Charging Order? The myth

MrsBlackburn · 15 February 2019 at 11:28AM

Hi. Can anyone help with a slightly nuanced version of this situation? I jointly owned a property with my ex-husband. There is a restriction on it (I only ever received interim paperwork not final, so not sure if it was ever made final (or whether that even matters)).

My husband now (finally) has a mortgage in his own name and I am no longer on the mortgage. I received no money for the transfer from joint to sole mortgage because the property is in negative equity (and to be honest, I just want rid of it).

I have been arguing with his solicitors for some time now that all they have to do is write to the creditor to notify them of the transfer and then inform the land registry that have done so; thereby cancelling the restriction automatically through over-reaching.

However, he is now on his third solicitor with the same firm, and they are telling me that form RX4 is needed to remove this restriction. They won't tell me why my understanding of the situation is wrong.

Does overreaching not apply in my circumstances because I only sold to my ex-husband, rather than us both selling to a third party?

If I sign an authority allowing his solicitor to contact the creditor to get them to send form RX4 from them - can the creditor refuse? Can the creditor insist that I repay the debt even though I received no money from the transfer from joint to sole names?

I contacted the Land Registry asking them to explain if my understanding of over-reaching was correct or not, and whether the solicitor just needs to tell the creditor of the sale, and then just inform the Land Registry of such, but the Land Registry replied to say that the application last year was cancelled as the solicitor didn’t reply to the requisitions, and form RX4 was needed, but didn't explain why my understanding of the correct process was wrong.

I’m happy to sign the authority for his solicitor to contact the creditor, if the result would be them sending form RX4 without issue because I received no money from the sale for them to claim repayment from, but I can’t find anything that talks about my situation to establish whether if I do that, I’m at risk of the creditor insisting on me repaying the debt before they will send form RX4, regardless of the fact I received no money from the sale. Does the no obligation to pay any money still stand?

Any advice would be appreciated.

Thanks

eggbox · 15 February 2019 at 12:04PM

Mrs Blackburn

Unfortunately, overreaching only occurs when you sell the property to a third party for "valuable consideration" (money.) Overreaching occurs as the asset the Charging Order is attached to (the debtors share of the equity) has been turned into cash and has left the property concerned. Overreaching, therefore, doesn't occur when you transfer your interest in the property to a joint owner.

Signing over your interest in the property, therefore, won't remove the Restriction as the CO is will remain attached to your interest in the property even if you have transferred that interest to your partner.

The creditor also won't, voluntarily, remove any Restriction unless he is guaranteed to receive the funds owed. This is because the property may be in negative equity now but that doesn't mean it will be that way in the future as house prices rise?

jpirate · 15 February 2019 at 4:26PM

Hoping someone can help, it's still charging order related but from my point of view.... If I part paid towards a property for my son and his partner, they pay the balance themselves, can I myself place a charging order on their property to protect my money from going to my son's partner in case of break up for instance, or to make sure the money I paid cannot be taken by one of their creditors, should my son and other half, god forbid, find themselves in a bad financial position and have a creditor place a co against their property. I'm assuming my co would come before any creditor's?

Hope it's ok to put here, it is still CO related!

Many thanks

eggbox · 15 February 2019 at 4:35PM

jpirate

Yes but its called a Legal Charge.

You use form CH1 to register the charge on the property concerned.

MrsBlackburn · 15 February 2019 at 10:33PM

Thanks for explaining! It’s a shame this means the restriction remains, but hey ho, at least I’m not stuck on the mortgage anymore.

jpirate · 17 February 2019 at 10:49AM

Thanks eggbox, I've looked at that and it sounds like a mortgage?

With what I put in and my son's share, him and his wife should be mortgage free. Would I still use the legal charge to protect my contribution and would the charge fall away on my death or could it be written in to the charge.

Or would a will be better?

Thanks in advance

eggbox · 17 February 2019 at 5:26PM

A mortgage is a legal charge so it is the same thing as its an agreed charge between two parties. This is in contrast to a Charging Order, whereby, a Court decides to impose the charge on a creditors behalf.

Repayment of the money lent should also be written into the terms of the charge.

Vegan64 · 19 February 2019 at 6:06PM

My apologies I'm a newbie, landed here in desperation. I'm (hopefully) in the process of re-mortgaging the marital home in my sole name as my ex has left & agreed to me keeping the house. I've recently discovered Restrictions in the form of interim charging orders in my ex-husbands sole name. Can anyone confirm if removing him from the mortgage will also remove any beneficial interest he has in the property please?

eggbox · 19 February 2019 at 7:01PM

Vegan64

No it wouldn't. It's what is registered on the deeds that will determine who has any beneficial interest in the property. Removing him from the mortgage, therefore, won't have any effect on that.

Any any beneficial interest your ex has in the property is, legally, minus the amount of the Charging Order debt amount. So even if he agrees to have his name removed from the deeds the restriction will remain.

But if you read this thread you will understand that the Restriction will present no problem to you whilst you choose to remain in the property. It will also explain your options should you also decide to move in later years.

Vegan64 · 20 February 2019 at 2:08PM

Thanks so much eggbox.

I've read through the thread and believe the 14 day issue may assist, but I'll cross that bridge when I get there. Your kind help is much appreciated.

Charging Order? The myth

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