Charging order severing Joint Tenancy - what happens if you pay it off?

[sithemadmonkey]

Hi all, <insert obligatory "I'm new here, sorry if I'm in the wrong bit" statement>,

I've read in several places that if a house is owned as beneficial joint tenants, and a charging order is made and registered against one of the owners, the charging order automatically severs the joint tenancy and changes the ownership to tenancy in common.

What I'm not so sure about is what happens when the debt behind the charging order is paid off. Does the act of paying it off then automatically change the ownership back to joint tenancy again, or would it stay as tenants in common until the owners restored the joint tenancy? The only reference I can find to it is not exactly reliable - it's the money section of the Daily Mail...

In context, I'm helping to administer a family member's estate, and trying to work out the ownership of the house that was jointly owned with someone else (who, unfortunately, I am not on speaking terms with). My family member had a charging order put on the property in their name, but paid it off about 3 years before they died. The restriction was left on the title, however, and I don't think anything else has been done about the ownership since. I've spoken to three different solicitors about it, none of whom can give me a straight answer, and the Land Registry state they cannot advise on the ownership of a house.

Many thanks in advance to anyone who can help!

[Amethyst]

Re: Charging order severing Joint Tenancy - what happens if you pay it off?

Severance of the Beneficial Joint tenancy can occur due to a Charging Order but it depends heavily on the circumstances. I'm really not sure what happens if a restriction etc is paid up but not removed from the regsiter - apparently this was included in recent changes to the legislation which I'll have to look up tomorrow. But for now;

What was the original reason for the charging order?
Do you have copies of the documents placing the restriction on the property?
Was it actually a restriction against one party or over the entire property ? (Was it Form A / K ? etc)
When was the CO discharged ?
Were they a married couple with joint mortgage etc on the property ?

If the property was joint owned and one party died then as beneficial joint tenants the other party would have full ownership. (which is presumably what you are hoping not to be the case).

[sithemadmonkey]

Re: Charging order severing Joint Tenancy - what happens if you pay it off?

Hi Amethyst,

Thanks for your help, answers to your questions:

What was the original reason for the charging order?
I'm not sure of the original reason. The debt is to HLCF Ltd, who seem to be just another generic DCA. All I know is that it wasn't for much, about £1,100 - I'm surprised they even went for a CO, to be honest...

Do you have copies of the documents placing the restriction on the property?
I've got a copy of the title from the land registry, which shows the restriction, but no documents regarding the actual charging order itself. Can I get these from the issuing court?

Was it actually a restriction against one party or over the entire property ? (Was it Form A / K ? etc)
It was a Form K restriction, against one party's beneficial interest.

When was the CO discharged ?
The debt behind the charging order was paid in 2009, I don't know if the CO was formally discharged (or if this is any different). The sols acting for the creditor are checking why the restriction wasn't taken off, I'm waiting to hear back from them. My family member died in 2012.

Were they a married couple with joint mortgage etc on the property?
They were unmarried, and my family member died intestate - hence why the ownership of the house is crucial. The house was owned outright.

You are correct in your assumption, I am hoping that the Beneficial Joint Tenancy was severed.

What is the legislation that you refer to? If I need to instruct sols in time it would be useful to point them in the right direction (or at least sound like I know what I'm talking about).

Many thanks again for your help!

[Amethyst]

Re: Charging order severing Joint Tenancy - what happens if you pay it off?

Makes it simpler that they weren't married, so if it is proven they were tenants in common, the share of the deceased party will be dished out according to the rules of intestatcy.

I can't find anything in the LRA 2002 http://www.legislation.gov.uk/ukpga/2002/9 - I can see the logic in your thinking that the Form K restriction indicates tenants in common rather than beneficial joint tenants but I can't find anything official supporting that. If the couple bought the property as beneficial joint tenants, had a form K on one party, discharged the restriction (but failed to inform LR) then I suspect it is more in favour of them having the beneficial joint interest in the property than having been severed automatically because of the charge.

You really do need to see a professional - conveyancing lawyer at a guess.

Is the property the only estate ?

[sithemadmonkey]

Re: Charging order severing Joint Tenancy - what happens if you pay it off?

A conveyancing solicitor (preferably with a firm that deals with debt as well) would most definitely be the next stop, as you say. I'll see what I can find out, then post back here when I know. Aside from the house, the estate is very small indeed so it makes a big difference.

I'm guessing the same as you with regards to the debt being paid - it's probably the act of paying the debt rather than removing the form K which restores the joint tenancy; but there's rather a lot at stake, so I want to find out for certain before I drop that line of enquiry.

A slightly new development, however, is the other restriction that's on the title. It's in the partner's name, and is another form K restriction, but only for an interim charging order. I hadn't bothered looking into it previously as it was nothing to do with my family member, and I had assumed that it had been paid before the final CO was granted.

Just out of interest, I gave the sols acting for the creditor a ring, but as I suspected they weren't able to give any information about the debt away (fair enough, I wouldn't expect them to). They were, however, able to confirm that they don't always bother to add the final CO restriction to the title register if the interim one's already on there (since they both serve the same purpose), and that they always remove the restriction once a debt has been paid (said whilst looking at the file. Translation: the debt is still outstanding).

I'm assuming this makes it a bit clearer-cut, but I just need to find out now whether an active CO on a single owner of a jointly-owned property would definitely have severed the Beneficial Joint Tenancy, and result in a Tenancy in Common? Just to clarify, this CO was also added before my family member passed away.

Thanks again for your help, I will be sure to post an update as soon as I know more.