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  • FIRST POST
    blueback
    Charging Order? The myth
    • #1
    • 26th Jul 09, 11:28 AM
    Charging Order? The myth 26th Jul 09 at 11:28 AM
    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 [an interim] [a final] charging order on the beneficial interest 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
Page 176
  • Land Registry
    A couple if things to note based solely on the details posted. As I mentioned the devil is in the detail and you've already implied the exact details may not have been shared

    Applications to cancel restrictions will often be referred to one if our lawyers or a senior officer at the local office. Not quite as grand sounding as posted but still an indication as to how we have to treat such applications. As they are to cancel, and not withdraw, it's an application by someone adversely affected by the restriction so we have to be mindful of the risk in cancelling it.

    Secondly you refer to overreaching and the key point re a sale by two ir more people. If you were joint owners and one passed away then you have a sale by a single owner presumably. The order of events since may also impact of course.

    If you have completed then the buyer may have priority over their application to register a restriction anyway

    And if you have spoken at length with us already then those are the details to focus on from a registration perspective rather than my more general postings which are made without the precise 'detail'
    “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"
    • bonfire1966
    • By bonfire1966 4th Dec 17, 6:53 AM
    • 40 Posts
    • 12 Thanks
    bonfire1966
    A couple if things to note based solely on the details posted. As I mentioned the devil is in the detail and you've already implied the exact details may not have been shared

    Applications to cancel restrictions will often be referred to one if our lawyers or a senior officer at the local office. Not quite as grand sounding as posted but still an indication as to how we have to treat such applications. As they are to cancel, and not withdraw, it's an application by someone adversely affected by the restriction so we have to be mindful of the risk in cancelling it.

    Secondly you refer to overreaching and the key point re a sale by two ir more people. If you were joint owners and one passed away then you have a sale by a single owner presumably. The order of events since may also impact of course.

    If you have completed then the buyer may have priority over their application to register a restriction anyway

    And if you have spoken at length with us already then those are the details to focus on from a registration perspective rather than my more general postings which are made without the precise 'detail'
    Originally posted by Land Registry
    Thank you LR. So in this case "over reaching" will not apply as I am a single owner following my exs death??
    It is also my understanding that the application to reinstate the restriction was made before the buyer did the 'search of priority'
    Giving the creditor the priority. So the buyers solicitor surely must of seen this??
    Any thoughts?
  • Land Registry
    Thank you LR. So in this case "over reaching" will not apply as I am a single owner following my exs death??
    It is also my understanding that the application to reinstate the restriction was made before the buyer did the 'search of priority'
    Giving the creditor the priority. So the buyers solicitor surely must of seen this??
    Any thoughts?
    Originally posted by bonfire1966
    It would not be overreached in the automatic sense as you are now a sole registered owner so if the form K restriction were reinstated then it could hamper things on that score.

    I suspect, and as alluded to in earlier replies, you applied for the restriction to be cancelled based on the evidence mentioned. In such cases we cannot simply assume that the debtor's death has ended the creditor's interest so we should have served notice on the creditor. If they did not reply then we would remove the restriction. I assume your discussions with us to date have confirmed what happened.

    The solicitor's priority search result will indeed have revealed the pending application by the creditor to register a restriction.

    Wider general thoughts would suggest that the application for a restriction will have been referred to a lawyer/senior officer as before. And then you receive notice of their application and given time to object.

    That is where you are now at, despite the buyer completing, so it is your solicitor you must now rely on re any grounds for the objection. The law around such matters is very complex and we can't advise you on the law.

    The only general advice I can add, and which eggbox has often referred to here, is that much is likely to depend on what has happened to your ex's share in the legal/beneficial ownership.
    “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"
    • bonfire1966
    • By bonfire1966 4th Dec 17, 6:48 PM
    • 40 Posts
    • 12 Thanks
    bonfire1966
    It would not be overreached in the automatic sense as you are now a sole registered owner so if the form K restriction were reinstated then it could hamper things on that score.

    I suspect, and as alluded to in earlier replies, you applied for the restriction to be cancelled based on the evidence mentioned. In such cases we cannot simply assume that the debtor's death has ended the creditor's interest so we should have served notice on the creditor. If they did not reply then we would remove the restriction. I assume your discussions with us to date have confirmed what happened.

    The solicitor's priority search result will indeed have revealed the pending application by the creditor to register a restriction.

    Wider general thoughts would suggest that the application for a restriction will have been referred to a lawyer/senior officer as before. And then you receive notice of their application and given time to object.

    That is where you are now at, despite the buyer completing, so it is your solicitor you must now rely on re any grounds for the objection. The law around such matters is very complex and we can't advise you on the law.

    The only general advice I can add, and which eggbox has often referred to here, is that much is likely to depend on what has happened to your ex's share in the legal/beneficial ownership.
    Originally posted by Land Registry
    Spoke again to the land registry case worker named on the B141 he tells me that the creditor was never informed of my application to remove the restriction and it was removed purely on the information and evidence I provided.
    • eggbox
    • By eggbox 4th Dec 17, 9:51 PM
    • 1,335 Posts
    • 671 Thanks
    eggbox
    Spoke again to the land registry case worker named on the B141 he tells me that the creditor was never informed of my application to remove the restriction and it was removed purely on the information and evidence I provided.
    Originally posted by bonfire1966
    The question, therefore, seems to be whether or not the LR are able to cancel a Restriction without having to contact the Restriction holder?

