Restriction K - selling house ***Resolved Exchange going ahead***

[Madge67]

Hi everyone,

I’ve done some searching about both on Google and through past threads but I’m so confused.

 

Can I have some words of wisdom and experience please.

 

I have a restriction on our property deeds (interim charging order) placed in 2010, For an old debt which is in my name only. The property is in joint names.  I have been paying paying this off £100 a month since and there’s still a balance outstanding. It was shoosmiths who requested it. 
 

we have sold our house and this has now raised its ugly head.

 

I was under the impression that a restriction K means Jack and that the sale can go through with the only requirement is that shoosmiths are told once the ale has completed.

 

However, I’ve just been told my solicitor has contracted Alliance and Leicester about it (on 25/05) and (although this is only per the person taking the call, not the solicitor), they are waiting for a reply.

 

My solicitor is really dreadful at communicating with me but I’m waiting for her to call me back.

 

Can anyone advise where we stand re the restriction. I just want to know as much as I can before I speak with her and there’s so much conflicting around. 
 

For info - the wording on the title deeds is as follows: 

RESTRICTION: No disposition of the registered estate, other than a disposition by the proprietor of any registered charge registered before the entry of this restriction, is to be registered without a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to Alliance & Leicester Personal Finance Limited at care of Shoosmiths, The Lakes, Northampton NN4 7SH, being the person with the benefit of an interim charging order on the beneficial interest of…….. made by the Burton Upon Trent County Court on……
This register contains any charges and other mat

 

Thank you

Madge 

[dx100uk]

Your main issue is youve been blindly paying this when there was no court order to do? Hence The ICO they got.

 

what was the original ccj for? What credit type and how much was it for?

 

Dx

[Madge67]

Hi Dx 

 

Thank you  for your fast reply 

 

I’m not sure  I’ve  blindly been paying it, we came to an agreement after the Restriction was applied. It was a loan for about 20k which half has now been paid. 
 

This is more about the restriction causing issues with the house sale 

 

I just want to be totally clued up when I speak to the Sol tomorrow, if she bothers to call me back that is.

 

As far as I could see from other threads on here, the land registry are happy to transfer ownership as long as the debtor has been notified about the sale.

 

The restriction does not have to be removed beforehand (I.e the debt settled). But I think I need a reference/link to this so I can send it to the solicitor. 
 

thank you 

Madge 
 

 

[dx100uk]

No it's in the restriction wording .

 

All that should happen is the buyers sol should write to a&l, now Santander I believe? .

 

The restriction k is removed automatically by the transfer of deeds. It doesn't need paying, no one needs to be advised concerning it at all prior to the sale. 

 

Sadly most conveyancing solicitors are useless on restriction k's they think they are the same as a charging order 

 

By the way, you are employing them, you TELL them what to do 

 

Dx

[Madge67]

Great thank you so much Dx - fingers crossed she understands

 

thanks as well for reminding me she is working for me! Sometimes we forget this don’t we. 

 

5 CCJ's+restriction k's - been paying 2 after order of sale attempts - want to moved.. NDL say i must pay them all 1st? **RESOLVED - MOVED - NONE PAID** - Financial Legal Issues - Consumer Action Group

[Madge67]

Hi gtn 

I’ve been reading through your thread

5 CCJ's+restriction k's - been paying 2 after order of sale attempts - want to moved.. NDL say i must pay them all 1st? **RESOLVED - MOVED - NONE PAID** - Page 2 - Financial Legal Issues - Consumer Action Group

 

as we are in the same position as with a Restriction K and wanting to sell. It’s been very helpful so thank you. Only difference is, we have already sold and the sale is now held up due to the restriction raising its ugly head. 

 

I can see that you found invaluable info on the Gov U.K. website regarding jointly owned property and this is exactly what I have been looking for due to the conflicting advice surrounding this area. I would really like to send a link to my solicitor but can’t seem to find the info on gov U.K. website and wondered if you could point me in the right direction please. I’m determined this sale will go through without me having to pay this rent off 

 

thank you again 

Madge 
 

 

[Andyorch]

https://freeconveyancingadvice.co.uk/Q&A/sale-purchase/i-want-to-sell-my-jointly-owne

 

[Madge67]

Thank you so much Andy - this is a brilliant reference as well. 

