Need to sell house but interm charging order showing on land registry

[Budsmum]

First of all thanks for reading

 

We need to sell or remortgage our house as son is disabled and we need to either make adaptations or move to a bungalow.

 

We bought the house 7 years ago but had debt in the past and just after we bought the house we were chased heavily and they got a ccj against us. They put an interm charging order on the property 3 years ago. I am not aware of any final order had been made and they have not communicated with us since.

 

I have obtained a copy of land registry and it sates the following :

Equitable charge created by an interm charging order of the xxxxxxx county court dated xxxxxx in favour of xxxxx. Court reference xxxxxxx

 

What does this mean? If we sell do we loose all equity? If we remortgage will the money pass to them?

[unclebulgaria67]

I think any Solicitor helping you with the sale transaction is supposed to note the charging order and to consult you about dealing with it.

 

 

Don't think with an interim charging order, they are legally obliged to pay the charging order, but of course the sale of the house will be registered with land registry, therefore alerting the creditors. If you are buying other property in the UK they will come after you.

 

Best advice would be to speak to someone legally qualified to offer legal/debt advice. They will need to understand your full situation with details of finances, what debts you have, income etc. it may be the case that you need to speak to the creditors and come to some arrangement to make regular payments to them. Therefore they don't come after you for selling the house. Or perhaps the charging order can be secured against any new property ?

[mercyblue]

There is no need to register a final order after an interim order has been registered. A hearing is set for the final order when the interim order is granted so I highly doubt there wasn't a final hearing.

You will need to pay the charging order off at the time of sale (or before of course) otherwise the sale will fail.

As for securing the charge against a new property you would still need to pay off the original order to provide the free title required by the buyer so the creditor would have already been paid.

Its probably not what you want to hear but its better than agreeing a sale just to see it fail when the buyer does the searches

[unclebulgaria67]

Thanks for the correction. I had in my mind that there were charging orders, where the sale would not be prevented. Does it depend on when the charging order was done, as there was a change to law in October 2012 ?

[Budsmum]

Oh god , we have only about 40k in equity and the co is for 100k . They refused every offer of a payment arrangement.

 

Is there any way around this?

 

Can they force the sale if equity reaches co amount?

[unclebulgaria67]

They can make an application to a court, as the only way of gaining payment of their debt.

 

Have you enquired locally about help with cost of adaptions to your home ?

I thought there was money available to help with this.

[unclebulgaria67]

You can apply for funding re adaptions to home.

 

https://www.moneyadviceservice.org.uk/en/articles/funding-to-adapt-your-home-for-accessibility

[Budsmum]

It's limited, as we "have money " as in equity in the house we are expected to fund it ourselves as technically the ltv is showing up as circa 50:50 but it is a shared ownership property and the HA own the majority of the equity with a preceding charge on the property

[Budsmum]

Ss will provide a loan to cover the cost of adaptions with the interest rate quite high. The best scenario for us would have been to move to a much cheaper 2 bed bungalow as we would not have been in debt and would be way more affordable on 1 wage

[unclebulgaria67]

It's limited, as we "have money " as in equity in the house we are expected to fund it ourselves as technically the ltv is showing up as circa 50:50 but it is a shared ownership property and the HA own the majority of the equity with a preceding charge on the property

 

You don't own any equity technically. You can evidence negative equity at the moment because of the charging order.

 

Because it is shared ownership, you would probably need to speak to the HA about adaptions to the home.

 

Very difficult situation and i think you need advice from someone that deals with these issues.

[Budsmum]

I will try and see if we can get a solicitor the bungalow would also have removed the HA stake in the property

[unclebulgaria67]

I just wonder whether it makes any sense to keep the house, if the charging order means £60k of negative equity. How long would it take for this to move into positive territory.

 

If the house was repossessed, no doubt the local authority would have some responsibility to provide suitable housing or pay housing benefits to assist.

 

Don't know what to suggest, other than speak to Money Advice Service or local Citizens Advice to see what they suggest. You need to work out the best way forward, after collecting all information.

[mercyblue]

Thanks for the correction. I had in my mind that there were charging orders, where the sale would not be prevented. Does it depend on when the charging order was done, as there was a change to law in October 2012 ?

Oct 2012 did change certain things it actually made it easier to obtain a charging order. Basically if the ccj was after that date even if you were up to date on repaying the ccj they could still obtain a charging order.

Now the fact that an HA is involved massively complicates things. Did the creditor inform the HA of applying for an order?

