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hi i have a commercial mortgage with a charge on our land ,or…

Customer Question
hi i have a commercial...
hi i have a commercial mortgage with a charge on our land ,or so i thought i have found out that the bank infact does not have a valid signed loan agreement and they infact have a second charge (second to my debenture for my loan to the company) i want to get out of the mortgage with the bank can anyone advise the legalities of how it would work
Submitted: 8 years ago.Category: UK Law
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Answered in 13 hours by:
6/11/2010
Solicitor: James Mather,
 replied 8 years ago
James Mather
Category: UK Law
Satisfied Customers: 22,629
Experience: Senior Partner at Berkson Wallace
Verified

Valid legal charge or not, you still owe the money. If they wanted to chase you and you weren't paying they could apply to the court to have the charge registered regardless of having a valid charge deed

Loans rank on order created if unregistered but if yr land is regd and if theirs predates yours they can apply to the court to have yours postponed in their favour.

 

I cant see any way to get out of it particularly if it was intended to be secured. The company is really yr alter ego so any court isnt likley to look favourably on it if other creditors are disadvantaged.

 

 

I can only advise you based on the facts you present.

If you give me good feedback, this helps put me up the ratings.

Thank you.

Good luck.

Regards

JL

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Customer reply replied 8 years ago
hi my charge predates theirs but is not charged on the land but the company although it says on the charge on the land and assets should i get this registered and would it come before their charge?
Solicitor: James Mather,
 replied 8 years ago

If it isnt registered at companies house within 21 days of creation they wont register it without court order. They very strict on that.

 

If it is seen as way of defeating creditors, they can apply to have it overturned. You and the company are in fact one and the same in reality.

 

So you have charged the company in respect of your loan. The company owns the land and the lender should have a charge over the land but doesnt? Or should that have charge over the company?

 

 

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Customer reply replied 8 years ago

no its registered at companies house but not at the land registry as a charge

it was done in june 2006 and stated on the land and assets

 

the banks one was in aug 2006 and it was for loans due to the banks in any way but theirs is registered on the title of the land

 

how does my charge stand is it stronger or weker than the banks

 

any clearer

Solicitor: James Mather,
 replied 8 years ago

 

In addition you have acharge on a company and it's assets of which one asset is itself charged. If you wanted to realise your charge and forced a sale of assets that sale of the land is subject to a 1st charge of the bank.

 

Even so, your charge is undoubtedly weaker because you and the company are in reality one and the same.

 

 

I can only advise you based on the facts you present.

If you give me good feedback, this helps put me up the ratings.

Thank you.

Good luck.

Regards

JL

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Customer reply replied 8 years ago
so what are you saying if say the bank forclosed because the company did not pay the mortgage would they get paid first or would i
Solicitor: James Mather,
 replied 8 years ago

The bank would apply for sale of the property and be paid. You would still have yr charge on the company. Even if you both had charges and you ranked in front of them, they would apply to set yours aside on the basis that you and the company are really the same.

 

I can only advise you based on the facts you present.

If you give me good feedback, this helps put me up the ratings.

Thank you.

Good luck.

Regards

JL

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Customer reply replied 8 years ago
hi forgot to say we are not directors nor shareholders of the company silly me so how does that change things
Solicitor: James Mather,
 replied 8 years ago

Thanks . I am not certain who owns what in that case. The company owns the land or you do? The company granted the mortgage or you did?

What is your interest in the company and why did you lend it money.

Thanks

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Customer reply replied 8 years ago
ok the company owns the land and business i loaned it the money to the company (my son owns the company)but it was a fully commercial loan
Solicitor: James Mather,
 replied 8 years ago

So it's the company that wants to get out of the mortgage?

What was the amount of loan, what for and what is the value of the company?

Does it bear interest?

I still think that the bank will rank ahead of you.

JL

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Solicitor: James Mather,
 replied 8 years ago

So the company has the mortgage not you? You said you wanted to get out of the loan. You mean the company?

 

"It was a fully commercial loan". How much and for what purpose? What is the company worth. What I am trying to establish is that it isnt a sham charge to avoid other creditors.

 

I still think the bank will rank ahead of you.

 

JL

 

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Customer reply replied 8 years ago
yes fully commercial 300k in 2006 and is in the company account with repayment of 400 per week still owe around 250k incl interest etc..no sham its been there 4 years
Solicitor: James Mather,
 replied 8 years ago

The secured charge takes priority over the debenture. Sorry

 

I can only advise you based on the facts you present.

If you give me good feedback, this helps put me up the ratings.

Thank you.

Good luck.

Regards

JL

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