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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 186
    • eggbox
    • By eggbox 16th Jul 18, 8:24 PM
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    eggbox
    As far as I can see, there is nothing to stop a transfer of the property to another person as long as the terms of the restriction have been complied with? The Restriction, however, will still remain on the deeds and will have to be dealt with by the new owner if they later sell the property.

    However, I think it might help if Land Registry Rep could confirm if this is correct when he runs an eye over the situation?
  • Land Registry
    As far as I can see, there is nothing to stop a transfer of the property to another person as long as the terms of the restriction have been complied with? The Restriction, however, will still remain on the deeds and will have to be dealt with by the new owner if they later sell the property.
    Originally posted by eggbox
    Correct - as the transfer is a 'gift' the restriction will need to be complied with as per it's wording and it will remain on the register

    If it is a form K restriction then it requires the conveyancer to certify that the named creditor has been notified. No consent is required.
    It's important to read and understand the wording of the restriction to understand how it may be complied with.
    Compliance does not then translate to it also being automatically cancelled in the example you have mentioned
    “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
    • By eggbox 17th Jul 18, 9:19 AM
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    eggbox
    If it is a form K restriction then it requires the conveyancer to certify that the named creditor has been notified. No consent is required.
    Originally posted by Land Registry
    Thanks, as ever, LRR for confirming.

    You may understand, however, why sellers get confused when, paid for, legal professionals are giving them the wrong advice regarding consent being required?

    I'm not too sure many other, comparable, professions would get away with the level of incompetence conveyancers continue to display?
  • Land Registry
    Thanks, as ever, LRR for confirming.

    You may understand, however, why sellers get confused when, paid for, legal professionals are giving them the wrong advice regarding consent being required?

    I'm not too sure many other, comparable, professions would get away with the level of incompetence conveyancers continue to display?
    Originally posted by eggbox
    I do understand and appreciate the confusion but we can all make mistakes, whether we are being paid or not. We don't always get it right ourselves at HM Land Registry

    As posted previously if advice received is confusing or seen as being wrong then the firm will have a process for referral/complaints and I would encourage those directly involved to raise it with the firm in that way. If nothing is done re specific examples then they will continue to 'get away with [it]' as nothing happens to change that view or educate them
    “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
    • By eggbox 17th Jul 18, 12:28 PM
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    eggbox
    I do understand and appreciate the confusion but we can all make mistakes, whether we are being paid or not. We don't always get it right ourselves at HM Land Registry
    Originally posted by Land Registry
    Of course; but I think their is a big difference between an honest mistake happening and incompetence occurring through a lack of professionalism in not checking the information you are supposed to know?


    As posted previously if advice received is confusing or seen as being wrong then the firm will have a process for referral/complaints and I would encourage those directly involved to raise it with the firm in that way. If nothing is done re specific examples then they will continue to 'get away with [it]' as nothing happens to change that view or educate them
    Originally posted by Land Registry
    I agree and if more people followed this advice I do believe it would make a difference as conveyancers would have to check the advice they give out.
    • mintminty59
    • By mintminty59 18th Jul 18, 10:32 AM
    • 20 Posts
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    mintminty59
    Eggbox , Cabot have added a load of charges onto the origonal debt and it is now £900 over what the charging order balance was and they are refusing to remove it unless I pay what they are demanding. They told me to just take them back to court which is going to cost me money and its adding huge delays to the mortgage completing. I am between a rock and a hard place and dont know what to do
    • eggbox
    • By eggbox 18th Jul 18, 10:51 AM
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    eggbox
    mintyminty59

