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F E Smith
F E Smith, Advocate
Category: Property Law
Satisfied Customers: 10647
Experience:  I have been practising for 30 years.
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I obtained a judgement and a charge over a property to

Customer Question

Hi I obtained a judgement and a charge over a property to protect a debt and the resriction was put onto the title deed at land registery under the B register reading 02/02/2012 Restriction No Disposition of the registered estate other than a disposition by the proprietor of the registered charge registered before the entry of the restiction is to be registered with out a certificate signed by the applicant for the registration of their conveyancer that written notice of the disposition was given to Dawn Groom being the person with te benifet of a final charging order on the benifical interest of Mick Rodney made at slough county court on 17/01/2012. The property was sold on 19th April and the solicitors wrote to me on 1st May after the transaction had completed. This is not what should have happended can you advise?
Submitted: 9 months ago.
Category: Property Law
Expert:  F E Smith replied 9 months ago.

Presumably you are Dawn Groom.

They wrote to you after it completed and the restriction says that no disposition (sale) is to be registered unless you have been given notice. They have given you notice because they now want to register the sale. That is all the restriction does.

It doesn’t stop them selling the property.

What did you think it did and what you want to know about this?

Customer: replied 9 months ago.
Hi. I understand it does not restrict the sale but how can it protect the collection of the debt from the charge if the property was sold and I was told after? The debt should have been deducted from the proceeds prior to completion other wise what's the point of any charge ?
Expert:  F E Smith replied 9 months ago.

I’m afraid that an equitable charge doesn’t work like that. Only a legal charge works like.

You cannot have a legal charge when a property is jointly owned because it’s not possible to split the legal title.

The only way of protecting an equitable charge (a charge against one person’s interest in the jointly owned property) is by way of a restriction that gives you notice that the property has been sold. The idea is that you know the property has been sold and then you pursue the debtor.

I appreciate that it’s not the result you wanted but I’m afraid that’s what happens with the quotable charges.

What you might want to do is serve a Statutory Demand (assuming the amount of the debt is over £5000) with a view to making the debtor personally bankrupt. That usually focuses the debtor’s mind.

Customer: replied 9 months ago.
Hi Im affraid that i dont agree and the Judgement debtor i already bankrupt so cant do that. The judgement clearly states n the title deed what the restriction is for and who the debtor was. The solicitors should have in common sense terms informed me as the properietor of the charge before the sale completed to enable the debt to be kept secure and for me to prevent the sale to complete unless the debtor paid up. Other wise please explain what a a restriction is for ?
Expert:  F E Smith replied 9 months ago.

The restriction does exactly what it says. You have had notice of the sale.

There is no other way of securing an equitable charge. It is done by restriction. If the property wasn’t jointly owned, then the situation will be completely different. I don’t make the rules or the law, I just relay it.

I will opt out for another expert