Charging Order? The myth

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  • Land_Registry
    Land_Registry Posts: 5,754
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    The PG76 and algorithm re sole ownership I linked you to in post #3111 explains that the creditor can register an Agreed or Unilateral Notice in these circumstances. The choice is theirs.

    As Wookiee501 posts a Unilateral Notice will remian in place until cancelled or withdrawn.

    If we receive no application to cancel or remove the UN then we would leave it on the register and take no further action.
    If they did apply to cancel or remove then we would notify the beneficiary of the UN and give them the opportunity to object as appropriate.

    eggbox - the option in this case is either an AN or a UN and whether it is a ICO or a FCO makes no difference as explained previously. The CO creates an equitable charge that can then be protected by either an AN or UN although in my experience it is normally a UN that is applied for and section 3.2 of PG 76 may help to understand

    However it is far more likely that the reason is one simply of process as IF the application is not made by or with the consent of the registered proprietor, an AN can only be entered if the registrar is satisfied as to the validity of the applicant’s claim.

    It follows that when application is made to enter an AN in respect of a CO we must be satisfied that the charging order affects the legal estate.

    Determining whether or not a CO imposed a charge on the legal estate may be complicated. A number of factors need to be considered, including the form of the order made, whether the property is held on trust for persons other than the registered proprietor(s) and whether the beneficial interests of joint proprietors are encumbered. The entries in the register will not generally give a conclusive answer to these questions but some entries, particularly restrictions, will give an indication. Even if we investigate the information that we hold in our files as to why a particular entry was made, we are still unlikely to be able to arrive at a conclusive answer.

    NZS1985 Overreaching - in a trust of land or strict settlement, overreaching takes place on sale, when the proceeds of sale are received by the trustees (of whom there must be at least two, or a trust corporation). The effect of this is that the equitable interests in the land arising under the trust are overreached. After overreaching, the beneficiaries cannot claim against the land: their only claim is against the proceeds of sale. The buyer is therefore protected.
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • Can anyone advise of a ball park time scale for a restriction to be removed once it has been paid?
  • Land_Registry
    Land_Registry Posts: 5,754
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    Rileybaby wrote: »
    Can anyone advise of a ball park time scale for a restriction to be removed once it has been paid?

    From purely a registration perspective such applications are normally considered within 7 working days of receipt. If in order then we would notify the beneficiary of the restriction of the application and give them 15 working days to object.
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • eggbox
    eggbox Posts: 1,763
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    From purely a registration perspective such applications are normally considered within 7 working days of receipt. If in order then we would notify the beneficiary of the restriction of the application and give them 15 working days to object.
    Hi LRR

    Thank you for the updates over the past couple of days.

    Can I ask a couple of questions to the answers you have given, please (and please correct me if I have anything wrong below!);

    1. In response to the Unilateral Notice question you say a CO places an equitable charge which, I understand, is against the beneficial interest of the debtor concerned. But in the case of a sole owner this can be registered on the deeds as a charge that has to be dealt with before a transfer of ownership can proceed (unlike a CO made against a joint owner/sole debtor where only a Restriction can be entered.) But from the information placed of the deeds of NZS1985 (who is a sole owner and assuming the FCO is accepted as legitimate) which was,

    iii) On section C of the title, the charges register, it says the following...

    6 (17.03.2009) UNILATERAL NOTICE in respect of Final Charging Order in
    the ******** County Court.
    NOTE: Copy filed.
    7 (17.03.2009) BENEFICIARY: Barclays Bank Plc of ********, **********
    **********

    would that type of registration prevent a transfer proceeding if a sale of the property was made (for monies) but Barclays objected to the Notice being removed? I'm just a little confused why it isn't registered as an equitable charge as you would normally see for a sole owner? Or is what is registered amounting to the same thing?

    2. For Rileybaby's answer regarding a Restriction's removal being objected to within 15 days can I ask;

    i) If no objection is received within 15 days is that the end of the matter or is the Restrictioner allowed to appeal after this time period has elapsed?

    ii) Can I ask if a Restrictioner not objecting ever happens (and if so is it a common or very rare occurance?)
  • Hmmm.. can I go off on a bit of a tangent, please? This may be one for LRR and relates to changes made in the rules for applying for an ICO…

    I came across this;

    From April 2016 the rules changed again the process of obtaining a charge.
    There are three key differences:-

    An application for a charging order with respect to a judgment made in the county court will need to be made to the County Court Money Claims Centre;

    Where an application is made to the County Court Money Claims Centre it will be determined by a Court Officer; and
    Where an application is to be determined by a Court Officer this will be an administrative action and a hearing will not be listed.

    Under the previous rules, applications were sent to the County Court where the judgment was made, and determined at a hearing by a district judge before the claimant and whichever other party who saw fit to attend. Under the new regime, if the County Court Money Claims Centre receives an objection to the application, the matter will be transferred to the local court of the judgment debtor and the process will essentially revert back to the old regime, whereby the application will be determined at a hearing by a district judge.


    Does this mean that if a creditor was to make the application at the wrong court, it would be refused… and if not, and it went to a full CO, would that CO still be valid?

