Charging Order? The myth

Land_Registry · 29 January 2015 at 12:23PM

They are, I suspect, referring to the wider options available so you can sell or give it away BUT to do so you have to transfer the whole legal title.

Invariably this is what happens to achieve the end result if that is what the parties want.

When it comes down to death/inheritance for example things can get quite complicated as the surviving owner may for example be staying out until they die so they leave things 'as is' and then deal with the property after that death as the tenants in common restriction no longer restricts as there is no sole surviving owner.

So what they are stating is correct but the process for doing so is left unexplained as that is the part the solicitor will then deal with on your behalf.

eggbox · 29 January 2015 at 12:40PM

Land_Registry_representative wrote: »

They are, I suspect, referring to the wider options available so you can sell or give it away BUT to do so you have to transfer the whole legal title.

It comes as no surprise, but the law firm websites I have read definitely do not make this point clear and they read like the share can be sold as a separate entity?

But thank you for explaining this!

asparagus18 · 29 January 2015 at 12:54PM

I couldn't say I fully understand the ins and outs of the excursion in the last few posts but I'm sure it's useful information for some people.

Maybe my last question has got lost in the muddy waters of law and land (registry)

asparagus18 wrote: »

Thanks for the informative posts – looks like that route is closed then.

However, in posts 1698 and 1701, skintbex describes a situation not too dissimilar:

“I am selling my property to my ex and his wife. It's currently in joint names, and he's basically remortgaging and buying me out.”

Is the vital difference here the fact that there is a third party (the new wife) involved, in addition to one of the current owners?

Any clarification would be much appreciated.

Coinmachine · 5 February 2015 at 11:18AM

Coinmachine wrote: »

I read it as they are intending to issue proceedings to get a charging order but wont take any more action than that as long as I keep paying, so I have asked them to reconsider the intention to issue proceedings.

Like I said maybe it is a standard letter but the way it is worded makes me think not:

'Thank you for your recent offer of payment for £xx due by xx Feb 2015' - There was no recent offer its the sum I have been paying since last March.

'Please continue to make the proposed payment to this account as it will reduce your balance and will indicate your intent to repay this debt'

'Interest is not currently being charged to your account, but due to the balance outstanding it will take considerable time to clear it'

'In view of this, it is our intention to start legel proceedings. If we get a court judgement we may then apply for a charging order on any property you may own. If granted, this will mean that this debt is secured against your property'

'However, whilst you continue to make these payments, subject to regular review of your financial means, we dont intend to take any further recovery action other than that described above'

Eggbox - an update to my previous post. I heard nothing back form Nationwide until yesterday I received a 'final demand' notice. I spoke to them today, they said keep paying via Stepchange but they will be seeking a charging order. Having read up on all this I am not too concerned, property is in joint names and we have no intention of selling.

I wonder when it comes to the hearing if there is any worth in my attending to explain that I think it is disproportinate, other lenders I owe more to havent done this, that the DMP is less than a year old and I hope to increase payments when wages rise etc and that the property is joint. Is there a risk now that other lenders will get wind of what Nationwide are doing and seek to do likewise?

eggbox · 5 February 2015 at 11:38AM

Coinmachine

My view is that a CO not being granted is as rare as an OFS being granted. However, I have always advised attendance as on the day you may just be the exception and if you don't attend you definitely WILL get a CO against you (and I have to say, given your circumstances and attempts to try and repay through a DMP, they deserve not to get a CO granted!)

And whilst the Courts do take a first come, first served attitude to creditors seeking a CO, the Judge is supposed to take into account other creditors interests so I would play heavily on that and ensure the DMP is pushed as your intention to repay.

But you are taking the right attitude regarding the CO on jointly owned property as there is little they can do after a CO is granted. You can also reduce your payment to them to £1 a month stating you now have to repay other creditors more to avoid them proceeding with a CO (which may be worth pointing out to them before they proceed as the threat of a CO may just be a scare tactic to up your payment?)

