Divorce - how is house equity charge back registered with Land Registry?

Hermann

If going through a divorce and the house which is jointly owned is to be transferred to one party whilst the other party is to have a percentage of the equity retained for a period of time then how is this registered with Land Registry?

Situation is...
Divorce applied for.
Conditional Order granted.
Mediator has drawn up a Financial agreement that both parties agree.
Documents being prepared to obtain consent order & also register changes at Land Registry

Currently the agreement is that PartyA continues to live in the house with the children whilst PartyB lives elsewhere and will have children part time.
The ownership of house will be transferred from joint owners to solely PartyA with Party A taking out a mortgage to release joint mortgage whilst PartyB retains a percentage of the equity as Party does not have funds to pay out that equity.
The agreement has various clauses regarding no further lending against the house, no sale without repayment & various triggers for the repayment of that percentage to take place.
I believe this is known as 'Charge Back'.

PartyA is to meet the costs of the property & mortgage transfers.

The question is how is this charge back element of the financial agreement actually registered with Land Registry?

The mediator has drafted the financial agreement and is dealing with the d81 forms.

To date a TR1 Land registry form has been produced by PartyA solicitor who is dealing with the transfer (not divorce lawyer ) which they expect PartyB to sign to allow the change of ownership to be registered at Land Registry. There is no mention of the charge back arrangements on the TR1 in any form be that a charge over the property or a restriction registered.

Should some form of restriction or charge be mentioned on the TR1 is this registered on some other form? If so which form?

It is being said the TR1 form needs signing to progress the Financial Agreement to the court to get the Consent Order granted & also the mortgage transferred. 

This a relatives divorce but I'm concerned the signed TR1 might simply allow the transfer of ownership and new mortgage without any of the charge back details being applied to the Land Registry so would like to know what other forms are involved to register the retained equity.

Also is it usual to sign TR1 forms in advance of the Consent order, perhaps so they are prepared and ready to actually submit at a later date?

Land_Registry

It's very much legal advice B needs here to ensure that their interest is protected through the legal process but also on the land register as appropriate. 
Practice guide 19: notices, restrictions and the protection of third-party interests in the register - GOV.UK offers guidance on the protection of third party interests for example but what's 'usual' here isn't something we can advise on. Our role is to register the outcomes of such discussions/deliberations and we have no part to play in advising or recommending specific options. 
If the restriction option is taken then A's consent would be needed and form RX1 would be used - the solicitor for A would be aware of this and perhaps expectant that protecting B's interest is needed but very much a matter for B to get appropriate legal advice on and to resolve before completing the transfer

Hermann

Thanks for the reply.

If a restriction was to registered using form RX1 would this be submitted at the same time as the TR1?

If they are submitted at the same time should panel 11 of TR1 mention the restriction being registered by the RX1 form?

Also I note that the guidance mentions that 'standard restrictions' can be registered using solely Panel 11 of Tr1. Am I right in thinking that a custom agreement of the sort mentioned above and provided by the consent order would not fall within the scope of a 'standard restriction' that can be registered in panel 11 Tr1?

Land_Registry

Hermann said:

Thanks for the reply.

If a restriction was to registered using form RX1 would this be submitted at the same time as the TR1?

If they are submitted at the same time should panel 11 of TR1 mention the restriction being registered by the RX1 form?

Also I note that the guidance mentions that 'standard restrictions' can be registered using solely Panel 11 of Tr1. Am I right in thinking that a custom agreement of the sort mentioned above and provided by the consent order would not fall within the scope of a 'standard restriction' that can be registered in panel 11 Tr1?

I would suggest Yes if one is dependent on the other but it could be submitted after the Transfer as well as it's all about consent by the legal owner
PG 19 and form TR1 guidance explain the options re completion/application for you - Registered title(s): whole transfer (TR1) - GOV.UK and panel 11 of form TR1 can be used to apply for a standard restriction as PG 19 section 3.5.1 explains 
Please do seek legal advice as to how 'best' to approach such matters and what protection should be created for party B. Our online guidance explains how to apply once 'best' has been identified

Hermann

Thanks again, I think the fact that A's responsible for the costs involved means the expectation is that A's solicitor will prepare all the appropriate paperwork and present to B to sign.

At that point B will either decide if they are happy to sign or to get a solicitor to review what has been prepared. I'd agree that the best thing would be to have a solicitor review but can see the point that the documents should be drafted and ready to review first to keep costs down.

To that end a TR1 has been prepared & presented for signing but panel 11 is blank & there are no other forms prepared such as the RX1 so that is already ringing alarm bells, along with the request to sign in advance of the Consent Order.

My post was partly to get an understanding of whether those alarm bells were justified or not. Your replies have helped with that.

The argument for B to involve a solicitor is a strong one but it seems sad & frustrating that an amicable situation is turned more contentious than needed to be. Something best realised before signing than after though.