Advice About a Charge on a Property
Discussion
Looking for some legal expertise and preferably a referral or direct assistance, for which we do expect to pay if someone can help.
Story goes like this:
There is charge on my Father’s property by a Company that was dissolved in 2007. The Director of that company has also died, some years ago. It relates to interest that was owed on a loan made to my Father many many years ago and back in 2007, the amount was around £27,000. My father has made some applications (two) to HM Land Registry to have the charge removed, as there is no entity or person to whom the charge can be satisfied. However, on each occasion HM Land Registry have referred the application back advising that only the entity or person that applied the Charge can request its removal. Obviously this is impossible to achieve.
Is any outstanding amount applicable to the charge now statute barred from recovery?
How do you remove a charge when the entity that applied it no longer exists nor does the Director of the entity at the time it was applied?
They have been told by a Solicitor that the probable solution is to get a statement of no interest by HM Treasury from HM Treasury Solicitor’s Office Croydon – given that this is an asset of a now dissolved company with no living former shareholder, we are not sure if after all these years HM Treasury would have any claim on it?
My Father has written twice to HM Treasury Solicitor about this, but has had no response whatsoever.
Any words of wisdom would be appreciated.
Thanks
Story goes like this:
There is charge on my Father’s property by a Company that was dissolved in 2007. The Director of that company has also died, some years ago. It relates to interest that was owed on a loan made to my Father many many years ago and back in 2007, the amount was around £27,000. My father has made some applications (two) to HM Land Registry to have the charge removed, as there is no entity or person to whom the charge can be satisfied. However, on each occasion HM Land Registry have referred the application back advising that only the entity or person that applied the Charge can request its removal. Obviously this is impossible to achieve.
Is any outstanding amount applicable to the charge now statute barred from recovery?
How do you remove a charge when the entity that applied it no longer exists nor does the Director of the entity at the time it was applied?
They have been told by a Solicitor that the probable solution is to get a statement of no interest by HM Treasury from HM Treasury Solicitor’s Office Croydon – given that this is an asset of a now dissolved company with no living former shareholder, we are not sure if after all these years HM Treasury would have any claim on it?
My Father has written twice to HM Treasury Solicitor about this, but has had no response whatsoever.
Any words of wisdom would be appreciated.
Thanks
Edited by Superleg48 on Thursday 21st April 20:54
When a company it dissolved it ceases to exist. Literally vanishes into thin air.
Any assets which were owned by it immediately prior to dissolution pass to the Crown as what’s called bona vacantia. Bona vacantia is administered by HM Treasury Solicitor, which is why you’ve been pointed there. It sounds as if the dissolved company had the benefit of an unpaid debt and a charge to secure that debt immediately prior to dissolution, and those assets are now vested in the Crown.
Generally time bars on debts start to run only once a demand is made for repayment. In addition a charge often contains a separate covenant to pay (ie a second promise in addition to the first promise to repay the loan). And limitation periods for deeds - which may have been what was used to create the charge - are longer than usual. Someone will need to look at the original documentation and work out whether the claim now vested in the Crown is live or time barred, and then either way what the best course is. An added wrinkle is that in some circs a dissolved company can be restored - eg so that claims like this can be addressed (it is possible that the company had unsatisfied creditors who would have an interest in recovering the money secured by the charge).
Where are you based?
Any assets which were owned by it immediately prior to dissolution pass to the Crown as what’s called bona vacantia. Bona vacantia is administered by HM Treasury Solicitor, which is why you’ve been pointed there. It sounds as if the dissolved company had the benefit of an unpaid debt and a charge to secure that debt immediately prior to dissolution, and those assets are now vested in the Crown.
Generally time bars on debts start to run only once a demand is made for repayment. In addition a charge often contains a separate covenant to pay (ie a second promise in addition to the first promise to repay the loan). And limitation periods for deeds - which may have been what was used to create the charge - are longer than usual. Someone will need to look at the original documentation and work out whether the claim now vested in the Crown is live or time barred, and then either way what the best course is. An added wrinkle is that in some circs a dissolved company can be restored - eg so that claims like this can be addressed (it is possible that the company had unsatisfied creditors who would have an interest in recovering the money secured by the charge).
Where are you based?
BlackWidow13 said:
When a company it dissolved it ceases to exist. Literally vanishes into thin air.
