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Mortgages and Other Charges Registered Against Land

By: Louise Smith, barrister - Updated: 7 Nov 2017 | comments*Discuss
 
Conveyance Mortgages Charges Land

Any mortgages, or other loans, secured against registered land will appear in the Charges Register section of the Land Register.

First Mortgages

If the land was purchased with a mortgage, or if the property is subsequently re-mortgaged, this will be referred to in the Charges Register.

The purpose of registering a mortgage is to ensure that anybody who deals with the land, either by a conveyance or by granting a further loan secured against the property, will have notice that there is a mortgage which takes priority to subsequent legal interests.

The Charges Register section of the Land Register will give the date of the mortgage, state what is secured by the mortgage (but not the actual amount of money borrowed) and the date on which the mortgage was registered.

The Register will also give the full name and address of the mortgage company. If the mortgage company has an obligation under the terms of the mortgage to provide further advances this may also be mentioned in the Register.

The original mortgage deed, or a copy of it, may be retained by the Land Registry. An application may subsequently be made to obtain an official, certified copy of the mortgage deed. The creation of a first legal mortgage will now result in previously unregistered land being registered with the Land Registry.

Subsequent Charges

If a subsequent loan or second mortgage is secured against the property, this will be entered on the Land Register in the same way as a first mortgage. Again, the Register will give the date of the loan or mortgage, the date of registration and the name and address of the lender.

Sometimes a secured loan may have been taken out before a mortgage – for example, a loan may have been taken out to provide the deposit on the purchase price. It is likely that such a loan will take second place in legal priority to the main mortgage even if it pre-dates the mortgage.

Equitable Charges

A secured loan may sometimes be registered as an equitable charge instead of a legal charge. There are a number of reasons why this might happen. Some of the most likely reasons why an equitable mortgage might be created are:
  • Another lender who already has a loan secured against the property has refused to give permission for a further loan to be secured against the property;
  • There is a defect in the documentation which purported to create a legal charge or mortgage;
  • The borrower does not own a legal estate in the land but only has an equitable interest such as an interest under a trust.
In any of the cases described above the lender will have an equitable charge rather than a legal charge. This will still give the lender rights in respect of the property and may be registered against the property on the Land Register.

A registration entry for an equitable charge will look slightly different to the entry relating to a legal charge.

Charging Orders

If a company or an individual obtains a judgment, in relation to a debt, against the owner of a property or land they may apply for a charging order to secure that judgment. Charging orders are granted in two stages:
  • An interim charging order is granted, without a court hearing, based on an application made by a judgment creditor;
  • A final order may be made after a hearing if a judge considers it appropriate to do so.
When an interim charging order is obtained, the company or individual in whose favour it is made is entitled to register it against the property. The Land Register will give the name and address of the creditor, state that they have the benefit of an interim charging order and give details of the court which made the order and the date on which it was granted.

The effect of registration is to prevent the owner selling or disposing of the property without paying the judgment debt. Registration takes place before the hearing to prevent the debtor selling the property before the charging order can be registered.

There is no longer any requirement to register the making of a final charging order – the creditor relies on the initial registration as proof that they have a secured debt. The costs of registering the charging order will be paid by the owner of the property if a final charging order is granted. Usually these costs will simply be added to the total debt secured on the property.

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[Add a Comment]
Thanks for speedy reply. Re my original question, is a second charge mortgage the same as a homeowner loan or any other secured loan? Thanks again
Vice - 7-Nov-17 @ 5:12 PM
Vice - Your Question:
I am after some advice - I am looking to consolidate some debt with a secured loan against my property. My father has a charge on the property as he lent me the money to complete the original purchase. I have about £70K equity in the property. Does a 1st charge owner have to notified if looking to secure money against the property? Or will it just be added to the land registry?Thanks

Our Response:
The first charge holder will need to be notified.
DIYConveyance - 3-Nov-17 @ 1:48 PM
I am after some advice - I am looking to consolidate some debt with a secured loan against my property. My father has a charge on the property as he lent me the money to complete the original purchase. I have about £70K equity in the property. Does a 1st charge owner have to notified if looking to secure money against the property? Or will it just be added to the land registry? Thanks
Vice - 2-Nov-17 @ 4:57 PM
Hi I have a charge on my house from a car finance company, I wasn't able to keep up with the payments and returned the car to them but they still wanted the money. Looking at companies house information the company went into administration and since doesn't look like have traded for a number of years. Is there any way of having this charge removed I haven't received any correspondence from them for around 10years and I am now looking to remortgage. Thank you any advice will be gratefully received.
Dazcs - 28-Sep-17 @ 8:50 PM
Concerning registering charging orders against property. One way of registering a charging order is via UN1 to obtain a form K restriction against the Proprietorship Register (B). However, this is merely a requirement to inform the holder of the charge that the property will be sold. Your article states that "The effect of registration (of the charging order) is to prevent the owner selling or disposing of the property without paying the judgment debt." Does this mean that a Notice needs to be entered into the Charges Register (C) via a UN1 and if so how would that be achieved? Thanks in advance for your time.
Simonyglog - 16-Jun-17 @ 12:44 PM
Radders89 - Your Question:
Hi,The conveyancer now wish to correct their mistake and have the charge registered against the property some 13 years later. Can I refuse?

