Planning to Lend Some Money on a Mortgage? or Borrowing some to get the Property of your dreams in the UK? Make sure you go through the Financial Legal Laws. Wait, Do you already have any debts unpaid? and Receiving a Charge on a Property? Well, It is the Outcome.
What is a Charge on a Property?
To be definitive, A Charge on a Property is Collateral, A Legal document to turn an unsecured loan into a secured one. This is a Legal Agreement on the Property which you used to get the Loan. The Lender can secure the loan if you fail to repay it on time.
Let’s make you understand- Precisely, It is a financial claim against your Property which the Lender can do. Understand quickly – Imagine you took a loan to buy a Property and the One who provided you a Loan – Puts a Charge against you. So, Now the Home becomes Collateral, which means if you don’t pay the loan back, Legally your Home will get taken over.
Know: Can an Uninsured Driver Claim against Me UK?
How does the Charge on Property work?
Ofcourse, There is a Procedure that makes the Charges work, and cannot be done straightforwardly. So, Here is how the Creditors will go through a series of actions before actually claiming the recovery amount.
COUNTY COURT JUDGEMENTS – CCJ
The First step to follow the court hearing is the County Court Judgement. Creditors take a legal step to Secure the debt and reclaim what they owe.
INTERIM CHARGING ORDERS
After the First Step and once an Interim is issued. The Charge is applied at the Land Registry. An Interim order can possibly be sent without any court hearing. The Creditor will be able to get a share of the Profit received from the Sale of your Property.
FINAL CHARGING ORDER
After the Interim, The Debitor has 8-28 days to object and Prevent any further charges. Write to the Court and the Creditor, and Present Valid arguments and evidence. If you fail, You will get the Charge on a Property.
The Final Charging Order by the court gives the Creditor a legal interest in the Property. This order agrees on the Charges and helps to recover the money owed by the sale.
ORDER OF SALES
Once it is final the Creditor holds the Legal charge on your Home. If you fail to repay your Charging Order, This Unpaid debt will lead you to the Court Ordered Sale.
Regarding the Law-Section 100 of Transfer of Property Act 1882 – Charge on the Property when someone uses it as a security for repaying the money to the lender.
Types of Charges on a Property
There are different types of Charges that can be created on one’s Property. If you have a Charge applied due to the Unpaid debt, then it might be any type as listed below;
LEGAL CHARGE
This Legal Charge gives the Lender the right to sell the Property if the debt is unrecovered. It requires the Registration with the Registrar of Assurances.
FIXED CHARGE
Whenever a Property is placed as collateral for a Loan, This Legal Charge is applied. If the Holder has any interest in it, Then with a fixed charge, They are eligible to sell it to recover the debt.
EQUITABLE CHARGE
Unlike other charges, This does not give any authority to the Charge Holder to sell the Property. It is charged with a Mutual Agreement between the two Parties without any Registration.
FLOATING CHARGE
In case, the debt becomes due- remains unpaid, Then the Lender has the right to sell the Property. Until it is not due, No Permission is granted.
How to Find out if there is a Charge on my Property?
Not only because you left the debt unpaid, but Finding out if there is any charge on your Property is important If you have any idea of selling it. Because the charges may affect the sales and Value of your Home. There are various ways you can use to find out.
HM Land Registry
You can use the HM Land Registry- a UK Government Department, that registers Lands and Issue Property Ownership in England and Wales.
- On your Browser, Go to the GOV.UK and Click on the Deeds Search.
- You will get a list of Details appearing on your Screen.
- Click on Search now and Enter your Postcode to Find Out if there is any Charge on your Property.
- To use this service to Find, You will need to pay £3 via Credit or Debit card.
Local Authority Search
Get Connected to the Local Authority Search, Look over the Local records, scan the history, and get other in-depth details on your Registered Land.
Get help from Solicitors
Hire a Solicitor who can take the Legal stuff into their hands and get all the Important details. Obviously, There is a Price, a Solicitor’s Price can vary according to the Information you need, so make sure to get the best Legal Advice to proceed.
Read: Solicitors Letter
Online Tools and Services
There are numerous Online Platforms available to Check if there is any charge on your Property. However, These ways are not so effective but can be used as just the investigative process.
How to Remove a Charge on a Property?
I know that nobody would ever want to have a Charge that would lead to an Order of Sale. But if you are in the Same situation, Then we surely have some ways you can remove it and get back to your Place in time. In the UK, You can remove the charge concerned with the Mortgage or any secured debt by following these steps;
PAY OFF YOUR DEBT
First things First, Pay your Debt as soon as possible. Ensure to Contact your Creditor and Know Exactly how much money is yet to be paid.
CONTACT THE LAND REGISTRY
In order to remove the Charges on your Property, Consider contacting the UK Land Registry. Submit your Certification and Other needed documents. The Records are updated in the meantime when removal is done.
GET A SATISFACTION CERTIFICATE
You can request a Certificate of Satisfaction from the Creditor and confirm that the Debt is Paid Fully.
TAKE A LEGAL ASSISTANCE
Also, You can hire a Solicitor who specializes in Property transactions to go through your Process smoothly in UK Legal.
NOTIFICATION
Atlast, If you have cleared the Debt and still there is no update. Remember to notify the Lender and anybody related to officially remove the Charges from the records.
In Other ways, You can also try Negotiating with the Lender and Remove the Charge.
How much is the Property Charge UK?
The Charge on a Property UK often costs a fee that is between £50 and £200. Where if the Notice in case the land is to be mortgaged- The fee is out in the Lease. However, The fee may vary depending on the Value of your Property.
If you are the Lender, You can apply and Register for the Charge through the Official way;
- Complete the Application form.
- Certified Copy from CH1.
- And the Required Fee.
- For more details, You can visit the GOV.UK and get help.
Sadly, If you are the one in debt, then You will have to pay the full amount of the Debt. In Addition to that, The legal charges, Interest, and Other Charges.
Final Verdict
Understanding legal terms and what they mean is important at the right time. So, If you are a Creditor or a Debtor, You now know What is a Charge on a Property- which is really going to be helpful. Make sure that you do not get into trouble with no Information, Whether you are lending or borrowing money. This is something that you should know.