    I suspect not but, at the very least, the creditor should at least expect to be informed why the Restriction is being cancelled?

    But as LRR agrees, the real issue will be where the debtors beneficial interest now lies? So if you receive the proceeds then I can't see how a Restriction can be re-registered on a property that doesn't contain the benficial interest the CO was made against?

    But on the issue of the "sole" owner sale not overreaching the Restriction, remember if the worst happens; you only have to add another (trustworthy) person to the deeds to reinstall joint owners which will allow overreaching to occur again when you sell the property.
    • Sparkles69
    • By Sparkles69 5th Dec 17, 1:37 PM
    • 19 Posts
    • 1 Thanks
    Sparkles69
    Sorry, Eggbox
    I realise that. What I meant was, because I included the debt in my bankruptcy after the charge was in place, if we sell the house and the charge is removed, does that mean because the debt was included in my bankruptcy, they would not be able to persue me after the house sale because the debt was in my bankruptcy? I hope that's clearer.
    Thanks, S69.
    • eggbox
    • By eggbox 5th Dec 17, 1:59 PM
    • 1,335 Posts
    • 671 Thanks
    eggbox
    You need to understand the Charge isn't removed by the sale of the property, only the Restriction which notifies that a CO exists is removed. The CO was made against the beneficial interest within the property so wherever that is after a sale the creditor can lay claim to it (hence the need to be sensible where you locate the released funds.)

    As pre existing Charging Orders take priority over any subsequent bankruptcy dealings, they can't be included in the bankruptcy order.

    You may have added it in with all other the debts but the fact the CO was made prior to the bankruptcy action; means it would not be included in the actual order. Therefore, the creditor can still pursue the debt if they so wish?
    • Sparkles69
    • By Sparkles69 7th Dec 17, 9:40 AM
    • 19 Posts
    • 1 Thanks
    Sparkles69
    Thank you for the clarification., so where would be best to put the equity, that would be legal?
    My ex business partner sold his house & nothing was paid. The creditor said. that if he has now gone bankrupt then they could not pursue him for the debt. Is that correct?
    Thanks, S69.
    Last edited by Sparkles69; 07-12-2017 at 9:43 AM.
    • eggbox
    • By eggbox 7th Dec 17, 5:35 PM
    • 1,335 Posts
    • 671 Thanks
    eggbox
    If the funds are placed in a joint account they can't, currently, be accessed by a creditor under a third party debt order, But you must understand the joint holder is, legally, entitled to the funds every bit as much as you are? So it must be someone you can trust if you go down that route?

    If (as I think you mean) your ex-partner had a Charging Order on his share of the debt prior to his bankruptcy; then the creditor can still pursue the debt. If the creditor thinks they can't that's their problem.

    However, the biggest obstacle (and the reason the creditor usually gives up) is the difficulty in finding out where the actual money they can lay claim to actually is?

    A Charging Order makes a legal judgement that a creditor can attach his debt to an asset the debtor owns or has an interest in (such as property) and is entitled to be repaid his debt from those proceeds when the asset is sold. If the debtor doesn't hand over the money, however, then its down to the creditor to put more effort (and expense) into pursuing the funds with no guarantee they will be succesful?
    • Sparkles69
    • By Sparkles69 8th Dec 17, 12:41 PM
    • 19 Posts
    • 1 Thanks
    Sparkles69
    The money's would be paid into a joint account with my wife, so I take it that would be ok?
    .Like you said if they believe that they can't pursue him, it's their fault.
    After the house sale, we would then rent for a minimum of 12 months before considering buying a new house & do it in a very discreet way.
    • eggbox
    • By eggbox 8th Dec 17, 12:48 PM
    • 1,335 Posts
    • 671 Thanks
    eggbox
    The money's would be paid into a joint account with my wife, so I take it that would be ok?
    .Like you said if they believe that they can't pursue him, it's their fault.
    After the house sale, we would then rent for a minimum of 12 months before considering buying a new house & do it in a very discreet way.
    Originally posted by Sparkles69
    Yes to the joint account.

