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Ask Adam
What question have you always wanted to ask about our processes? Or what puzzling aspect of land registration have you just encountered in an application? Customer Policy Manager Adam Hookway is here to provide the answers.so please send us your questions for him.
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Brian Johnson, Birchall Blackburn Law Solicitors: This is based on a live matter from the entries in the B Proprietorship Register.
Mr. A and Miss. B are, as from 2008, the unmarried joint owners of the property and hold as "joint tenants" because there is no Form A restriction.
Several years after being registered as the owners of the property, a standard Form K restriction is reregistered, in 2017, against Miss. B in respect of an interim charging order made against her.
Miss B dies in 2023.
Mr. A now wishes to sell the property in 2024.
It is recognised that an "interim charging order" severs a joint tenancy so that the property would have been held by Mr. A and Miss B as tenants in common in equal shares.
Which of the following scenarios is correct for Mr. A to sell the property:
(1) - As the interim charging order severed the joint tenancy, Mr. A will have to appoint an additional trustee to act with him in the sale so that the Buyer obtains a good receipt for the purchase money.
(2) - Despite the severance of the joint tenancy, there is no Form A restriction as the creditor with the benefit of the interim charging order failed to apply for a Form A simultaneously with his Form K. Consequently, Mr. A can sell the property on his own - survivorship applying - so no need to appoint an additional trustee and because the sale will be for valuable consideration the Land Registry will automatically remove the Form K once the buyer's solicitors comply with its terms namely written notice to the creditor and certificate to the Land Registry.
Adam: Charging orders and how they are protected on the register by way of a form K restriction can often trigger discussion. Your question is an interesting one and the answer really lies in a mix of your two scenarios.
When a creditor applies to protect their interest by way of a form K restriction there is no requirement for them to apply for a form A restriction. The register is not definitive as to how joint owners hold the property and we don’t refer on the register to their being joint tenants or tenants in common. So, there’s no ‘failure’ on the creditor’s part but the protected charging order does in effect sever the joint tenancy.
Where one of the owners has died, and there is a form K restriction on the register, the sole surviving proprietor can sell but it is important that firstly the restriction has been complied with to allow overreaching to occur and for the restriction to be automatically cancelled.
Secondly, and crucially in your scenario, we must be certain that the transfer is a sale and a transfer of the entire legal and beneficial interest in the land, rather than a sale and transfer of for example one of the registered owners' beneficial interest.
It’s that second part that causes the ‘mix’ I mention. One way to confirm the sale/purchase transfer is indeed of the entire legal and beneficial interest in the property is to appoint a second trustee to act with the surviving owner so that together they then transfer the whole legal and beneficial title and take receipt of the purchase monies.
Practice guide 76 provides more guidance with regards to charging orders including how they can be protected on the register and how that differs depending on whether there is a sole or joint proprietor.
Sections 4 and 7 contain important guidance often referred to in relation to how a Form K restriction might be automatically cancelled when there is a sale/purchase, provided the restriction is complied with.
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