Charging Order? The myth

wembley14 · 16 May 2014 at 7:33PM

Hello everybody,
just another update to my epic saga of property sale.

The 23rd may is hopefully our completion date. The creditor has sent my solicitor a letter recently with options to pay debt out of proceeds. This amount has risen to 6k from 4k ????. the buyers solicitor has requested mine to hold sufficient funds to discharge this amount. They obviously don't or refuse to have confidence in LR rules regarding these restrictions.

my solicitor has told creditor that the restriction will be overreached but has not yet replied.

creditor is trying their best to get paid but I have instructed my solicitor not to pay anything and just hold back sufficient funds as safe guard for buyer until registered with clean title.

in the letter sent by the creditor they constantly mention charging orders and not restrictions so trying to put frighteners on. luckily my lot know the difference.

I will let you know what happens, hopefully on completion.

eggbox · 16 May 2014 at 7:46PM

Keep in there Wembley and your Solicitor actually needs praising for helping you on this one!

The Creditor is stuck due to what the CO has been made against as it can't prevent a sale proceeding. The only real thing they can do is try to obtain a freezing order against the proceeds. But this is extremely expensive and time-consuming process for them and carries the following burdens,

• The applicant has a duty of full and frank disclosure which can be burdensome. Whilst discharging this duty normally uncovers facts which are essential to the litigation, the effect is to front-load costs

• The applicant will be required to give a number of undertakings to the court including:

• an undertaking to pay damages to the respondent if it is later shown that the injunction should not have been granted (such damages could be significant if the respondent has, for example, been restrained from using assets in the course of his business)

• an undertaking to pay costs reasonably incurred by a third party in complying with the injunction, for example, the costs sustained by a bank in freezing an account

• The applicant risks being in contempt of court should he breach the undertaking given to the court

So the chances of it happening for a few thousand owed is not going to happen.

wembley14 · 16 May 2014 at 9:12PM

Thanks Eggbox for reply, it certainly sounds the next option for creditors could be pretty daunting. I will make a note of the list you have given me. Once again thanks for all advice and comments that will have helped a lot of people on this thread.

"knowledge is power"

eggbox · 16 May 2014 at 9:30PM

No problem.

In reality creditors probably don't know what to do as they've been so used to lemon solicitors just handing over their clients money without a fight. But a CO is NO GUARANTEE you will get your money back just as a CCJ isn't.

totalidiot · 20 May 2014 at 10:57AM

Hi MoneySaving Convert - just read your posting of five years ago! are you still contributing?

You say "If both joint owners sell the land to a third party the restriction will be cancelled when the transfer to the purchasers is registered"

Does cancellation apply if property has only one owner? Restrictions have carried over onto my purchase i.e. Register of Title still carries 2 restrictions/interim charging orders.

Regards

eggbox · 20 May 2014 at 11:02AM

Were you sold the property by a sole owner or joint owners?

wembley14 · 1 July 2014 at 8:58PM

Hello fellow posters
I am wondering if this thread is still going, there has been no postings for a while.
since my last contribution we have managed to eventually sell our property. But to get it completed we had to let our solicitor hold back sufficient funds as a guarantee so that the new buyer could register the property.
it has been 5 weeks but still no registration completed.
The creditors have been playing hard ball by insisting that they will give no consent or signed certificate so that the restriction cannot be complied with.
They say that the restriction in place is not a standard k form because it is worded different from original restriction that was entered. they say original one will be overreached but not the differently worded one.
I have told my solicitor not to go along with them because new buyers interest takes preference.
He has been told that the creditor will not give consent to removal of restriction which is in my name only.
Have they got any credence with this defiance.
I have been reading through this thread again and found KOOKYKATHRINE had exactly the same predicament. Pity she never came back to let us know her outcome.
automatic cancellation by LR should now apply now that property has new owners, SURELY THIS IS THE CASE.

eggbox · 1 July 2014 at 11:36PM

Hi Wembley and thanks for the update.

As I see it, the Restriction now has to become "clearly superfluous" (as the Land Registry puts it) as the CO is against BI no longer in the property concerned. It therefore has to be removed as the buyers interests take priority. The fact their are different terms on the Restriction, to me, makes no difference; it's still only a Restriction.

Maybe Land Registry Rep can give his opinion tomorrow?

Land_Registry · 2 July 2014 at 9:43AM

eggbox wrote: »

Hi Wembley and thanks for the update.

As I see it, the Restriction now has to become "clearly superfluous" (as the Land Registry puts it) as the CO is against BI no longer in the property concerned. It therefore has to be removed as the buyers interests take priority. The fact their are different terms on the Restriction, to me, makes no difference; it's still only a Restriction.

Maybe Land Registry Rep can give his opinion tomorrow?

Without specifics it can be difficult to give anything but a general view here and clearly there are some difficulties around the specific situation/title.

The situation re a form K restriction has been set out many times in this thread but you mention that the existing restriction is not a form K. If that is the case it is the wording which will be important here in deciding if it is overreached or not - some standard restrictions may also fall automatically but if it is non-standard (wording chosen by applicant) then issues may arise.

I can't find a post with the wording set out on here though?
But it also sounds as if the registration has been lodged and is still live presumably waiting for the problem to be resolved - is that the case as well?

eggbox · 2 July 2014 at 9:50AM

Hi LRR

I'm 99% sure it was a Restriction that states,

No disposition............unless written notification is given by the creditor of being notified of the sale

Assuming that's the case, can I ask what the LR view is when it's clear the creditor has been notified of the sale (as is the case here)

And, given the Restrictions terms are only regarding notification (not payment) do the buyers interests still not overeach this type of Restriction?

Charging Order? The myth

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