[gtn]

Hi Madge67

 

I'm glad my thread helped.

The advice I got from the CAG forum was invaluable, hence I updated the thread once it had progressed post sale.

 

I don't have the link to hand but a Google search should show it. Like most .gov.uk website content it takes a bit of time to find what you need and there isn't really a shortcut to that. My advice would be to stick with it and use the wording below in the search engine. Here is the wording, which from memory I copied directly from the .gov.uk website updated on the 23/04/2021:

 

Jointly owned property

It is not possible to register a charging order as an ‘equitable charge’ on a jointly owned property unless all the owners / registered proprietors are judgment debtors. Where only one of the owners / registered proprietors is the judgment debtor, the order will be registered as a ‘restriction’.

A notice or restriction does not impose an obligation to make payment when the property is sold. 

In addition, in respect of the removal of restrictions the gov.uk website states:

 

3.7.1 Removal of restrictions

Restrictions may be removed from the register by:

·         being cancelled by ourselves if it is clear that it is superfluous (paragraph 5 of Schedule 4 to the Land Registration Act 2002)

We will cancel the restriction if we are satisfied that the restriction is no longer required. The application must be accompanied by evidence to show that this is the case.

Practice guide 76 charging orders shows that where joint proprietors are registered, and the charging order is not made against all the joint proprietors it is only possible to enter a Form K restriction and not a notice (charging order) on the legal estate.

In addition, practice guide 76 states: We will automatically cancel the Form K restriction once it has been complied with on registering a transfer of the registered estate for valuable consideration. We will assume that if the debt secured by the charging order has not been paid, your client’s interest will have come to an end with the postponement of the charged beneficial interest under section 29 of the Land Registration Act 2002.

 

The restriction K wording will be on the Land Registry documents, which your solicitor will have or you can download these for £3 from HM Land Registry. The wording will or should be like all restriction K wording. Ultimately it means the conveyancer has to give notice but there's nothing in the restriction K wording that stipulates a timeframe or that the debt has to settled from the proceeds of the sale. If your conveyancer or your buyers conveyancer says different then they are wrong. Ask them to show where the restriction K states this.

 

Here are my notes to my original conveyancer, but it's worth noting I had to change conveyancer to get this over the line.

 

1. There are Form K restrictions on the property title registered with HM Land Registry, and I note these are Form K restrictions not final charging orders or equitable charges.

 

2. I do not want there to be any contact with the beneficiaries of the restrictions until the notice required under the terms of the restrictions is issued. This notice can be issued on the day of completion and no notice period is required or timeframe stipulated or specified in relation to the notice and its issuance to comply with the restriction.

 

3. A Form K restriction is not listed in the charges register and is not a charge on the property.

 

4. As the property is jointly owned and the Form K restrictions are in a sole name, the restrictions are not final charging orders.

 

5. The restrictions are standard Form K restrictions and are not against the property title but against the sole interest in the proceeds of sale. The restrictions do not prevent the sale or transfer of the property.

 

6. A Form K restriction is only a means of notification of the property being sold, not an automatic right to payment or an obligation to pay from the sale proceeds. No date or timeframe is specified on the issuance of the notice to comply with the restriction.

 

7. The restrictions do not carry an obligation to pay any of the proceeds of sale. This is for me to negotiate settlement of.

 

8. The purchaser’s solicitor will require an undertaking from you as my conveyancer that the beneficiary of the restriction will be notified. The restrictions will be removed on completion of the purchase. It is important to note again that these are restrictions on the individuals proceeds of sale and not final charging orders against the property.

 

9. Under the terms of the restrictions on the title, HM Land Registry require a letter from you as our conveyancer confirming that the beneficiary of the restriction has been informed of the date of completion. This notice can be sent on the day we complete the sale as the restrictions do not make any stipulation on dates and time frames with regards the notice informing them. There is no 14-day notice stipulation, which is a common misunderstanding with regards title restrictions.

