Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • 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 192
    • eggbox
    • By eggbox 4th Nov 18, 4:42 PM
    • 1,380 Posts
    • 692 Thanks
    eggbox
    It means that as long as the original lenders loan remains in place, and only the mortgage product changes (for instance you switch from a variable rate to a fixed term rate with the same lender) then there is no problem as no, new, legal charge has been created.

    If, however, you want to switch to a mortgage product with a different lender then this will create an issue because of the restriction still being in place. This is because the original loan would have to be ended and a "new" charge would then be created by the new loan.

    The issue this causes is that charges (for loans or debts) on your deeds are dealt with in date order meaning that when a property is sold the first charge holder is paid off first. So mortgage lenders will only give you the loan if their charge is the first on the register.

    This is not only to ensure they are paid off first when the house is sold; it's also in order to retain "power of sale" which allows the first charge holder to, also, wipe all other charges off the register in the event the house has to be repossessed and sold.

    So switching to a new lender would mean the new loan created (or new legal charge) would be registered after the date of the restriction if the restriction is not paid off at the same time? Hence, a new lender wouldn't grant a loan under those conditions.
    • Moveslikeagger
    • By Moveslikeagger 4th Nov 18, 5:04 PM
    • 35 Posts
    • 13 Thanks
    Moveslikeagger
    Thank you so much for your response.. that makes sense. These forums are so wonderful for people like me who aren’t so clued up about these things and the language used! So I’m right in thinking sticking with my current mortgage provider and just getting a new fixed rate deal would be ok to do even with with a charging order. As this would just be an extension to my current payment plan??
    • eggbox
    • By eggbox 4th Nov 18, 5:50 PM
    • 1,380 Posts
    • 692 Thanks
    eggbox
    Yes you are and if you are told any different by your mortgage lender then come back here.
    • faye242
    • By faye242 5th Nov 18, 5:53 PM
    • 8 Posts
    • 0 Thanks
    faye242
    Hi LR/Eggbox,


    I was all happy and thought I had finished my quest...but apparently not... I am back for more advice!!


    I contacted the LR and posted a chq with an OC1 form(as recommended) I have had confirmation that the request was received on the 11/10 and the chq has been cashed early October. How long should it be before the information is sent out as we don't have it?


    This relates to a charge from Hitachi (I mentioned previously the court cant find any info and I have in my possession and email from Hitachi stating that 'due to passage of time they will write it off' - I believe this is code for they cant find anything either), would an email and an RX3 suffice to start the ball rolling from us? Hitachi claim they are sending in an RX4(?) but wont confirm it has been done and it hasn't been actioned on the title yet.


    We have still got the transfer hanging on this and I would love to just put it to bed!!


    (LR - the title is WYK25929 if you are able to look for me, obviously I totally understand if you cant/are not allowed)


    Thanks for any advice!! x x x
  • Land Registry
    Hi LR/Eggbox,


    I was all happy and thought I had finished my quest...but apparently not... I am back for more advice!!


    I contacted the LR and posted a chq with an OC1 form(as recommended) I have had confirmation that the request was received on the 11/10 and the chq has been cashed early October. How long should it be before the information is sent out as we don't have it?


    This relates to a charge from Hitachi (I mentioned previously the court cant find any info and I have in my possession and email from Hitachi stating that 'due to passage of time they will write it off' - I believe this is code for they cant find anything either), would an email and an RX3 suffice to start the ball rolling from us? Hitachi claim they are sending in an RX4(?) but wont confirm it has been done and it hasn't been actioned on the title yet.


    We have still got the transfer hanging on this and I would love to just put it to bed!!


    (LR - the title is WYK25929 if you are able to look for me, obviously I totally understand if you cant/are not allowed)


    Thanks for any advice!! x x x
    Originally posted by faye242
    Faye - OC requests are generally dealt with in a matter of days. If there's a delay then 7/10 working days at most. Not 3/4 weeks and silence.