Any assets which were owned by it immediately prior to dissolution pass to the Crown as what’s called bona vacantia. Bona vacantia is administered by HM Treasury Solicitor, which is why you’ve been pointed there. It sounds as if the dissolved company had the benefit of an unpaid debt and a charge to secure that debt immediately prior to dissolution, and those assets are now vested in the Crown.
Generally time bars on debts start to run only once a demand is made for repayment. In addition a charge often contains a separate covenant to pay (ie a second promise in addition to the first promise to repay the loan). And limitation periods for deeds - which may have been what was used to create the charge - are longer than usual. Someone will need to look at the original documentation and work out whether the claim now vested in the Crown is live or time barred, and then either way what the best course is. An added wrinkle is that in some circs a dissolved company can be restored - eg so that claims like this can be addressed (it is possible that the company had unsatisfied creditors who would have an interest in recovering the money secured by the charge).
Where are you based?
Yes, the term Bona Vacantia has been used during my Father’s Discussions with various parties. Any assets which were owned by it immediately prior to dissolution pass to the Crown as what’s called bona vacantia. Bona vacantia is administered by HM Treasury Solicitor, which is why you’ve been pointed there. It sounds as if the dissolved company had the benefit of an unpaid debt and a charge to secure that debt immediately prior to dissolution, and those assets are now vested in the Crown.
Generally time bars on debts start to run only once a demand is made for repayment. In addition a charge often contains a separate covenant to pay (ie a second promise in addition to the first promise to repay the loan). And limitation periods for deeds - which may have been what was used to create the charge - are longer than usual. Someone will need to look at the original documentation and work out whether the claim now vested in the Crown is live or time barred, and then either way what the best course is. An added wrinkle is that in some circs a dissolved company can be restored - eg so that claims like this can be addressed (it is possible that the company had unsatisfied creditors who would have an interest in recovering the money secured by the charge).
Where are you based?
He has attempted to get clarity on any vested interest the Crown may have but has had no response whatsoever.
I am not sure what documentation exists in relation to this charge.
I am based near Norwich, but my Father lives in SW London. He is up this way tomorrow until Wed then back to London. Frankly he doesn’t care where any Legal professional is based, as discussions and meetings can be had via Zoom etc, he just wants someone who knows what they are doing to help him get this resolved.
Superleg48 said:
Pro Bono said:
Could you answer my earlier question, as the answer may be important?
Apologies. I am not sure what form the Charge takes. I do not think it is a mortgage. I will attempt to find out some more around the specific documentation crated when the charge was applied.You could therefore be looking at a total liability of around £60k.
Pro Bono said:
If, as I suspect, it's a charging order imposed by the court then it's the policy of the Bona Vacantia division of the Government Legal Department to recover the full amount secured, together with interest at the full rate of 8% p.a.
You could therefore be looking at a total liability of around £60k.
I don’t think it is a charging order imposed by the court. I think it was a loan made by the Company my Father worked for at the time, secured against his property. The agreement was between him and his Company. I guess that does make it more of a “mortgage” or secured loan, rather than anything a Court would impose?You could therefore be looking at a total liability of around £60k.
I will read through all the paperwork over the weekend and provide a little more helpful detail.
IANAL
S5 of the Limitations Act
5 Time limit for actions founded on simple contract.
An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.
You may be able to get a declaratory judgment from a court to get the charging order removed.
caziques said:
IANAL
S5 of the Limitations Act
5 Time limit for actions founded on simple contract.
An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.
You may be able to get a declaratory judgment from a court to get the charging order removed.
S6(1) and (3) are the places to look. S5 of the Limitations Act
5 Time limit for actions founded on simple contract.
An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.
You may be able to get a declaratory judgment from a court to get the charging order removed.
Superleg48 said:
I don’t think it is a charging order imposed by the court. I think it was a loan made by the Company my Father worked for at the time, secured against his property. The agreement was between him and his Company. I guess that does make it more of a “mortgage” or secured loan, rather than anything a Court would impose?
I will read through all the paperwork over the weekend and provide a little more helpful detail.
Might that attract HMRC attention? I will read through all the paperwork over the weekend and provide a little more helpful detail.
Also look up the doctrine of "laches".
A defendant who invokes the doctrine is asserting that the claimant has delayed in asserting its rights, and, because of this delay, is no longer entitled to bring an equitable claim.
If the Crown have slept on their rights to the money they may not be able to claim it after all this time.
caziques said:
Also look up the doctrine of "laches".