 

10. HM Land Registry will not ask to see the consent of the beneficiary of the restriction as they will receive a transfer notice from the purchasers once the sale is complete. The restrictions will no longer apply at that stage and will be removed by HM Land Registry as the property has transferred.

 

11. The purchaser’s conveyancer only needs to write (give notice) of transfer to the beneficiary of the restriction once their client has completed. At this point the restriction will be cancelled as the transfer is registered to the purchasers.

 

12. HM Land Registry has the notice of transfer and the notice that the beneficiary of the restrictions has been notified in accordance with the requirements of the restriction.

 

13. HM Land Registry will remove the restriction once the terms of the restriction, (written notice to the beneficiary as detailed in the restriction) have been met and the transfer is notified.

 

I hope that helps.

 

gtn

[Madge67]

Thank you GTN 

 

we heard last night that we are exchanging today. Our solicitor has done exactly what we instructed so we are obviously  thrilled. She did say that it’s not normally company policy to do it this way and they would normally redeem the debt so it really pays to get good advice (so thank you so much for this) and make it clear what you want the solicitor to do, if they won’t  comply find someone who will. 
 

again thank you so so much 

 

Madge 

 

[dx100uk]

 

well done Madge.

 

glad CAG could help.

 

you need to send a further letter to them of complaint when its all done as they are WRONGLY making debtors pay restriction k's!! and how much stress etc it caused you, please correctly inform your partners/workers!

 

dx

 

[Andyorch]

Well done Madge....tenacity wins through....dont always believe what main stream media spouts and lazy Solicitors advise ...Private land Parking are not fines they are speculative invoices ...DCA,s are not Bailiffs ...and Restriction Ks are not full Charging Orders 

 

Topic title updated

 

Andy.

 

 

.

[gtn]

Glad to hear you got it resolved. Good luck with the move.

 

[MJ31]

Hi Madge and others on this thread,

 

This is hugely interesting to me as we are on the other side of this situation at the moment with the purchase of a property about to fall through because the solicitors cannot agree on how to move forward.

 

The property we are attempting to purchase has 4 restrictions on it, we have been told by the sellers solicitor that the process you mentioned above in your post Madge is what they will be doing - serving notice to the creditors on completion. Our solicitor is saying this is too risky and we might end up not being able to take clear title as the creditors can submit an injunction, plus the debts become unsecured and we might have bailiffs visiting looking for the previous owner. So, they are refusing to exchange because of this issue, while the sellers solicitor is refusing to change their approach as I assume they do not want the restriction K's settled from the sale proceeds. 

 

I have asked my solicitor whether i can instruct them to go ahead anyway. They said no in a roundabout way. So, I am trying to find a solicitor who is willing to undertake this purchase based on those terms above. Can i ask who your solicitor was Madge?

Many thanks

 

[Madge67]

Oh no I’m sorry to hear you’re having these issues

 

 Of course - they were ‘Countrywide Conveyancing’ and the Solicitor was Helen Alkers. She did say it’s not normal company policy to go ahead with restrictions in place but she took my word for it and tbh I think they were trying to smooth over how cr3p they had been with their communication with us and their delays lol. 
 

worth a phone call though - let us know how you get on MJ 

 

regards 

Madge 

 

[dx100uk]

you wont get bailiffs or anything turning up at the old home

what utter BS. cant get judgement on restriction K's that will vanish upon sale and thus dont exist

 

go tell your sols to get their finger out and do as instructed or you go elsewhere !  MJ.

 

lots of useful threads here bar this one with all the details 

 

dx

 

 

 

[Andyorch]

Rather different when your selling with restrictions compared to when your buying with restrictions and any decent Solicitor will of course put your protection first ...there is very little the buyers Sol can do as the sellers Sol holds the cards and is prepared to proceed and inform judgment creditors.

 

Most restriction Ks will already subject to a County Court Judgment (CCJ) therefore it is possible to execute further by others means which would be incumbent on the seller...not the buyer.

 

Andy

[gtn]

We sold several months ago now and our buyer nor their conveyancer had any problems pre exchange or post sale.

 

As dx100uk says above, that was our experience.

 

As a seller though, we had to change our conveyancer, as the first one we contacted knew less than me.