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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3653
Experience:  Solicitors 2 years plus PQE
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Please can someone advise how I'd put a charge on a

Resolved Question:

Hello,
Please can someone advise how I'd put a charge on a relatives property in telation to a loan to be repaid when their mortgage comes up for review in 2 years.
Submitted: 10 months ago.
Category: Law
Expert:  Alex J. replied 10 months ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Does the loan include interest or is it for a fixed sum? Does the relative consent to the charge? Kind regards AJ

Customer: replied 10 months ago.
Relative consents to the charge, please clarify what difference it would make if with of without interest
Expert:  Alex J. replied 10 months ago.

Hi, Thank you. If you charges interest you would potentially need a an "all monies charge" if you did not have interest it would be for a fixed sum. You have to bear in mind your charge will protect you in the event of bankruptcy (assuming there is equity in the property) but the bank will always take control over enforcing the charge and will be paid out first, before you are paid out. What you need as a starting point is a letter acknowledging the debt and granting security in consideration for "continuing forbearance" against call in the debt. If the property is registered and you have the consent of the land owner you can use the following document as a charge - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/543393/CH1.pdf - this is a very simple form charge, but as the bank has priority here then it does not matter so much that you do not have additional rights contained in a full drafted charge (for example additional powers when appointing a receiver) as the bank will likely always exercise their powers first.

Are there any joint owners of the property or any children under the age of 18 living in it?

Customer: replied 10 months ago.
No joint owners, there is a lodger that lives there. No interest being charged. Thank you for the link but it appears broken?
Expert:  Alex J. replied 10 months ago.

Hi thank you. If you type in "CH1 form" on google and the government website link is the one you can use. This contains the form of the charge. If the person giving the charge is prepared to consent to it then there should be no issues registering it. You must just make sure you have an underlying document describing the debt.

Customer: replied 10 months ago.
Perfect, is there a suitable template doc I can use online regarding what this underlying document describing the debt must contain? If not can to clarify what is needed to be detailed. Many thanks
Expert:  Alex J. replied 10 months ago.

Hi, Thank you. Looking at this form is good enough - https://www.lawontheweb.co.uk/law-shop/consumer-products/legal-documents/small-and-informal-loans/acknowledgement-of-debt - I would add to it the following sentence:

"In consideration of the Creditor (you) granting the Debtor continuing forbearance and agreeing not to demand repayment of the debt until the expiry of [X] years from the date of this Agreement, the Debtor hereby grants to the Creditor as continuing security for the debt a charge (in the form CH1) over the property [NAME PROPERTY] to be executed contemporaneously with this Agreement".

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