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Stuart J
Stuart J, Solicitor
Category: UK Property Law
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Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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Could you tell me what this means please? "restriction no

Resolved Question:

Could you tell me what this means please?
"restriction no disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent signed by the proprietor for the time being of the charge dated 22 may 2009 in favour of HSBC bank"

Thank you
Submitted: 10 months ago.
Category: UK Property Law
Expert:  Stuart J replied 10 months ago.

Thank you for the question. It is my pleasure to help you with this today. Please bear with me if I ask for more information. can you please confirm that there is charge registered 22 5 09 on the HMLR title deeds?. What are you looking to do and what is your position in this. can I have as much detail as possible please?

 

 

If you give me the background, I can probably expand my answer.

 

This is called a restriction as it says

 

Disposition is a disposal but it does not mean a disposal in a literal sense, as in a sale although it includes a sale.

 

It means a disposal of a part of an interest.

 

That includes granting a mortgage/second charge, lease, remortgage, or sale.

So what it says is that the property cannot be sold or lease granted or re-mortgaged and they can be no other transactions on the property unless HSBC who have charged it seems dated 22 May 2009, agree.

 

The proprietor of the registered estate is simply the legal owner named on the deeds.

 

That does not stop anyone applying to court to enforce a debt by way of a charging order because the court can still grant the order, regardless of the restriction.

 

It is not necessarily so that whoever owns the property has financial problems because many lenders put these restrictions on from outset to make sure that their mortgagor/borrower does not incur further debts which might affect their ability to pay the principal mortgage.

 

Does that answer the question? Can I assist further?

Customer: replied 10 months ago.

Hi,


The Land Regsitry search showed lenders HSBC and Lloyds.


I then did another search using landregistryservices.com and the results was:-


A: Property Register


This register describes the land and estate comprised in the title.


SOUTH GLOUCESTERSHIRE


1 (03.10.2000) The Freehold land shown edged with red on the plan of the


above Title filed at the Registry and being The Chalet, Thornbury Hill,


Alveston, Bristol (BS35 3LG).


2 (03.10.2000) The land has the benefit of the rights reserved by but is


subject to the rights granted by a Conveyance of land adjoining the


eastern boundary of the land in this title dated 27 February 1976 made


between (1) Midland Bank Trust Company Limited and (2) XXXXX XXXXX


Brain and Merryl Susan Brain.


NOTE: Original filed under GR223987


3 (03.10.2000) The Conveyance dated 27 February 1976 referred to above


contains a provision as to light or air.


4 (03.10.2000) The land has the benefit of the rights granted by but is


subject to the rights reserved by a Conveyance of the land in this


title dated 1 April 1976 made between (1) Midland Bank Trust Company


Limited and (2) Philip Richard Dunning and Jane Rosemary Dunning.


NOTE: Original filed.


5 (03.10.2000) The Conveyance dated 1 April 1976 referred to above


contains a provision as to light or air.


B: Proprietorship Register


This register specifies the class of title and identifies the owner. It contains


any entries that affect the right of disposal.


Title absolute


1 (22.01.2001) PROPRIETOR: JOHN XXXXX XXXXXPH PADDON and MELANIE PADDON


1 of 2


B: Proprietorship Register continued


of The Chalet, Thornbury Hill, Alveston, Bristol BS35 3LG.


2 (22.01.2001) The price stated to have been paid on 21 December 2000 was


£550,000.


3 (22.01.2001) The Transfer to the proprietor contains a covenant to


observe and perform the covenants contained in Clause 6 of the


Conveyance dated 1 April 1976 referred to in the Property Register and


of indemnity in respect thereof.


4 (19.08.2009) RESTRICTION: No disposition of the registered estate by


the proprietor of the registered estate is to be registered without a


written consent signed by the proprietor for the time being of the


Charge dated 22 May 2009 in favour of HSBC Bank PLC referred to in the


Charges Register.


C: Charges Register


This register contains any charges and other matters that affect the land.


1 (22.01.2001) REGISTERED CHARGE dated 21 December 2000 to secure the


moneys including the further advances therein mentioned.


2 (04.12.2007) Proprietor: LLOYDS BANK PLC (Co. Regn. No. 2065) of


Registrations, Secured Assets, Barnett Way, Gloucester GL4 3RL.


3 (19.08.2009) REGISTERED CHARGE dated 22 May 2009.


4 (19.08.2009) Proprietor: HSBC BANK PLC (Co. Regn. No. 14259) 40-54-47


of Sheffield Securities Processing Centre, P.O. Box 3924, Sheffield S1


9BD.


End of register


 


Basically I am trying to find out if there are any charges on the property, the couple in question have asked me to act as their agent to rent their property out as a holiday home. I have found out their business is in administration with 6 out of 9 outstanding charges and I want to make sure their house hasn't been used as a guarantee to their business debts. Basically I smell a rat, but I want to make sure as it could be a very profitable rental for us, but I don't want to take it on if there are going to be problems ahead.


 


Thank you


 

Expert:  Stuart J replied 10 months ago.
Any subletting is a disposition and will be illegal
There are two charges on the property, one dated 21 December 2009 to Lloyds bank and the second charge dated 22 May 2009 to HSBC. It is the date of creation of the charge, which gives priority and in this case, Lloyds have priority over HSBC.
HSBC, holding the second charge, are mindful that they don’t want further charges that could affect ability to pay, and hence the restriction.
I cannot tell you whether the house has been used as a guarantee to their business debts or not because it is impossible to know what the business debts are.
They bought the property on 21 December 2000 and the registered charge to Lloyds bank is 21 December 2000. So that is the mortgage from when they bought the property.
The HSBC one was added later in 2009, but was not as a result of any court order.
The only problems ahead would be that HSBC do need to give consent to the subletting if the rental is not going to be illegal.
By the same token, although there is no restriction on the register in respect of Lloyds, the owners will be in breach of their mortgage conditions I subletting is their mortgage with Lloyds does not allow it. If that is the case, then anyone subletting the property has no right to stay in it because any agreement is illegal.
Does that answer the question? Can I assist further?
Customer: replied 10 months ago.


Hi,


 


Thank you, XXXXX XXXXX you have clarified my thoughts that this is to risky for us.


 


Many thanks


 


Kind regards


 


Helen

Expert:  Stuart J replied 10 months ago.
I am glad to help. But obviously that must be your decision. At least now you have the full explanation in simple terms
Stuart J, Solicitor
Category: UK Property Law
Satisfied Customers: 20155
Experience: PGD Law. 20 years legal profession, 6 as partner in High Street practice
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