[Budsmum]

I don't know, I presume they didn't as the HA didn't contact us

[Budsmum]

Our borough council are tough and they have been known to deem repossessions as volunteerly homeless. I work in housing and I have seen it. The fact that our son is now registered disabled but our mortgage is affordable and if we give up work to care for ds, as he attends mainstream school with support, it won't look good for us

[citizenB]

Oh god , we have only about 40k in equity and the co is for 100k . They refused every offer of a payment arrangement.

 

Is there any way around this?

 

Can they force the sale if equity reaches co amount?

 

I am not sure they can refuse offers of payment to reduce the outstanding debt ? That might be a question you want raise with someone like National Debtline ?

 

Do you know if interest is accruing on the debt ?

 

Can you give us a bit of history of how the C/O came about ?

[Budsmum]

The co came about due to an overseas property that was repossessed. The bank sold the property for next to nothing.

 

I honestly do not know if there is interest accruing.

 

When we filled in the court paper work we even made a repayment offer which was rejected

 

We initially thought it was out of jurisdiction but it's not as within the EU

[citizenB]

I think you do need to establish if interest in accruing. I will flag your thread for site team to see if they can offer any advice.

[citizenB]

Is this a joint debt or in one name only ?

[Budsmum]

It's a joint debt

[citizenB]

Ouch ..

[unclebulgaria67]

Sound like selling the house is not an option. Either try to have adaptions done to make it liveable or rent it out, then rent another property elsewhere which is more suitable.

 

Hopefully in the years to come the house price would have increased and you are in a better position.

 

But get some legal advice about the situation.

[Peterbard]

Yes just wondering that myself CB.

 

Bur I think more importantly is that the property is if I read the thread right jointly owned with the HA, initially this would only warrant a restriction on the account as the other parties rights to sell have to be preserved. I dont know if the situation has changed recently, but there used to be no barrier in a restriction to sale nor did any of the equity raised have to be paid to the third party.

 

Guessing but this may be a reason why this is only recorded as a interim order by the registry.

[caro]

Sound like selling the house is not an option. Either try to have adaptions done to make it liveable or rent it out, then rent another property elsewhere which is more suitable.

 

Hopefully in the years to come the house price would have increased and you are in a better position.

 

But get some legal advice about the situation.

 

You'd need to check with the HA if you could rent out, and I would think, your mortgage provider.

[Peterbard]

http://beatmydebt.com/self-help-guides-resources/charging-orders/charging-orders-on-jointly-owned-property

 

Could a Restriction ever prevent the sale of a property?

 

The only way a Restriction could prevent the sale of a property is if the wording of a Standard Restriction is changed. The standard Restriction is based upon the wording in what is known as the Land Registry’s form “K”.

 

However to achieve wording different to that in form K the creditor would have to persuade the Land Registry or the courts to allow a more effectively worded restriction.

 

Each application to change a Restriction’s wording would be treated on its merits when it is actually submitted to the Land Registry. However it is extremely unlikely that the Restriction would be allowed to be registered stating anything other than a standard Form K in the overwhelming majority of cases. This is because the rights of the joint owner, not affected by the Charging Order, have to be taken into consideration and their right to sell the property unhindered.

 

 

 

How to sell a jointly owned property if there is a charging order against it

 

If you believe you have a Charging Order against your jointly owned property and a Standard Restriction has been registered at the Land Registry it will be important for you to explain this to any solicitor you are using for your sale at the beginning to ensure that they understand it.

 

After the sale is completed the new buyers’ solicitor must write to the creditor who owns the standard restriction informing them that the buyer now owns the property. They can then simply confirm to the Land Registry that they have given that notice to the creditor and that the Land Registry should transfer the interest in the property to the new owner.

 

The land registry will not ask to see the consent of the creditor who has the benefit of the Restriction. They will only want confirmation from the new owner’s solicitor that the creditor who has the benefit of the Restriction has been given written notice of the transfer as above.

 

The interests of the new purchaser will overturn the Restriction and it is automatically removed from the property. The creditor will receive a letter from the Land Registry confirming that a sale has already taken place. This will happen typically a week or two after the sale so there is little they can do to get the debt paid.

 

BMD Tip: Not all solicitors are aware of this area of the law. It was only established in 2003 under the Land Registry Act of 2002. As such there is a danger that your solicitor would go ahead and repay your creditor anyway unless they are made aware that they should not do this and investigate the matter further.