    Unfortunately, anything to do with going to Court will cost you money? However, and I'll need some input from Land Registry Rep on this one; but have you got a copy of the CO the Court stated had to be paid? If you have, and can then also prove you have paid the creditor that amount owed; then the LR may be able to remove the charge? A creditor can only add charges to the debt that the Court has agreed such as interest? Any other charges the creditor has added are probably illegal so a call to the FCA on this would be your first step. Especially if Cabot won't explain what they are?
    • mintminty59
    • By mintminty59 18th Jul 18, 11:52 AM
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    mintminty59
    I dont have any of the court papers due to the age of this issue, however the clark in the court told me what the amount was awarded. At first it was thrown out apparently and they had to re apply. Ideally I would like to pay the court directly or instruct the solicitor to do so, thus giving me the proof its been paid and for LR to remove the charge.
    • eggbox
    • By eggbox 18th Jul 18, 12:02 PM
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    eggbox
    Ask the Court for a copy of what they are telling you the info from? Hopefully, LRR may have an opinion on how this could be handled?
  • Land Registry
    Ask the Court for a copy of what they are telling you the info from? Hopefully, LRR may have an opinion on how this could be handled?
    Originally posted by eggbox
    What we have on record is often limited to an application form and copy of the actual order.
    The register will normally confirm the basics re who the creditor is and the fact that it's a charging order but it won't quote any amount
    You can apply for a copy of the form/order by post but it reads as if you have the 'amount' details
    Last edited by Land Registry; 19-07-2018 at 2:20 PM.
    “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
    • By eggbox 19th Jul 18, 2:09 PM
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    eggbox
    What we have on record is often limited to an application form and copy of the actual order.
    Originally posted by Land Registry
    The order should show the amount the CO was granted for?
    Last edited by eggbox; 20-07-2018 at 9:17 AM.
    • mintminty59
    • By mintminty59 20th Jul 18, 12:38 AM
    • 20 Posts
    • 0 Thanks
    mintminty59
    I have the claim number , and my local court confirmed the amount , however the creditor on the actual register is no longer the owner of the debt as it has changed hands a few times since then. And I am assuming each time it has someone has added to the balance I claim I owe them. But the register has never been updated since. Its all confusing I know
    • sortingit1
    • By sortingit1 20th Jul 18, 12:44 AM
    • 2 Posts
    • 0 Thanks
    sortingit1
    post transfer
    So im currently mid divorce and its come to fruition my soon to be ex and I have several restriction interim orders ( type k I think looking at the wording) in both of our names over a number of years.

    Looking forward, there is approx £35k of debts and £35 k of equity in the house.

    So yes we could and probably clear the debt but houses are not selling too well at the moment in the area and the ex seems keen to drag it out.

    If it was transferred in to mine or my exs sole name as part of the divorce agreement , I understand that the charges (restrictions )stay with the deeds and the property , but if the house is then in one persons name instead of two, could the restrictions then be made final and the house forced to be sold anyway by one or more of the credit companies?

    Any advice appreciated.
    • eggbox
    • By eggbox 20th Jul 18, 9:24 AM
    • 1,363 Posts
    • 687 Thanks
    eggbox
    I have the claim number , and my local court confirmed the amount , however the creditor on the actual register is no longer the owner of the debt as it has changed hands a few times since then. And I am assuming each time it has someone has added to the balance I claim I owe them. But the register has never been updated since. Its all confusing I know
    Originally posted by mintminty59
    Anyone aquiring the debt can try to add "collection" charges, however, that cannot, legally, be added to the Charging Order amount unless included in the Order granted? The amount the Court has granted the Charging Order for is what you, legally, have to pay to discharge the order. Any other charges the creditor tries to claim should not restrict that happening.

    But understand DCA's don't care very much about what's legal or correct. If they can get away adding spurious charges they will.
    • eggbox
    • By eggbox 20th Jul 18, 9:39 AM
    • 1,363 Posts
    • 687 Thanks
    eggbox
    So im currently mid divorce and its come to fruition my soon to be ex and I have several restriction interim orders ( type k I think looking at the wording) in both of our names over a number of years.

    Looking forward, there is approx £35k of debts and £35 k of equity in the house.

    So yes we could and probably clear the debt but houses are not selling too well at the moment in the area and the ex seems keen to drag it out.

    If it was transferred in to mine or my exs sole name as part of the divorce agreement , I understand that the charges (restrictions )stay with the deeds and the property , but if the house is then in one persons name instead of two, could the restrictions then be made final and the house forced to be sold anyway by one or more of the credit companies?

    Any advice appreciated.
    Originally posted by sortingit1
    Technically, as a sole owner you become more vulnerable to creditors wanting to apply for an Order for Sale. In practice it wouldn't make any difference as the decision to grant an OFS is at the total discretion of the Judge on the day.