Coinmachine · 5 February 2015 at 1:31PM

eggbox wrote: »

Coinmachine

My view is that a CO not being granted is as rare as an OFS being granted. However, I have always advised attendance as on the day you may just be the exception and if you don't attend you definitely WILL get a CO against you (and I have to say, given your circumstances and attempts to try and repay through a DMP, they deserve not to get a CO granted!)

And whilst the Courts do take a first come, first served attitude to creditors seeking a CO, the Judge is supposed to take into account other creditors interests so I would play heavily on that and ensure the DMP is pushed as your intention to repay.

But you are taking the right attitude regarding the CO on jointly owned property as there is little they can do after a CO is granted. You can also reduce your payment to them to £1 a month stating you now have to repay other creditors more to avoid them proceeding with a CO (which may be worth pointing out to them before they proceed as the threat of a CO may just be a scare tactic to up your payment?)

Thanks - great advice, and I did wonder when I called if they would try the tactic of seeking to make me pay more but they didnt, just straight down the line, keep paying but were seeking a charging order.

Griff106 · 8 February 2015 at 3:40AM

blueback wrote: »

I feel that this is so important that I thought a new thread should be made to highlight the importance of understanding the law on Charging Orders and how many people are stuck with their property in the false believe that they have had a Charging Order put on their property.

In particular the thousands of Northern Rock customers that have had unsecured debt turned into secured debt by their tactics.

If your property is jointly owned a creditor will not be able to obtain a CO against you, they can only get what is called a restriction.

The laws on Restrictions are totally different to Orders, the most important being there is NO OBLIGATION for you to pay any of the proceeds of the sale to the creditor.

However, during the whole court process you go through the reference from all parties (especially the creditor) will be to charging order and NOT to restriction. This is done in order to decieve you believing you are stuck with a CO.

However, not all solicitors are aware of the law in this regard and it is important that you raise this point with them in the first instance before proceeding with them

Quote:

Restriction

The restriction which can be entered on the register where a charging order is made against one of joint proprietors is in the following form :-
No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to [name of person with the benefit of the charging order] at [address for service], being the person with the benefit of /I]an interim[I /I]a final[I charging order on the beneficial
interest[/URL] of (name of judgment debtor) made by the (name of court) on (date) (Court reference.…).
You are therefore correct in saying that when the Land Registry receives an application to register, for example a transfer, we will not ask to see the consent of the person who has the benefit of the charging order. We will only want a certificate from the applicant for registration or his conveyancer that the person who has the benefit of the charging order has been given written notice of the transfer.

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

So I hope I have provided benefit to everyone who has had a restriction entered against them (especially NORTHERN ROCK CUSTOMERS) who believe wrongly that they are Charging Orders.

You now have the freedom to go and sell your houses with the knowledge that the vultures can do nothing

I also think this VERY IMPORTANT point needs highlighting by the moderators as many many people are stuck with houses that they believe they cannot sell

This original thread is dated 2009, it is now 2015.

Does the information given above regarding the fact its only a restriction still active in 2015 ?

I am up court 20th Feb 2015 for a charging order to be made on my property against MYSELF only but my mortgaged home is Jointly owned with my wife.

They have stated that my wife has "An Interest" in the property so basically have declared they know its jointly owned.

Any info or an update would be gratefully appreciated.

eggbox · 8 February 2015 at 10:11AM

Griff106

Yes everything is as relevant today as it was in 2009 when Blueback originally posted. I know this thread has become rather extended but that is an indication of more and more people having a CO made against them and trying to understand their position. But do read the thread as it will allay any fears you may have on what a creditor can do once they get a CO granted.

In simple terms; if a person is a sole owner of a property then a Charging Order is attached to the Land (property) itself as an "equitable" charge similar to a mortgage and is registered on the Deeds of the property. When the owner sells, this charge has to be settled in the same way a mortgage would be in order for the Land Registry to register any new owners details.

