no information on the debt having existed up to press or the amount. I appreciate this company is likely owed the money but converesely I'm suddenly in a changed position where i might be funding a house (which doesnt have much value) which actually is significantly diluted from what i thought.

Any ideas on next steps? TIA

How does it read in the charges register? It might not actually be something that needs paying. 
Please post full wording here.

Generally speaking, I do not believe you can get charging orders on a jointly owned property, so it's probably a restriction to notify them of the sale. You do not need to pay it though. Once we have the wording we can advise further.

Dakta

You are correct, I paid the £3 (how much? haha) and this is the wording so it looks like you're both correct:

"RESTRICTION: No disposition of the registered estate, other than a disposition by the proprietor of any registered charge registered before the entry of this restriction, is to be registered without a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to xxyyzzz at 112233, being the person with the benefit of an interim charging order on the beneficial interest of aabbcc made by the a random County Court on sometime"


Now that's a releif isn't it? Am I right to interpret it as such that they (the landlord) will be notified in the event of a sale or ownership change in the future but won't actually be able to do anything?

housebuyer143

Dakta said:

You are correct, I paid the £3 (how much? haha) and this is the wording so it looks like you're both correct:

"RESTRICTION: No disposition of the registered estate, other than a disposition by the proprietor of any registered charge registered before the entry of this restriction, is to be registered without a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to xxyyzzz at 112233, being the person with the benefit of an interim charging order on the beneficial interest of aabbcc made by the a random County Court on sometime"


Now that's a releif isn't it? Am I right to interpret it as such that they (the landlord) will be notified in the event of a sale or ownership change in the future but won't actually be able to do anything?

Yes it is. This does not need to be paid at all. It will only require the creditor to be notified of the sale so they know the debtor now has money. 
You will need to ensure you find a lawyer though during the sale who fully understand form K restrictions before you start as it's unusual and many don't understand and insist they are paid. 
Once you find one, you should then also ensure the buyers solicitor also is told this upfront and ensure that it is explained to them about form K as you have the same problems otherwise with them insisting that they are paid.

I recently bought a house with 3 form K restrictions and know more than I would like now lol. We had a hell of a time though because it was sprung on us at the final hour that they would not be paid and completion almost fell apart.

That forum linked above I found very useful. 

fatbelly

It does mean that you don't have to worry about this.

The wording of a Form K restriction is very clear and understandable. Solicitor firms have written articles on how powerless they are, and a google search will find them.

But when it comes to conveyancing solicitors, I would say that 99% read the restriction as requiring payment.

The thread I linked to earlier has become the main focus for anyone needing support to deal with them, which is why, after many years, it was made a sticky on the dfw forum

user1977

fatbelly said:

It does mean that you don't have to worry about this.

Hmm. Perhaps in relation to what force the charge itself has, but the OP (or whoever the executor(s) were) ought to be worrying about whether there were in fact debts due by the estate which they have failed to pick up on. Though that's probably more for the deaths/probate board.

MWT

user1977 said:

fatbelly said:

It does mean that you don't have to worry about this.

Hmm. Perhaps in relation to what force the charge itself has, but the OP (or whoever the executor(s) were) ought to be worrying about whether there were in fact debts due by the estate which they have failed to pick up on. Though that's probably more for the deaths/probate board.

That was my first thought, there is a strong risk that they may have incurred a personal liability by failing to perform a basic check.

Dakta

That will need to be looked into perhaps, I wasn't an executor and I don't know how things were run but the general theme was that there wasn't really anything