Second charge on a property, now for sale

[MyNameIsUrl]

I have a second charge on the home of a former associate. The house is now for sale.

Do I need to take action to protect my interests, or will the solicitor handling the sale contact me in the same way that he will contact the first charge holder (a bank). What if the owner tells his solicitor that I’ve moved abroad or died?

[maximan]

I have a second charge on the home of a former associate. The house is now for sale.

Do I need to take action to protect my interests, or will the solicitor handling the sale contact me in the same way that he will contact the first charge holder (a bank). What if the owner tells his solicitor that I’ve moved abroad or died?

Hi
Did you register your second charge?
When I looked into this situation many years ago if a charge was registered the purchaser would not get title until the charge was removed.
I'm sure the legal experts on the board will give you chapter and verse.
Good luck.

[Clitheroekid]

The first thing you need to be 100% sure of is that the charge is registered against the property at the Land Registry. Assuming you used a solicitor when the charge was created it certainly should be, but you need to make sure.

If it is, then the property can't be sold without the seller’s solicitor giving the buyer's solicitor an undertaking to have the charge removed from the title. Obviously, it can only be removed if you agree to it, and you wouldn't do so unless you'd been paid in full.

Consequently, once a sale is agreed the solicitor will download a copy of the title, see your charge, and write to you at the address you've given the Land Registry for contact. You should therefore check that the address on the title is the same as your current address, and if it's not you should have it updated.

The solicitor will request a `redemption figure' from you - i.e. how much you need to be paid to release the charge - and you will receive that sum on completion of the sale.

You will also have to sign a Land Registry form of release, but this will probably be provided by the solicitor.

Most legal charges provide that any legal costs you incur in redeeming the charge will be paid by the borrower, so you could probably instruct a solicitor at their expense if you wanted to do so.

[MyNameIsUrl]

The first thing you need to be 100% sure of is that the charge is registered against the property at the Land Registry. Assuming you used a solicitor when the charge was created it certainly should be, but you need to make sure.

If it is, then the property can't be sold without the seller’s solicitor giving the buyer's solicitor an undertaking to have the charge removed from the title. Obviously, it can only be removed if you agree to it, and you wouldn't do so unless you'd been paid in full.

Consequently, once a sale is agreed the solicitor will download a copy of the title, see your charge, and write to you at the address you've given the Land Registry for contact. You should therefore check that the address on the title is the same as your current address, and if it's not you should have it updated.

The solicitor will request a `redemption figure' from you - i.e. how much you need to be paid to release the charge - and you will receive that sum on completion of the sale.

You will also have to sign a Land Registry form of release, but this will probably be provided by the solicitor.

Most legal charges provide that any legal costs you incur in redeeming the charge will be paid by the borrower, so you could probably instruct a solicitor at their expense if you wanted to do so.

Thanks, I’ve downloaded a copy of the Title and confirmed my name is in the Charges Register.

What evidence do I need to provide a redemption figure? There are several unpaid debts, and although I have good financial records, the contractual relationships between me and the property owner were not as strong as they should have been (which is why, after discussions with a solicitor, I thought suing him was too risky).

Shall I provide details of every debt, or just an overall total, in the expectation of ‘horse-trading’? Or provide something more realistic? You say the charge ‘can only be removed if you agree to it, and you wouldn't do so unless you'd been paid in full’ but there is likely to be a fundamental disagreement about what the total amount is.

[Raptor]

The first thing you need to be 100% sure of is that the charge is registered against the property at the Land Registry. Assuming you used a solicitor when the charge was created it certainly should be, but you need to make sure.

If it is, then the property can't be sold without the seller’s solicitor giving the buyer's solicitor an undertaking to have the charge removed from the title. Obviously, it can only be removed if you agree to it, and you wouldn't do so unless you'd been paid in full.

Consequently, once a sale is agreed the solicitor will download a copy of the title, see your charge, and write to you at the address you've given the Land Registry for contact. You should therefore check that the address on the title is the same as your current address, and if it's not you should have it updated.

The solicitor will request a `redemption figure' from you - i.e. how much you need to be paid to release the charge - and you will receive that sum on completion of the sale.

You will also have to sign a Land Registry form of release, but this will probably be provided by the solicitor.

Most legal charges provide that any legal costs you incur in redeeming the charge will be paid by the borrower, so you could probably instruct a solicitor at their expense if you wanted to do so.

Thanks, I’ve downloaded a copy of the Title and confirmed my name is in the Charges Register.

What evidence do I need to provide a redemption figure? There are several unpaid debts, and although I have good financial records, the contractual relationships between me and the property owner were not as strong as they should have been (which is why, after discussions with a solicitor, I thought suing him was too risky).

Shall I provide details of every debt, or just an overall total, in the expectation of ‘horse-trading’? Or provide something more realistic? You say the charge ‘can only be removed if you agree to it, and you wouldn't do so unless you'd been paid in full’ but there is likely to be a fundamental disagreement about what the total amount is.

Been a while since I dealt with 2nd charge on property, but the one thing I do remember is that there were many different types of charge. The wording of the 2nd charge was paramount in deciding what needed to be done. For instance, one was a family member "lent" them the deposit and the wording was that on sale it needed to be repaid with a given interest rate. Another was that at sale they would get 25% of the sale price as they had paid 25% for the house at purchase. As they say "the devil is in the detail".

Raptor.

[MyNameIsUrl]

Been a while since I dealt with 2nd charge on property, but the one thing I do remember is that there were many different types of charge. The wording of the 2nd charge was paramount in deciding what needed to be done. For instance, one was a family member "lent" them the deposit and the wording was that on sale it needed to be repaid with a given interest rate. Another was that at sale they would get 25% of the sale price as they had paid 25% for the house at purchase. As they say "the devil is in the detail".
Raptor.

Surprisingly there are no details – my name is shown with the bank’s under ‘Lender(s)’, and then in the Charges Register there is a date in 2005, the word ‘Proprietor’, and my name and address. There does seem to be scope for disagreement.

[Clitheroekid]

Surprisingly there are no details – my name is shown with the bank’s under ‘Lender(s)’, and then in the Charges Register there is a date in 2005, the word ‘Proprietor’, and my name and address. There does seem to be scope for disagreement.

That's just the Land Registry entry, which simply provides notification to third parties that there is a charge on the property.

You must obtain a copy of the charge itself, which will provide details of how the debt and redemption figure is to be calculated.

If you refuse to release the charge when you've been offered the correct amount you can be sued by the property owner, but if you aren't able to calculate the correct amount you have a problem.

The fact that there's a potential issue as to what's payable reinforces my advice to get a solicitor to deal with it.