    As the property is your main residence a Judge won't grant an OFS unless the cisrcumstances are extreme. If the debts are for loans or credit card debt that won't be seen as extreme?

    The creditor, too, if they are a bank or DCA is unlikely to have any interest in pursuing an OFS as they know the extreme difficulty in obtaining them?
    • sortingit1
    • By sortingit1 20th Jul 18, 9:58 AM
    • 2 Posts
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    sortingit1
    Thanks eggbox.

    One more question , if we were to sell the equity in the property Wd be divided in half in theory.

    Now I believe the orders should be paid off in date order of who registered first . There are several "restrictions interims on there. - however there greater value of them in my exs name and most of them pre date mine.

    So the question is if we sell do they get paid off in order, hence my ex being debt free and I will have remaining debt or can I pay off mine with my part of my equity . Thanks in antipation again. Just trying to get my heard around it all.
    • eggbox
    • By eggbox 20th Jul 18, 10:30 AM
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    eggbox
    Sortingit1

    Unless there is anything to the contrary placed on the deeds then your equity will be split as you say. And, whilst you are also correct that the debts take priority by date order; the debts can only be paid from the equity of the debtor concerned.

    So each person's debts will be paid from each person's individual share of the equity in date order of registration on the deeds. So, for example, if your parter had the first registered debt for, say, £20k but only has £15k of equity; then £15k is all that creditor will receive and non of his other debts will be paid anything? The same applies to your debts.

    So each person only pays off their OWN debts, in order of the registration date, from their OWN share of the equity.

    Remember, too, that the debts won't disappear as they will still have the CCJ in force. But it's 99.99% certain they will be classed as uncollectible by the DCA concerned and will be , either, written off or passed to an even lower end DCA who has no chance of recovery unless you are daft enough to pay them.
    Last edited by eggbox; 20-07-2018 at 10:32 AM.
    • Rangers123
    • By Rangers123 2nd Aug 18, 5:18 PM
    • 24 Posts
    • 12 Thanks
    Rangers123
    eggbox it's an understanding of the law and what view you have as to how that law works.
    It's not a rule in my view that's being applied here in the context of this thread.

    And as you will appreciate the law itself can be subjective so you can get differing views, that's why you then have a judge as the arbiter.

    For example the issue of overreaching is our interpretation of the law hence 'A charging order affecting only the beneficial interests under a trust is liable to be overreached along with those interests by the operation of sections 2 and 27 of the Law of Property Act 1925' - so our interpretation of the LPA 1925

    And whilst I am not suggesting this is the case re the legal advice being given by the solicitor's referred to in the the thread a different view of the law may be taken. That may for example be a view that focuses on the Charging Orders Act and/or any legislation dealing with such debts and how they are satisfied and when.

    I suspect the real difficulty for some solicitors is how COs are dealt with differently and how those differences impact on jointly and solely owned properties. But it still comes back to the impact of the CO itself and how the law enables the creditor to realise the debt or the debtor to manage it where they own a property.

    The only way you will change a solicitor's view, in my opinion, is by challenging their interpretation of the law and convincing them to accept your interpretation - that's not a rule to be enforced but a matter of discussion/education and encouragement all of which this thread can help with, complaints to solicitor's and their firms when poster's views differ, and the SRA thereafter as appropriate.
    Originally posted by Land Registry
    Land Registry I am stuck. Nobody seems to know how we can transfer this title and my solicitor is now trying to have the restriction removed. There are 3 other owners and this is affecting the sale, and disadvantages them unfairly. Title number is DN82412. Even the Treasury Solicitor is not coming back to me with a solution. Any light you can shed would be appreciated.
    • eggbox
    • By eggbox 6th Aug 18, 8:42 AM
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    eggbox
    my solicitor is now trying to have the restriction removed
    Originally posted by Rangers123
    Hi Rangers123, how is your Solicitor attempting to remove the Restrictions?
  • Land Registry
    Land Registry I am stuck. Nobody seems to know how we can transfer this title and my solicitor is now trying to have the restriction removed. Title number is DN82412
    Originally posted by Rangers123
    I'll take a look and see what the issue(s) are and post a comment once I have those details
    “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"
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