Charging order/ restriction on property/ deceased

jwalrus9

Hello,

There is a Final Charging Order made by the court on my late father's and surviving mother's property. They were joint owners, now it is solely owned by my mother since my father passed away. We have notified the land registry of this, sent them certified death certificate. The charging order was made against my father, over 15 years ago, he has since passed away. My father was unaware this charging order was put against the home until the Land Registry wrote to him saying there is a restriction on the property - letter B136(CO). My father disputed this with Land Registry back then, and the land registry replied that they have no power to set aside an order of the court.

Interestingly, in this B136 (CO) letter from the land registry it says - "Where the court has made a charging order the person with the benefit of it is entitled to protect that interest with an entry in the register. If the court order is made against a person who owns the property with you and not you personally, then the above still applies. The court order only affects the interest in the property of that person but the applicant may still make this application."

So my question is - does this restriction/charging order still apply now my father has passed away as the cahtging order was against him, not mum? And of so is it a case of completing an RX3 to get the restriction removed OR do I need to apply to the court that put the charging order against the property to have it removed?

We are not in contact with the family member who applied to put the charging order on the house, no contact details, and we do not know the circumstances around it apart from that they claim they were owed money from my father.

If someone from the Land Registry could advise that would be appreciated.

Thanks

silvercar

Have a read of this thread:

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

Keep_pedalling

You can’t get the charging order removed without the approval of the creditor, Debts don’t die with the death of the debtor where there are assets in the estate to cover them. 

jwalrus9

Hello @Keep_pedalling, thanks 👍 I suppose the wording "The court order only affects the interest in the property of that person" is what is confusing here ... 

jwalrus9

@silvercar thanks for this, so would that mean if/when my mum sells property, the restriction would die with the new owners? As a charging order can't be made against joint owners ? 

Tiglet2

jwalrus9 said:

@silvercar thanks for this, so would that mean if/when my mum sells property, the restriction would die with the new owners? As a charging order can't be made against joint owners ? 

Sort of. 

The solicitor acting for a new owner will want the restriction removed, so that will mean you/your solicitor will have to obtain written consent from the creditor in order that your solicitor can make an application to the Land Registry to have the restriction removed, all before exchange takes place.  The buyer's solicitor will want proof that it has been done, by way of an updated title being provided, to confirm that the restriction is no longer there.

I don't think Form K restrictions need to be removed before exchange, but read the thread linked to by Silvercar - it explains.

Divorcing_Dad

jwalrus9 said:

@silvercar thanks for this, so would that mean if/when my mum sells property, the restriction would die with the new owners? As a charging order can't be made against joint owners ? 

Would it not be easier to track this creditor (or if they're deceased, their estate)?
I mean, whilst you're not in contact with them, I'm pretty sure they'd be interested to find out they might still get their money.

Are we talking huge amounts?

silvercar

I'm no expert, but I think it all means that the charging order is against the property, but the obligation to repay it is only against your father and not your mother. 

Further, the debt should have been cleared from your father's estate, assuming there were funds in the estate and at the point he was no longer the part owner of the property (as deceased) the charging order has no effect. Now that your mother is selling as sole owner the creditor shouldn't be able to make a direct claim on the sale proceeds. 

I don't know how you force the creditors to agree to the removal of the charge. If they are obstructive it may need legal action. 

Of course, if the amount is small it could be easier to pay it. If a large amount or some principle is involved you may have to consider action.

RAS

Based on other threads, the really important thing to do if your mother sells the property is to have an in depth conversation with the preferred solicitor before you engage them.

Based on posts here, some solicitors fulfil their legal obligation by informing the creditor of the sale at completion and some insist that the debt has to be cleared on completion. 

Your mother need to know which she is dealing with before passing their details to the vendor's solicitors.

jwalrus9

@Divorcing_Dad not a huge amount but how do I pay someone if I have no contact information for them? 😕

Keep_pedalling

jwalrus9 said:

@Divorcing_Dad not a huge amount but how do I pay someone if I have no contact information for them? 😕

If the creditor has truly untraceable then the only way to get it removed is via the courts. Is the creditor an individual or a company? If the latter what is the companies name?