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Solicitor fails to pay off charge on sale

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Re: Solicitor fails to pay off charge on sale

Postby atticus » Mon May 30, 2016 2:50 pm

Why should it not, if that is what it takes to get the creditor paid?
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Re: Solicitor fails to pay off charge on sale

Postby dls » Tue May 31, 2016 8:38 pm

The charge remains valid. The purchaser bought subject to it. There is no good reason why it should not be enforceable.

No doubt in practice someone would pay up to avoid it, and then there would be an unseemly and expensive squabble about where the dust finally falls.
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Re: Solicitor fails to pay off charge on sale

Postby theycantdothat » Wed Jun 01, 2016 4:23 pm

dls wrote:The charge remains valid. The purchaser bought subject to it. There is no good reason why it should not be enforceable.


None of that is disputed.

In the real life case I referred to I doubt it will get to the stage where a court has to consider whether to make an order for sale. When I Iearned what had happened I asked myself this question: The bank expected to get its money when the property was sold, but since its expectation has not been fulfilled can it expect the court to take the view that the circumstances are such that it ought not to refuse an application for an order for sale?
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Re: Solicitor fails to pay off charge on sale

Postby atticus » Wed Jun 01, 2016 6:17 pm

A question to which you have now had answers!
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Re: Solicitor fails to pay off charge on sale

Postby theycantdothat » Wed Jun 01, 2016 6:22 pm

atticus wrote:A question to which you have now had answers!


No I have not!
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Re: Solicitor fails to pay off charge on sale

Postby atticus » Wed Jun 01, 2016 6:45 pm

Horses may be led to water ...
atticus wrote:Charging orders can be enforced by orders for sale.
dls wrote:The charge remains valid... There is no good reason why it should not be enforceable.
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Re: Solicitor fails to pay off charge on sale

Postby atticus » Wed Jun 01, 2016 6:51 pm

See also CPR 73 and PD 73.

One wonders what kind of restriction was entered on the register, if a dealing in the freehold title was registered.
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Re: Solicitor fails to pay off charge on sale

Postby theycantdothat » Thu Jun 02, 2016 8:32 am

atticus wrote:Horses may be led to water ...
atticus wrote:Charging orders can be enforced by orders for sale.
dls wrote:The charge remains valid... There is no good reason why it should not be enforceable.


I knew the above facts before I started this thread. They do not address the specific question I raised. I'll rephrase it.

There are a number of factors a court will take into account if asked to make an order for sale including: whether the debtor has funds to pay and is deliberately refusing to use them: whether the debt can be repaid in some other way; whether the property is a family home; what equity there is in the property. The main purpose of a charging order is to secure the debt with the intention that the creditor should at the very latest get paid when the property is sold. If the primary purpose were to allow the creditor to convert property to cash a charging order would come armed with a power of sale. The question is not whether the status of a charging order changes on the transfer of the property, but whether on an application for an order for sale the court should give special weight to the fact that the creditor has been kept out of his money.

It is a classic case of a court having to make a decision against one of two "innocent" parties. The new property owner will argue that he does not owe the creditor any money, that the position he finds himself in is none of his doing and that it would be wholly unreasonable to make an order for sale. The creditor will argue that the charging order was there on the register plain for the new owner or his conveyancer to see, that he should not be kept out of his money because the discharge of the debt was not dealt with on completion as it should have been and that if he is not granted an order for sale the same thing could happen again so that realisation of his security would once again be postponed.
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Re: Solicitor fails to pay off charge on sale

Postby Millbrook2 » Thu Jun 02, 2016 3:39 pm

What about the view that the existence of the charging order was reflected in the price so the buyer knew what they were letting themselves in for.
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Re: Solicitor fails to pay off charge on sale

Postby Smouldering Stoat » Thu Jun 02, 2016 4:21 pm

But they didn't. The purchaser expected the vendor to pay off the debts with the proceeds of sale and to clear the charge.
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