    D45
  • eggbox
    eggbox Posts: 1,763
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    No, it's designed to cut down on the administration process. All applications go through the same process. It just means if a creditor makes an application and there is no objection from the debtor the Court personal can process the work.

    If the debtor objects, however, it goes before a Judge as was the case for all applications previously.
  • Land_Registry
    Land_Registry Posts: 5,754
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    edited 17 February 2017 at 1:38PM
    eggbox wrote: »
    Hi LRR

    Thank you for the updates over the past couple of days.

    Can I ask a couple of questions to the answers you have given, please (and please correct me if I have anything wrong below!);

    1. In response to the Unilateral Notice question you say a CO places an equitable charge which, I understand, is against the beneficial interest of the debtor concerned. But in the case of a sole owner this can be registered on the deeds as a charge that has to be dealt with before a transfer of ownership can proceed (unlike a CO made against a joint owner/sole debtor where only a Restriction can be entered.) But from the information placed of the deeds of NZS1985 (who is a sole owner and assuming the FCO is accepted as legitimate) which was,

    iii) On section C of the title, the charges register, it says the following...

    6 (17.03.2009) UNILATERAL NOTICE in respect of Final Charging Order in
    the ******** County Court.
    NOTE: Copy filed.
    7 (17.03.2009) BENEFICIARY: Barclays Bank Plc of ********, **********
    **********

    would that type of registration prevent a transfer proceeding if a sale of the property was made (for monies) but Barclays objected to the Notice being removed? I'm just a little confused why it isn't registered as an equitable charge as you would normally see for a sole owner? Or is what is registered amounting to the same thing?

    2. For Rileybaby's answer regarding a Restriction's removal being objected to within 15 days can I ask;

    i) If no objection is received within 15 days is that the end of the matter or is the Restrictioner allowed to appeal after this time period has elapsed?

    ii) Can I ask if a Restrictioner not objecting ever happens (and if so is it a common or very rare occurance?)

    eggbox - you say it has to be dealt with before a transfer of ownership can proceed. From a registration perspective it doesn't as we would simply leave it on the register. From a practical perspective though a buyer will want it removed

    The Unilateral Notice is protecting it as an equitable charge. They are the same thing. Pre 2002 it would have appeared as an EC. Post 2002 it is either an AN or UN with the UN being the most common.

    If the buyer lodged their Transfer and an application to cancel the UN then we would serve notice giving Barclays the option of objecting. We'd then have to consider any objection before deciding next steps. Any argument would be around the CO and its impact on the legal estate and every instance is treated on merit so we can't tell you what would or wouldn't work re an objection.

    If no objection is received that's it and the application would be completed a day or two later depending on workloads. PG37 explains the Objection process https://www.gov.uk/government/publications/objections-and-disputes-a-guide-to-land-registry-practice-and-procedures

    There are no hard and fast rules re object or not but they do and it's not rare but there are numerous interests protected by restrictions and not just COs. I suspect objections in the CO example are much rarer but that may well be simply because you never get to the notification/objection part of the process. Most are removed automatically through overreaching or the debt is cleared and the restrictioner either removes the restriction themselves or let the owner do it and of course don't then object
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • Land_Registry
    Land_Registry Posts: 5,754
    First Anniversary Name Dropper First Post
    Organisation Representative
    DAKOTA45 wrote: »
    Hmmm.. can I go off on a bit of a tangent, please? This may be one for LRR and relates to changes made in the rules for applying for an ICO…

    I came across this;

    From April 2016 the rules changed again the process of obtaining a charge.
    There are three key differences:-

    An application for a charging order with respect to a judgment made in the county court will need to be made to the County Court Money Claims Centre;

    Where an application is made to the County Court Money Claims Centre it will be determined by a Court Officer; and
    Where an application is to be determined by a Court Officer this will be an administrative action and a hearing will not be listed.

    Under the previous rules, applications were sent to the County Court where the judgment was made, and determined at a hearing by a district judge before the claimant and whichever other party who saw fit to attend. Under the new regime, if the County Court Money Claims Centre receives an objection to the application, the matter will be transferred to the local court of the judgment debtor and the process will essentially revert back to the old regime, whereby the application will be determined at a hearing by a district judge.


    Does this mean that if a creditor was to make the application at the wrong court, it would be refused… and if not, and it went to a full CO, would that CO still be valid?

    D45

    Not one for us I'm afraid as it relates to the court process so more likely one for eggbox or others

    We would deal with any application which was then made to protect the CO on the land register. If someone then argued it was invalid thereafter they would need to make that legal argument
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • DAKOTA45
    DAKOTA45 Posts: 592 Forumite
    eggbox wrote: »
    No, it's designed to cut down on the administration process. All applications go through the same process. It just means if a creditor makes an application and there is no objection from the debtor the Court personal can process the work.

    If the debtor objects, however, it goes before a Judge as was the case for all applications previously.

    I just wondered… the judgement creditor first made an application for an ICO in another court.

    Then the application was considered again, but this time at my home court…it was not verified by a Statement of Truth as the 1st application was.

    Crafty !!!!!!s produced the first app in court when I questioned the unsigned one…:(

    D45
  • I've paid off the debts and requested that the owners have them removed from the property so hopefully it should all be done and dusted in a couple of weeks. Thanks Land registry representative and eggbox
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