But if a CO is made against a joint owner of property (and they are the sole debtor); then the CO can only to be made against that persons "Beneficial Interest" (equity) in the property. It cannot be registered as an equitable charge against the Land and, because of this, the CO can only be notified by a "Restriction" on the Deeds of the property.

The Restriction acts as a notification telling anyone who searches the property Deeds that one of the owners has a CO registered against their Beneficial Interest. But the huge difference is that if the joint owners decide to sell, then only the terms of the Restriction have to be met in order to allow the LR to register new owner details. The overwhelming Restrictions used for the above are in Form K; all that is required to satisfy this type of Restriction is for the buyer to simply notify the LR that they have notified the Restriction holder that they they are purchasing the property.

Once the buyer has confirmed this, the Restriction becomes "overreached" and has to be removed. Crucially, there is no legal obligation placed on the seller to settle the CO, notified by the Restriction, at the point of sale. It is up to the creditor to request the funds from the house sale but they have no power to block a sale if the seller does not wish to pay at this point. As the Land Registry have confirmed; once the Restriction terms have been met it is no concern of theirs what happens between the creditor and debtor.

Unfortunately, Solicitors/Conveyancers seem to be the least able to understand the above and seem hell bent on giving away their clients money when they have no need to. But, if you read the thread, you will see their are ways around this if you are willing to be persistent.

wembley14 · 16 February 2015 at 9:37PM

Hi Eggbox and all,

In reply to your last post which reiterates BLUEBACKS original posting, I most point out that the restriction wording has moved on since then. The courts and the Land Registry now allows the
" EFFECTIVE RESTRICTION WORDING " which was stated in the document that BRIGHTONIAN puts down to him completing his sale free of restriction.

Post # 985 page 50, date 05/07/13.

I feel people should be aware that this website is no longer available but directs you to the law firm Blake Morgan who the author of the document works/worked for. No doubt Eggbox will have a copy of the said document " when is a charge not a charge."

It states that "a signed certificate is needed from the restrictioner when given notice of disposition at least 14 days prior"

This requisite prevented the registration of the new owners of my former property on the title deeds, this was due to the restrictioners refusing to give the said certificate. This contradicts the land registry's practice guide for over reaching when money is paid for full value. This apparently gave the creditor more security, even when they did not comply with restriction. The land registry practice guide states that a form K restriction should not prevent over reaching from taking place when compliance has taken place. Notification was given to restrictioners 2 months prior to sale. They(creditors) then failed to provide signed cert, therefore failing to comply to their own modified wording. Sellers must be aware. !!!

LRR may say that it depends on the specifics of the restrictions but it boiled down that they were still form K restrictions modified or not, and that they should not prevent over reaching from taking place when sold for full value to third party.

I must thank you all again especially EGGBOX for all your input as the restrictions have now been removed from my former property to allow registration for new owners, an amazing 9 months after sale. No thanks to buyers solicitors or Land Registry. Too much conflicting information, of which I have copies.

This was RESOLVED down to me making formal complaints to the creditors and their solicitors because of their illegal tactics used and unlawful adding of interest to original debt. They agreed to remove restrictions on the basis that I would retract my complaints and that I would not progress with any future complaints regarding restriction debt.

I have given up potential compensation surrounding their unlawful tactics because of not being able to get restrictions over reached, even though my solicitor and I endeavoured to comply but obviously not enough for the Land Registry.

Thanks and Good luck to you all.

eggbox · 16 February 2015 at 10:51PM

Hi Wembley

First of all I'm really glad you have (finally!) managed to resolve your sale at last. And many, many thanks for coming back to the board to report your success.

I also understand your frustrations over this matter as it does seem ridiculous a creditor can withhold confirmation to the LR of being notified of a sale, as the Restriction stated, when they clearly have been notified? I also agree with you that I don't understand why overreaching doesn't occur in this instance, as it does on a Standard Form K, when it's a sale for value to a third party?

But at least your persistence has paid off and it should give people the encouragement not to give up when faced with a similar situation!

Charging Order? The myth

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free