Very old second charge on property we’re selling

Bernard_Coleslaw

We’re selling my late mother’s house after she passed away last year.

The conveyancers have been in touch as there’s a charge dating back to 1989. I faintly remember when my parents bought the house their solicitor for *that* transaction helped them with bridging finance and registered the charge to secure this.

Trouble is, there’s just no record of anything happening afterwards. I’d have thought the bridging was paid off relatively quickly, but we’re talking 30+ years ago and there’s no paperwork. When she paid off the main mortgage after dad died in 2010, Halifax released the deeds to her. The original solicitor firm they used is no longer trading, and a bit of detective work suggests the named solicitor retired, moved an Australia and died years ago.

Bit of an odd one. Has anyone experienced anything similar?

user1977

Yes, there are frequently old undischarged securities left lying around - who was the lender? What are the conveyancers asking you? This shouldn't be uncharted territory for them...

Bernard_Coleslaw

user1977 said:

Yes, there are frequently old undischarged securities left lying around - who was the lender? What are the conveyancers asking you? This shouldn't be uncharted territory for them...

The original solicitor was the actual lender for the bridging (which sounds very odd to me) so their subsequent disappearance makes this all rather complicated. 

GDB2222

I fear that this could be difficult. You can get charges removed, but you need some evidence that the charge has been satisfied. In this case, there are no witnesses to testify to this, and there’s no paperwork. So, you are left with your supposition that the charge was satisfied long ago. That’s almost certainly true, but I don’t think the LR will look at it that way.

The guidelines are https://www.gov.uk/government/publications/discharge-of-charges/practice-guide-31-discharges-of-charges

If you can’t get the charge removed, you can still sell the property to a cash buyer who is willing to take a risk, but he will obviously want a discount. I’m guessing 30% maybe. 

It would be worth putting some work into tracking down the charge holder or his executor. 

housebuyer143

GDB2222 said:

I fear that this could be difficult. You can get charges removed, but you need some evidence that the charge has been satisfied. In this case, there are no witnesses to testify to this, and there’s no paperwork. So, you are left with your supposition that the charge was satisfied long ago. That’s almost certainly true, but I don’t think the LR will look at it that way.

The guidelines are https://www.gov.uk/government/publications/discharge-of-charges/practice-guide-31-discharges-of-charges

If you can’t get the charge removed, you can still sell the property to a cash buyer who is willing to take a risk, but he will obviously want a discount. I’m guessing 30% maybe. 

It would be worth putting some work into tracking down the charge holder or his executor. 

Would anyone take on a property with a charge on it? They will be unable to register it in their name until it's removed so doesn't sound like a great idea. 

springmagpie

I would suggest speaking to Land Registry, like the previous poster said there will have been others in this situation and they are likely to have a process to follow to get it removed.

GDB2222

housebuyer143 said:

GDB2222 said:

I fear that this could be difficult. You can get charges removed, but you need some evidence that the charge has been satisfied. In this case, there are no witnesses to testify to this, and there’s no paperwork. So, you are left with your supposition that the charge was satisfied long ago. That’s almost certainly true, but I don’t think the LR will look at it that way.

The guidelines are https://www.gov.uk/government/publications/discharge-of-charges/practice-guide-31-discharges-of-charges

If you can’t get the charge removed, you can still sell the property to a cash buyer who is willing to take a risk, but he will obviously want a discount. I’m guessing 30% maybe. 

It would be worth putting some work into tracking down the charge holder or his executor. 

Would anyone take on a property with a charge on it? They will be unable to register it in their name until it's removed so doesn't sound like a great idea. 

The property can be registered in the new owner’s name, even if the charge remains. They can live in it or rent it out. The risk is that the charge owner turns up and seizes the property. After all this time, it is a risk someone will take, providing there is a big enough incentive. 

housebuyer143

GDB2222 said:

housebuyer143 said:

GDB2222 said:

I fear that this could be difficult. You can get charges removed, but you need some evidence that the charge has been satisfied. In this case, there are no witnesses to testify to this, and there’s no paperwork. So, you are left with your supposition that the charge was satisfied long ago. That’s almost certainly true, but I don’t think the LR will look at it that way.

The guidelines are https://www.gov.uk/government/publications/discharge-of-charges/practice-guide-31-discharges-of-charges

If you can’t get the charge removed, you can still sell the property to a cash buyer who is willing to take a risk, but he will obviously want a discount. I’m guessing 30% maybe. 

It would be worth putting some work into tracking down the charge holder or his executor. 

Would anyone take on a property with a charge on it? They will be unable to register it in their name until it's removed so doesn't sound like a great idea. 

The property can be registered in the new owner’s name, even if the charge remains. They can live in it or rent it out. The risk is that the charge owner turns up and seizes the property. After all this time, it is a risk someone will take, providing there is a big enough incentive. 

Ok, definitely not someone who needs a mortgage then. I don't imagine they will sign off on being charge number 2.

GDB2222

housebuyer143 said:

GDB2222 said:

housebuyer143 said:

GDB2222 said:

I fear that this could be difficult. You can get charges removed, but you need some evidence that the charge has been satisfied. In this case, there are no witnesses to testify to this, and there’s no paperwork. So, you are left with your supposition that the charge was satisfied long ago. That’s almost certainly true, but I don’t think the LR will look at it that way.

The guidelines are https://www.gov.uk/government/publications/discharge-of-charges/practice-guide-31-discharges-of-charges

If you can’t get the charge removed, you can still sell the property to a cash buyer who is willing to take a risk, but he will obviously want a discount. I’m guessing 30% maybe. 

It would be worth putting some work into tracking down the charge holder or his executor. 

Would anyone take on a property with a charge on it? They will be unable to register it in their name until it's removed so doesn't sound like a great idea. 

The property can be registered in the new owner’s name, even if the charge remains. They can live in it or rent it out. The risk is that the charge owner turns up and seizes the property. After all this time, it is a risk someone will take, providing there is a big enough incentive. 

Ok, definitely not someone who needs a mortgage then. I don't imagine they will sign off on being charge number 2.

Generally, properties that can only be bought by cash buyers are discounted- maybe 30%.  In this case, there’s a theoretical chance of someone turning up and demanding payment of an old loan, so the discount needed to attract a buyer might be bigger. 

Perhaps @Land_Registry could comment on whether there is any way to remove the charge without evidence of it having been satisfied?  

MacPingu1986

There should ultimately be a way to get rid of the charge and charges not being removed is an issue that comes up from time to time against both property and companies. - It will likely involve an application to the land registry that you might need help from a property lawyer on. Start with a call to the land registry first and then take it from there.

user1977

Solutions as far as I can see are:

1. find the creditor's successors (i.e. executors, assuming it was in his own name and not a firm etc) and get them to discharge it
2. go to court with persuasive evidence that nothing is due.
3. hunt around for some unregistered discharge if it had in fact been granted but has gone astray.
4. get indemnity insurance (though as above I doubt many people would find that an acceptable remedy as it means it never gets sorted properly).