    Buying any new property would expose you to potential come backs from the creditor if the amount is substantial? So you may want to consider whose name goes on the mortgage and titel deeds?
    • Sparkles69
    • By Sparkles69 12th Dec 17, 1:10 PM
    • 19 Posts
    • 1 Thanks
    Sparkles69
    Thanks, I understand that, but I don't think my wife would get a mortgage large enough, without my income. We now have enough information, I think to decide the best route to take for the family.
    Thank you, Eggbox for all the advice & merry Christmas too!
    Thanks, S69.
    • bonfire1966
    • By bonfire1966 19th Dec 17, 10:57 PM
    • 40 Posts
    • 12 Thanks
    bonfire1966
    Hi Eggbox.
    Just wanted to give you an update regarding my situation.
    Well I objected to the reinstatement of the restriction. Yesterday I received a letter from the land registry stating that they were unable to continue as they have requested clarification on some points that have been raised with creditors solicitor. In a nut shell they have given him until the middle of January to prove that the house has was never mine and that I have committed fraud. Lol. Well good luck with that one and if he proves it please can I have the £320000 back that I have just paid to the bank to clear the mortgage back as I could do with the cash. Forgive the sarcasm.
    Any how merry Chritmas and happy new year to you and everyone else on this forum.
    • eggbox
    • By eggbox 20th Dec 17, 1:05 PM
    • 1,335 Posts
    • 671 Thanks
    eggbox
    Hi Bonfire,

    Thanks for the update! So, I'm presuming you got the buyers cash through, then?

    If so it sounds like the Solicitor concerned won't be a happy bunny this Xmas? Shame.
    • bonfire1966
    • By bonfire1966 20th Dec 17, 1:17 PM
    • 40 Posts
    • 12 Thanks
    bonfire1966
    Hi Bonfire,

    Thanks for the update! So, I'm presuming you got the buyers cash through, then?

    If so it sounds like the Solicitor concerned won't be a happy bunny this Xmas? Shame.
    Originally posted by eggbox
    Yes you are correct. The house completed on the 1st and I received the funds a couple of days later.
    The land registry sent me a copy of the letter that they have sent to the solicitor. They have put him right on all the rubbish he was saying to me including that the house should not have come automatically to me following my exs death. They have said that if they don't here from him with evidence proving wrong doing on my part that the case will be closed.
    He certainly won't be a happy bunny but I know I will be this xmas.
    • eggbox
    • By eggbox 20th Dec 17, 2:07 PM
    • 1,335 Posts
    • 671 Thanks
    eggbox
    That's a good result!
    • DAKOTA45
    • By DAKOTA45 21st Dec 17, 9:05 AM
    • 498 Posts
    • 49 Thanks
    DAKOTA45
    Yes you are correct. The house completed on the 1st and I received the funds a couple of days later.
    The land registry sent me a copy of the letter that they have sent to the solicitor. They have put him right on all the rubbish he was saying to me including that the house should not have come automatically to me following my exs death. They have said that if they don't here from him with evidence proving wrong doing on my part that the case will be closed.
    He certainly won't be a happy bunny but I know I will be this xmas.
    Originally posted by bonfire1966
    Result!

    D45
    • DAKOTA45
    • By DAKOTA45 23rd Dec 17, 10:13 AM
    • 498 Posts
    • 49 Thanks
    DAKOTA45
    Dear All!!!8230;
    I just want to wish everyone a peaceful Christmas and a better New Year!!!8230;
    Especial thanks to Eggbox and Land Registry Representative for their invaluable advice at all times.
    I'm sure I speak for everybody when I say that we are so very grateful for all the help and support we have received in our hour of need.
    Good Luck everyone!
    Dakota 45 x
    • SassySaver88
    • By SassySaver88 10th Jan 18, 4:45 AM
    • 77 Posts
    • 96 Thanks
    SassySaver88
    Hi guys

    Its 4.30am here and cant sleep...
    We are so close to exchange its unreal.
    But a hiccup appeared yesterday we were not expecting...

    Apparently there is a restriction on the property with a finance company....
    Now our soictor said that she requested confirmation from the sellers solictor on 21st November that on completion the restriction would be paid and then dissolved, they would complete something called undertaking and the restriction would be removed.

    That was 2 months ago.

    Spoke to solictor yesterday who says that the sellers solictor is still waiting for a settlement figure...

    We have to be out our house by 31st..

    So my questions are...
    How hard is it to get a restriction cleared in a house sale?
    Where in the process is the asking for settlement figure?
    And is there anything I can do because this is been outstanding for 2 months and I feel like we are getting no where.

    Sellers are wanting to pay the debt on completion and our solictor says that she just needs confirmation from the finance company that thats ok
    Surely thats just a letter?

    Help needed...anyone
    • eggbox
    • By eggbox 12th Jan 18, 11:45 AM
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    • 671 Thanks
    eggbox
    For a Restriction to be removed from the deeds the terms of the Restriction have to be met. Most people who visit this site have a standard Form K Restriction registered on their deeds.

    As is explained on this site, all that is required for a Standard Form K Restriction to be removed is for the BUYER (or their Solicitor) to notify the Restriction holder that the house is being sold and then provide proof of that notification to the Land Registry. That's it.

    The transfer of the property, to the new buyers can proceed regardless of whether the creditor with the Restriction has been paid or not? This is because the Restriction will then become "overreached" and will autoatically be removed by the Land Registry.

    The only time this would not be the case is if the Restriction has been modified (which is rare but check anyway) or if the house was being transferred rather than being sold for value.

    Unfortunately, most Solicitors are woefully unaware of the difference between a charging order made against sole and jointly owned property (where a Restriction is registered)? So you may need to explain to them the above if it is only a Form K Registered?
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