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Public Guide 23A (CO) – Applications by a creditor for a restriction to protect a charging order made by a court

Updated: July 2012

Update

This edition of the guide replaces the October 2011 edition. Section 2 has been amended to clarify that some objections may not prevent completion of the restriction application, as explained in section 3.

Scope of this guide

This guide is intended to help people who may receive a Land Registry notice about a creditor’s application for a restriction to protect a charging order made by a court.

1 Introduction

This guide is intended to help people who may receive a Land Registry notice about a creditor’s application for a restriction to protect a charging order made by a court.

A restriction is an entry in the title register of a property that prevents Land Registry from registering certain transactions (such as a transfer or a mortgage) until the terms of the restriction have been complied with. For example, somebody’s consent may need to be obtained.

If you need more information about the application or why it has been made, please contact the applicant or their legal representative. Their details are in the notice we have sent you.

You may wish to object to the application. Our notice tells you how to do this and the date by which you have to do so.

If you do object, Land Registry will consider what you say. However, your objection may not be successful and we may still complete the application. This is because what you have said does not (as a matter of law) affect the applicant’s right to enter a restriction in your title register. In such a case, the registrar will have decided that your objection is 'groundless'. This means that if the application is otherwise in order, we must complete it.

2 Common reasons for objection

This guide attempts to answer some points that are often made in response to applications by creditors for a restriction to protect a charging order. The points in section 3 Points/answers are examples of some common objections which may not be successful, for the reasons given in the answers. If your objection raises one or more of these points, it may not affect the applicant’s right to apply for a restriction and the registrar may rule your objection groundless.

Please read this guide carefully before you reply to our notice. If you need legal advice please see a solicitor or other qualified legal adviser as soon as possible. Land Registry staff cannot give you legal advice. Possible sources of advice are:

  • a solicitor

  • a law centre

  • a Citizens Advice Bureau.

3 Points/answers

P1: This is my co-owner’s debt, not mine.

A1: If the debtor owns the property jointly with you, the court can still make a charging order affecting their share. The creditor has a right to protect this order by a restriction. The restriction entry makes it clear who is the debtor. The restriction does not affect your share.

P2: I didn’t know anything about the court case or the charging order.

A2: If you are the debtor and you did not know about the court proceedings you should contact the court office for more information. Once the order has been made it is unlikely that you can successfully object to the restriction. If your co-owner is the debtor, then the creditor will take them to court and not you. The creditor does not have to tell you about the court proceedings unless the court directs this.

P3: This is only an interim charging order, it is not a final order.

A3: Charging orders are made in two stages. The creditor can ask the court to make an interim charging order even if the debtor is not in court to defend the application. If the court makes an interim order, it will fix another hearing date (usually six to eight weeks later) when the parties can go to court. At this second hearing, the creditor will usually apply for a final charging order. If the debtor wishes to challenge this application they must go to court for the second hearing and put their arguments to the court. An interim charging order against a debtor’s share is valid until the court makes a later order to vary or cancel it. Until then, the creditor can protect it by a restriction.

P4: I have applied to the court to set aside the interim/final charging order.

A4: Any charging order against a debtor’s share is effective until the court makes a later order to vary or cancel it. Until then the creditor can protect it by a restriction.

P5: The creditor won’t answer my letters.

A5: You should contact the creditor and/or the court. Land Registry cannot help you. A charging order against a debtor’s share is effective unless the court makes a later order to vary or cancel it. Until then the creditor can protect it by a restriction.

P6: The creditor should not have applied for a charging order/has not followed the proper procedures.

A6: Land Registry cannot investigate either the creditor’s actions or the court process. You should contact the creditor and/or the court, or seek legal advice. A charging order against a debtor’s share is effective unless the court makes a later order to vary or cancel it. Until then the creditor can protect it by a restriction.

P7: I am paying/have offered to pay off the debt by instalments.

A7: So long as there is any money owing under an interim or final charging order, it remains effective (unless varied or cancelled by a later order) and the creditor can protect it by a restriction.

P8: I dispute the amount owed.

A8: Land Registry cannot investigate this. You should contact the creditor and/or the court if you dispute the amount. As long as some money is owed under the charging order then it is effective (unless varied or cancelled by a later order) and the creditor can protect it by a restriction.

P9: Will the restriction entry stop me from selling or mortgaging my property?

A9: Not necessarily. The restriction will not stop you from selling or mortgaging, provided that its terms are complied with (if they apply). It would however be up to a buyer or a lender to decide whether to proceed if there is a restriction on the register.

P10: The restriction may affect my credit history.

A10: It is the earlier money judgment which led to the charging order that may affect your credit rating, not the charging order itself or the restriction.

P11: Can I remove the restriction in the future if I do not object now?

A11: Yes. You should apply to Land Registry to cancel it, using form RX3*. To do this successfully you should apply only when:

  • the court cancels or varies the charging order so that it no longer affects your property, or

  • the court orders the cancellation of the restriction, or

  • you can prove that all money owed to the creditor has been paid in full, including any additional interest and costs. (In such a case, you could instead ask the creditor to apply to Land Registry to withdraw the restriction, using form RX4*.)

*Note: Forms RX3 and RX4 can be downloaded in English and Welsh from our website at www.landregistry.gov.uk or obtained by phoning Customer Support on 0844 892 1111 (0844 892 1122 for a Welsh-speaking service).

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