Our Response:
They would have to apply to the courts to do this now.
DIYConveyance - 3-May-17 @ 2:47 PM
Hi, The conveyancer now wish to correct their mistake and have the charge registered against the property some 13 years later. Can I refuse?
Radders89 - 3-May-17 @ 12:51 PM
radders89 - Your Question:
I purchased my first flat in 2004 with the assistance of a 13% key worker loan. A legal charge for this loan should have been registered by my conveyancer at the time (I have copies of documentation from the key worker scheme to the conveyancer). However, I recently received a letter from the conveyancer informing me that this charge was not registered on the property.Where does this leave me with my current lender, who I assume would not have borrowed me the amount they did if the charge was in place at the time of re-mortgage? Also, how can I ensure that I an not financial out of pocket at the conclusion of this charge being put on the property given that the conveyancer is at fault? Any advice gratefully accepted.

Our Response:
If the legal charge was never registered, surely it is not an issue for you?
DIYConveyance - 3-May-17 @ 11:53 AM
I purchased my first flat in 2004 with the assistance of a 13% key worker loan. A legal charge for this loan should have been registered by my conveyancer at the time (I have copies of documentation from the key worker scheme to the conveyancer). However, I recently received a letter from the conveyancer informing me that this charge was not registered on the property. Where does this leave me with my current lender, who I assume would not have borrowed me the amount they did if the charge was in place at the time of re-mortgage? Also, how can I ensure that I an not financial out of pocket at the conclusion of this charge being put on the property given that the conveyancer is at fault? Any advice gratefully accepted.
radders89 - 2-May-17 @ 6:05 PM
My daughter is buying a house and we have discovered there are numerous charges on it. One has been removed but the others are all with big lenders and they aren't either removing them. The vendors solicitors keep saying they are working on it but my daughter is a cash buyer and wanted a quick move and it's been over 2 months now.How long do we wait. Car
Sue - 14-Apr-17 @ 6:34 PM
Cal - Your Question:
Hi thereI would to register a second charge against a property purchase to secure a private loan for the deposit.The lent deposit is from multiple lenders. Can I register a second charge where they individually rank equal?Thanks

Our Response:
We're not sure about this. You need to check that your first charge lender hasn't put any restrictions on title that would affect a second charge and if so,that all lenders agree to "sharing" the second charge anyway. You should try a registered financial adviser for proper advice.
DIYConveyance - 10-Apr-17 @ 11:54 AM
Hi there I would to register a second charge against a property purchase to secure a private loan for the deposit. The lent deposit is from multiple lenders. Can I register a second charge where they individually rank equal? Thanks
Cal - 7-Apr-17 @ 10:51 AM
i have a charge on my property that i never agreed to i have a statute barred loan (no contact for over seven years) with the same company which has since gone into administration and all debts have been acquired by another company. how do i get the charge removed?. Thanks Chaz
chaz - 14-Feb-17 @ 9:45 AM
We are selling a property that has charges against but as they are old, the registered details are incorrect and we are getting no response from the creditors. Do you know of any precedent to discharge the dept after due diligence has been followed to repay it but the enquiries ignored?
John - 25-Nov-16 @ 4:44 PM
Lu- Your Question:
We bought a property 11 years ago as freehold ,we have applied to remortgage and have found out there is a 999 lease on the property we have never paid ground rent or been asked too ,I have tried everything to get this removed as per request of my solicitors but no one can help me ,and now I may not be able to re mortgage any help would be appreciated Lu

Our Response:
This should have been spotted by your conveyancing solicitior when you bought the property. Your title deeds should give you all the relevant details (including the owner of the lease), apply to your lender for a copy of the deeds. Then find a better solicitor who can help you with this! You might want to consider seeking compensation from the original conveyancer if you do not manage to get this resolved.
DIYConveyance - 9-Nov-16 @ 11:47 AM
We bought a property 11 years ago as freehold ,we have applied to remortgage and have found out there is a 999 lease on the property we have never paid ground rent or been asked too ,I have tried everything to get this removed as per request of my solicitors but no one can help me ,and now I may not be able to re mortgage any help would be appreciated Lu
Lu - 8-Nov-16 @ 2:10 PM
I am considering the much same as Roger for my daughter so she can retain the family home after divorce. I have been advised that if I secure the loan through a Legal Charge I may be liable to pay second home Stamp Duty as I own my own home? Many thanks
Mica - 10-Aug-16 @ 6:15 PM
i am inyterested in doing the same as roger and wondere what advice he was given
karew - 27-Jun-16 @ 11:07 AM
I am interested in applying a legal charge to a title as I intend to loan my son some money. I have in mind that there will be no interim payments, only a lump sum after 5 years and want to force a sale if not paid. Do you have any examples of such? Thanks
roger - 20-Jan-15 @ 4:01 PM
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