    Looking at the record for that title it was processed in 17th Oct. if nothing received then complete our online contact form with the specific details and our support team will check and email you.
    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"
    • faye242
    • By faye242 6th Nov 18, 9:30 AM
    • 8 Posts
    • 0 Thanks
    faye242
    Hi LR,


    Thanks, I have already filled in the online form, we got a reply on the 28th stating


    Your application for an official copy of the court order was received on 11 October 2018, I have made a referral to the office copy section who should be in touch with you about the progress of this request.,


    But we still haven't heard anything via email or post, I just wanted to be sure this was normal. It would appear not if you say it was actioned on the 17th. I will refill it in and start again then.


    Can I reply to the email that we have been sent or should I start the online form again?


    Many thanks


    Faye
  • Land Registry
    Hi LR,


    Thanks, I have already filled in the online form, we got a reply on the 28th stating


    Your application for an official copy of the court order was received on 11 October 2018, I have made a referral to the office copy section who should be in touch with you about the progress of this request.,


    But we still haven't heard anything via email or post, I just wanted to be sure this was normal. It would appear not if you say it was actioned on the 17th. I will refill it in and start again then.


    Can I reply to the email that we have been sent or should I start the online form again?


    Many thanks


    Faye
    Originally posted by faye242
    Reply to the email received - seems odd that nothing has happened
    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"
    • hayz347
    • By hayz347 8th Nov 18, 6:52 PM
    • 9 Posts
    • 0 Thanks
    hayz347
    Help :(
    So scenario is......
    Went to sell home and was informed there was a judgement for a 19k debt in my name. Traced down where this debt stemmed from and contacted the court (it is a years old debt).
    Around 2 months ago I went to the court to fill out an affordability form with what I could repay.
    Heard nothing back.
    My partner has received a letter today saying a court order was issued on 31st October for an interim charging order. I have received no such letter and it is me who has the debt. I was also unaware of any court date.
    There is also mention on the letter of a form N379 being submitted it states:

    We enclose the following by way of service:
    1. Interim Charging Order in relation to the property; and
    2. Form N379 - Sealed application for charging order on land.

    I have been reading this thread and am very confused.

    Me and my partner have a 50/50 ownership of the home and we are completing on a property next week.
    Please can someone let me know where I stand and what the right steps to take are? I am under the impression from reading the thread that a charging order cannot be applied due to joint ownership and that it will be a restriction and that I have to let the creditor know and the debt will fall away? We do not want to loose our new home and fear that before completion another land registry search will show this order.
    This is an extremely old debt maybe 10 years or so old.
    HELP NEEDED
    • eggbox
    • By eggbox 8th Nov 18, 8:37 PM
    • 1,380 Posts
    • 692 Thanks
    eggbox
    hayz347

    Firstly, if you can stand the loss the, CO amount will be deducted from the sale proceeds when you sell the property. It won't prevent the sale on that basis. If you can't, or don't want to stand the loss then read on.......

    A Charging Order is always a Charging Order. But it's how the CO can be registered against a debtors asset where the difference lies. In the case of property if the debt is against a sole owner, or joint owners who are both responsible for the debt, then the CO can be registered on the deeds in the same manner as secured loan can be (like a mortgage for instance?) If the property is ever to be sold then the charge has to be dealt with before the property can be transferred to a new owner.

    However, if the debt is only against one of the joint owners; then current Land Registry rules only allow a Restriction to be placed on the property deeds. A Restriction notifies that a CO exists against one of the joint owners. If the house is to be sold then, if the Restriciton is a standard Form K as most are; then all that is required to comply with the Restriction terms (to allow the house to be transferred to a new owner) is for the buyer to i) notify the creditor the house is being sold and ii) to certify to the Land Registry that notification has been made to the creditor.

    The Good News
    If both solicitors agree, then the proceeds from the sale can pass to the seller without having to pay off the charging order. Once the new owners details are registered then the Restricton falls off the deeds as it has overreached by the buyers purchase for money. The Charging Order still exists, but the seller has the proceeds and can choose when of if he pays the creditor?

    The Bad News
    Through ignorance of the Land Registry rules; only a handful of Solicitors understand the limitations of a Form K Restriction. But sellers have sold on the above basis so never say never?

    With regard to the Interim CO the creditor isn't required to notify the debtor when it applies for an interim CO. Your partner has been notified as he has an interest in the property concerned. If you are deciding to pay off the debts then it will be any debts notified on your deeds on the day of completion that will have to be paid off.

