Charging Order? The myth

Walmsley7274 · 17 August 2018 at 12:20PM

Hi

Long time lurker but never posted, however, I'm jumping on this thread for some advice, but please let me know if I need to start my own.

I am the registered sole owner for a property, however, I have a joint mortgage and 2nd mortgage with my partner and his equality / interest is registered within the restriction section. This has been in place since the 17th June 2006 with an underpinning agreement that the equity would be 50/50,. The reason for this it was a right to buy from the council many years ago and I was the tenant, therefore I was the sole owner but my partner could have a restriction with an underpinning agreement for the equity.

There have been 2 equitable charges placed on the property for debts solely in my name registered in 2009. However, I only have a part interest in the property as indicated by the restriction for my partner in 2006 and as we are selling to separate he wants his equity protecting.

Based on the sole proprietor algorithm from the land registry (online) and the flow chart which is attached to the guidance, should these have been placed as a restriction, opposed to a equitable charge? As there is representation within the title deeds that part of the property is held in trust for my partner.

Any advice would be appreciated :-)

Cheers

eggbox · 17 August 2018 at 1:11PM

Walmsley7274

Land Registry Rep may be able to clarify if the charges should have been restrictions? But your partner's equity is protected by virtue of the fact that his interest was registered on the deeds prior to the Charging Order dates.

When the property is sold the interests on the register are settled in order of the date they were registered.

Walmsley7274 · 17 August 2018 at 2:00PM

Hi EggBox

Thank you for the advice.

When the propriety is sold there wouldn't be enough of my equity to cover the charges to remove them and I'm worried that would stop a sale going through, which is why I was wondering whether they should have been restrictions in that my partner as an interest in the property from the date I acquired the property.

The main charge is held by a company which has now been dissolved but the debt is currently with Cabot who I am hoping to come to a full and final arrangement with them if I explain the situation. (hopefully)

eggbox · 17 August 2018 at 2:25PM

Again, Land Registry Rep may be able to shed some light on what happens in these circumstaces? However, as I see it a Charging order wouldn't be able to block a sale as it isn't a guarantee to repay the creditor in full. It's to be repaid from the asset it's attatched to and if that asset isn't valuable enough then that's too bad on the creditor?

Any amount not repaid would still be owed to the creditor but its then their problem to collect?

Walmsley7274 · 17 August 2018 at 3:40PM

I thought (and would be very happy to be corrected) that if the equitable charge was not settled, then they would refuse to lift the equitable charge on the title deeds and this would deter the any buyers?

This is all very confusing but I have asked the land registry whether it should be a restriction in light of other people interested in the property.

Thank you for your advice :-)

Land_Registry · 20 August 2018 at 8:31AM

eggbox wrote: »

Again, Land Registry Rep may be able to shed some light on what happens in these circumstaces? However, as I see it a Charging order wouldn't be able to block a sale as it isn't a guarantee to repay the creditor in full. It's to be repaid from the asset it's attatched to and if that asset isn't valuable enough then that's too bad on the creditor?

Any amount not repaid would still be owed to the creditor but its then their problem to collect?

Noted charges are not automatically cancelled so any purchase is very unlikely to complete in such circumstances
The OP has contacted us directly already re the specific circumstances so hopefully will post again once the response is received.

eggbox · 20 August 2018 at 12:19PM

LRR

Thanks for the update. So what you are saying is that if noted charges aren't removed by the creditor then the sale is unlikely to proceed as the new buyer won't want to be responsible for the charge remaining?

But can I clarify that if the buyer is happy for the charge to remain then the transfer can still proceed? I'm only asking as, in certain cases, if the charge is not attracting interest there can be some buyers, such as a builder looking to develop and sell the property in a short space of time, who wouldn't see the charge as a problem as long as the there has been negotiation to allow for the charge amount?

Land_Registry · 21 August 2018 at 6:39AM

eggbox wrote: »

LRR

Thanks for the update. So what you are saying is that if noted charges aren't removed by the creditor then the sale is unlikely to proceed as the new buyer won't want to be responsible for the charge remaining?

But can I clarify that if the buyer is happy for the charge to remain then the transfer can still proceed? I'm only asking as, in certain cases, if the charge is not attracting interest there can be some buyers, such as a builder looking to develop and sell the property in a short space of time, who wouldn't see the charge as a problem as long as the there has been negotiation to allow for the charge amount?

Noted interests don't usually prevent a sale. It's restrictions that have to be complied with.
If the buyer was happy to buy in such circumstances then they can get the title with the interest still protected.
Very unusual but possible

Andy1977j · 28 August 2018 at 11:29AM

I will try to explain as simple as possible

I have a property that is joint ownership
It has several restriction all I believe areform k against the title all placed in section B of the title (all placed in sole named)
I am willing to pay all of these with the sale of the property!
The issue is that one of the restriction (no6) is placed by direct auto finance. The debt was sold on to hillesden and they placed there own charging order (no10) this is now being managed by Mortimer Clarke
I have sold my property subject to contract but have not been able to exchange contracts was due to do last Friday as I can’t get Mortimer Clarke to agree to remove the interim charging order (no6) placed by direct auto finance when the debt is payed
My conveyor is not being at helpful in this only saying the exchange will happen when we find out who will remove the restriction I would chang but think I am to far gone with sale!
If land registry is still on here my title number is EX 599751
Any help with this would be much appreciate

eggbox · 28 August 2018 at 12:28PM

The first question has to be why Mortimer Clarke (not the brightest bunch I agree) are refusing to remove the restriction given you have indicated you are willing to settle the charge?

You can also explain overreaching to your numbskull conveyancer to demonstrate why Mortimer Clarke's stance is irrelevant.

Charging Order? The myth

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