Charging Order? The myth

eggbox · 9 December 2019 at 3:53PM

CStar75

Unless there is a back story to the debt owed (eg; the solicitor involved genuinelly believes you have the money to repay) then its almost unheard of a high street bank taking this action due to the "reputational" issues involved (meaning it doesn't look good when a, supposedly, "friendly" bank is seen trying to put families on the street?)

So can I ask what the actual paperwork is you've been sent and who has issued it? I can only believe this is a bluff or fishing exercise to see how you react to the OFS being applied for so I suspect its come from the bank?

Can I also ask what the interest charges are that you say the bank are continually adding?

CStar75 · 9 December 2019 at 4:44PM

I am happy to send an image via email of the documentation sent if you could provide me with an email address. They are charge 8% - £6.97 per day.

eggbox · 9 December 2019 at 4:55PM

CStar75

Have sent email address by PM

Can you also let me know in the PM how much the debt was for if you can, please?

CStar75 · 9 December 2019 at 5:35PM

Hi, I havent received your PM as yet. I have taken images of the documentation sent which I can send to you. The form sent to me from Court is titled Claim Form (CPR Part 8). I had a £3,000 quote from a solicitor today to represent us, this is way out of our reach so fear we will be going through this without legal representation!!

eggbox · 9 December 2019 at 7:20PM

CStr75

Have sent again but I will have a look at the form you've indicated you've been sent

Mypnut · 15 December 2019 at 3:01PM

Hello. Hoping someone can help.

I'm midway through divorce and my house has been repossessed.Fortunately it was sold quickly and I have been informed there is a surplus.
I
The mortgage solicitors have wrote to me and told me to inform them about and other charges on the deeds, or any claims and disputes so the surplus can be paid out.

On the deeds there are 6 restrictions interim orders . 3 in my name 3 in the ex's name. However I was unawAre of any of them. These total over 40K

That aside. The first restrictions are in my ex's name and this would take up all of the surplus and if these were paid in order I would still be left in massive debt.

so my questions are

Do the restrictions \ interim orders still stand seem as the property is repossessed ? I know the debts still exist but do they need to be paid for at this point.

do the debts need to be paid in order by the solicitor or can I request my share of the surplus to try and negotiate my debts separately! I

I was hoping someone could clarify

Thank you

eggbox · 15 December 2019 at 4:17PM

Mypnut

I will defer to Land Registry Rep to clarify this, but my understanding is that Practice Guide 75 Section 2 explains that all other charges on the register are removed, upon transfer of the property to the new purchaser, when a power of sale has arisen by the first charge holder (the mortgage company) and the proceeds are usually then repaid to the previous owners.

This is because, at the point of the transfer, there is no longer any equitable debt outstanding that prevents the sale of the property concerned.Therefore, you are within your rights to request the remainder of the sale proceeds (or your share) to be returned from the Solicitor concerened to settle the debts yourself.

Your Solicitor will most likely try not to play ball on this but you should insist that the money is yours and you wish to settle the debts yourself from the proceeds remaining. If the Solicitor explains he has a legal duty to pay the proceeds to creditors ask him to clarify where the Law states this is so?

But, hopefully, LRR will be able to clarify what standing charges have when removed from the deeds? In any event, your partners debts can only be repaid from his share of the equity meaning that if his debts were, say, £40k and there is only £40k equity remaining; then only £20k could be used to repay your partners debts as you own the other £20k (assuming you both have a 50:50 interest in the property.)

Land_Registry · 16 December 2019 at 8:16AM

Mypnut Practice Guide 75 section 2 is the guidance you need here and I suspect section 2.2.8 is relevant if the debts you refer to are protected by separate form K restrictions.

The key from a registration perspective is the priority of the legal charge (mortgage) over such interests. If it has priority then it will normally overreach such interests
You’ll note that with form K restrictions that they still have to be complied with in the same way this thread explains.

eggbox · 16 December 2019 at 8:59AM

LRR

Thanks for the update above but can I ask you to clarify why a Form K still has to be complied with in this circumstance?

I'm sure you'll put me right, but if the restriction is removed from the deeds (through a power of sale) will it no longer have any effect in preventing a sale proceeding even if not complied with (so what relevance does compliance now have?)

Also, the property (as far as the original owner is concerned) is not being sold its being repossessed which doesn't, automatically, mean that a sale is imminent? You have always said the wording of the restrictions is crucial and a Form K mentions nothing about repossession?

Mypnut · 16 December 2019 at 4:31PM

To clarify the mortgage company has already repossessed the property from myself and it has been sold on to another purchaser who is now living there.

The mortgage company solicitor has replied to me saying the restrictions have not been removed and they will distribute surplus to those next entitled. Any further advice appreciated

Charging Order? The myth

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