    If you are planning not to settle the debts from the proceeds of the sale the you need to get your solicitor up to speed quickly!
    Last edited by eggbox; 08-11-2018 at 8:41 PM.
    • D_M_E
    • By D_M_E 8th Nov 18, 10:42 PM
    • 1,974 Posts
    • 67,752 Thanks
    D_M_E
    Eggbox - Hayz347 says it's her debt, but the interim order was sent to her husband so it would appear that the creditor has obtained 2 orders againt the property, one in each name, both for the same debt.
    Does this mean 2 K-restrictions have been registered?

    Is this correct and if so, how would this scenario unfold, and how and why would Form N379 relate to this?
    • hayz347
    • By hayz347 9th Nov 18, 7:47 AM
    • 9 Posts
    • 0 Thanks
    hayz347
    D_M_E & EGGBOX

    Thank you both for you replies very very helpful! I will review today.

    D_M_E - To clarify the letter reads "We understand you are the joint owner of xxxxx and as such we enclose the following by way of service:
    1. Interim Charging Order in relation to the property; and
    2. Form N379 - Sealed application for charging order on land.

    The debt is solely in my name

    Thanks Again - Any more advice greatly appreciated
    • hayz347
    • By hayz347 9th Nov 18, 10:09 AM
    • 9 Posts
    • 0 Thanks
    hayz347
    Also in relation to this part from eggbox

    If the house is to be sold then, if the Restriciton is a standard Form K as most are; then all that is required to comply with the Restriction terms (to allow the house to be transferred to a new owner) is for the buyer to i) notify the creditor the house is being sold and ii) to certify to the Land Registry that notification has been made to the creditor.
    Can my solicitor do this? i.e can my solicitor notify the creditor the house is being sold and certify to the land registry that this notification has been made? Rather than having the buyers solicitors do this? Also if my solicitor CAN do this do they need to inform the buyers solicitor?
    Last edited by hayz347; 09-11-2018 at 10:10 AM. Reason: Typo
    • D_M_E
    • By D_M_E 9th Nov 18, 11:24 AM
    • 1,974 Posts
    • 67,752 Thanks
    D_M_E
    Hayz347 - it is for the BUYER'S solicitor to tell the debt holder about the sale, not yours - this is what Eggbox has been banging on about many many times in this thread, and has been confirmed many times by others taking such action. This is all providing it's a Form K restriction, details of which have been posted by Land Registry one or two pages ago.

    Also, the notification by the BUYER'S solicitor can be made at any time up to the very last second before sale but is best done, I think, within a few days, but it is for the BUYER'S solicitor/conveyancer to this, NOT yours.

    You need to tell your solicitor this and get them to inform the other side.

    What I don't understand is, if the debt is yours and you already have a charging order in your name, then why has your husband ALSO got a charging order FOR THE SAME DEBT if he has no resposibility for it?
    • eggbox
    • By eggbox 9th Nov 18, 1:20 PM
    • 1,380 Posts
    • 692 Thanks
    eggbox
    What I don't understand is, if the debt is yours and you already have a charging order in your name, then why has your husband ALSO got a charging order FOR THE SAME DEBT if he has no resposibility for it?
    Originally posted by D_M_E
    hayz347 will, hopefully, clarify if this is not the case; but her husband wasn't having a charging order made against him (which wouldn't be possible anyway if he wasn't the debtor), she was stating her husband had received notification of her intended Interim Charging Order against herself?

    Joint Owners are notified as they are entitled to object to the order being made? It's a waste of time as Judges always grant the CO?

    But you are correct explaining to hayz347 that it is the buyers side that has to notify the creditor, with a Form K Restriction, as that is what is stated in the wording of the Restriction. As LRR has made clear, what is stating in the wording is what has to be followed to comply with the Restriction.
    • hayz347
    • By hayz347 9th Nov 18, 5:12 PM
    • 9 Posts
    • 0 Thanks
    hayz347
    DME & eggbox

    Top advice get it crystal clear now thank you! Onward and upwards as they say. Lets see where we go from here.

    hayz347 will, hopefully, clarify if this is not the case; but her husband wasn't having a charging order made against him (which wouldn't be possible anyway if he wasn't the debtor), she was stating her husband had received notification of her intended Interim Charging Order against herself?
    Above is spot on!

    Wondering If I make a call to the company enforcing this CO and explain the above. Offer to pay 10K upfront (not out of the house proceeds) and the remainder on a payment plan what they will say?
    • hayz347
    • By hayz347 9th Nov 18, 5:24 PM
    • 9 Posts
    • 0 Thanks
    hayz347
    Its also worth mentioning I done a land registry search today and the CO is not showing yet? The court order was on the 31st October.... I wonder if it will even show up before completion on Friday 16th?
    • D_M_E
    • By D_M_E 9th Nov 18, 6:04 PM
    • 1,974 Posts
    • 67,752 Thanks
    D_M_E
    Hayz347 - If it were me, would not make any contact with the company.

    Would make sure the buyer's solicitor/conveyancer knows they have to notify creditor - and certifies to LR that they have done so - then, if you feel like it, contact creditor AFTER sale completes and make any full and final offer which you feel comfortable with.

    Particularly if, as you say, there is no charging order as yet, but there could well be one in the offing.

    16th is only 7 days away so that does not give creditor much time to get their act together once notification has been sent by buyer's representative.

    That's what I would do, anyway.
    • eggbox
    • By eggbox 9th Nov 18, 7:11 PM
    • 1,380 Posts
    • 692 Thanks
    eggbox
    Its also worth mentioning I done a land registry search today and the CO is not showing yet? The court order was on the 31st October.... I wonder if it will even show up before completion on Friday 16th?
    Originally posted by hayz347
    I think we need to back up a little here and and clarify a few things things as I'm getting confused?

    You originally said you were notified you had a Judgement for a 19k debt that was around 10 years old? I'm assuming then that this was showing on your deeds as a Restriction, yes?

    What advice has your Solicitor given you regarding the Restriction and has your buyers solicitor mentioned anything about a Restriction?

    Certainly, don't contact the creditor until you have had chance to update us on those questions asked?
    • hayz347
    • By hayz347 12th Nov 18, 9:38 AM
    • 9 Posts
    • 0 Thanks
    hayz347
    I think we need to back up a little here and and clarify a few things things as I'm getting confused?

    You originally said you were notified you had a Judgement for a 19k debt that was around 10 years old? I'm assuming then that this was showing on your deeds as a Restriction, yes?

    What advice has your Solicitor given you regarding the Restriction and has your buyers solicitor mentioned anything about a Restriction?

    Certainly, don't contact the creditor until you have had chance to update us on those questions asked?
    Originally posted by eggbox
    I had a Judgement on my personal credit file .... not the house

    We only had the letter to my partner regarding the CO order late last week so have not informed any parties as yet.

    I have pulled the Title Register from the LR website on our property. Nothing is showing on there as yet in relation to this CO ..... wondering if it will even show up before 16th...

    Noted from DME & yourself re. contacting creditor
    • eggbox
    • By eggbox 12th Nov 18, 10:15 AM
    • 1,380 Posts
    • 692 Thanks
    eggbox
    I had a Judgement on my personal credit file .... not the house

    We only had the letter to my partner regarding the CO order late last week so have not informed any parties as yet.

    I have pulled the Title Register from the LR website on our property. Nothing is showing on there as yet in relation to this CO ..... wondering if it will even show up before 16th...

    Noted from DME & yourself re. contacting creditor
    Originally posted by hayz347
    Okay, that's a little clearer but I'm still a little unsure how the CCJ (County Court Judgement) has affected your sale?

    A CCJ should only remain as showing on your credit file for 6 years but it would only be your mortgage lender that this item would be a problem for in, possibly, refusing to grant you a new mortgage knowing you had "bad credit" through a credit file check? So is this what has happened as a CCJ won't block a sale proceeding, otherwise?

    Unfortunately, I do have to explain that you have, most probably, alerted the creditor into taking the Interim Charging Order action you have recently received? This was through contacting the Court to fill out an affordibility form as the Court would be obliged to notify the creditor of the details?

    It's unusual for Chargng Orders not to be sought very soon after the CCJ is obtained so is it possible you didn't own a house when the CCJ was obtained? Whether you did or didn't the creditor as now jumped back into action after a delay of years doing nothing? And I don't think that is a coincidence?
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,635Posts Today

8,010Users online

Martin's Twitter