A defendant who invokes the doctrine is asserting that the claimant has delayed in asserting its rights, and, because of this delay, is no longer entitled to bring an equitable claim.
If the Crown have slept on their rights to the money they may not be able to claim it after all this time.
Laches isn’t relevant, as this is not an equitable claim.A defendant who invokes the doctrine is asserting that the claimant has delayed in asserting its rights, and, because of this delay, is no longer entitled to bring an equitable claim.
If the Crown have slept on their rights to the money they may not be able to claim it after all this time.
caziques said:
Also look up the doctrine of "laches".
A defendant who invokes the doctrine is asserting that the claimant has delayed in asserting its rights, and, because of this delay, is no longer entitled to bring an equitable claim.
If the Crown have slept on their rights to the money they may not be able to claim it after all this time.
As you’re now nought for two, perhaps it would be an opportune time for you to be quiet. A defendant who invokes the doctrine is asserting that the claimant has delayed in asserting its rights, and, because of this delay, is no longer entitled to bring an equitable claim.
If the Crown have slept on their rights to the money they may not be able to claim it after all this time.
Whilst your end game is the removal of the charge, there is a bit more to consider here.
The outstanding loan was an asset of the company. Unless that asset was transferred out of the company prior to it being dissolved, then it passes to the Crown as Bona Vacantia. The first port of call is therefore to look at how the company was dissolved.
If the sole director and shareholder died and the company was struck off for non filing or similar, rather than being cleanly wound up and dissolved the situation may be quite messy as the crown presumably won’t have any information beyond that filed at Companies House.
If it has passed to the crown, then all the Treasury Solicitor can do is either sell the asset at full market value, or disclaim it - meaning it no longer has any interest in it.
You might be better with a Corporate solicitor than a property lawyer for this, with a view to getting the loan disclaimed. If you can secure that, the Land Registry should remove the charge.
The outstanding loan was an asset of the company. Unless that asset was transferred out of the company prior to it being dissolved, then it passes to the Crown as Bona Vacantia. The first port of call is therefore to look at how the company was dissolved.
If the sole director and shareholder died and the company was struck off for non filing or similar, rather than being cleanly wound up and dissolved the situation may be quite messy as the crown presumably won’t have any information beyond that filed at Companies House.
If it has passed to the crown, then all the Treasury Solicitor can do is either sell the asset at full market value, or disclaim it - meaning it no longer has any interest in it.
You might be better with a Corporate solicitor than a property lawyer for this, with a view to getting the loan disclaimed. If you can secure that, the Land Registry should remove the charge.
So I have read through the reams of paperwork related to this.
The charge was imposed by the Company in relation to a loan made to my Father for the sum of £10,000 (this was back in 1997/8). Interest would be payable on the loan at 2% above base rates.
The Company also took back some of his shares in the Company in return for the loan.
In return my Father would make himself available for consultancy services and that the intent of the shareholders of the company was that the loan would be repaid from the eventual profit distribution/dividends to the Shareholders once the company was in profit or upon purchase of the Company by another entity.
This never happened, in that the company never made a profit and was never sold. It was dissolved in 2018. The Companies House notice of dissolution states that all rights vested in or held in trust for the Company are deemed Bona Vacantia and acccordingly will belong to The Crown.
The last correspondence that father decided was from Company was a statement letter confirming the balance outstanding as at 2007 was £23k. We have done some fag packet maths and the balance would now be around £37k.
My Father has written to HMRC Solicitors office dealing with Bona Vacantia twice and has received no response.
What he wants is Legal Counsel to raise this with HMRC Legal and given the length of time passed, since the charge was made and since any communication relating to the charge from the Company is many years, coupled with the fact that the implicit intent of the application and subsequent repayment mechanism of the Charge never materialised, that none of the surviving Shareholders are remotely fussed about it, that the charge should be dismissed as never have been intended to be enforced in the first instance.
Or to discuss the outstanding amount with HMRC Legal and discuss terms to settle and then have HMRC Legal discharge their interest in the charge to enable my Father to make an application to HM Land Registry to have it removed.
He is happy ot pay such Legal Counsel. The issue is that of those Solicitors he has spoken to this far, none seem ably equipped in the areas of law that this falls into, hence my plea for recommendations. (I have noted one recommendation already provided with Thanks)
The charge was imposed by the Company in relation to a loan made to my Father for the sum of £10,000 (this was back in 1997/8). Interest would be payable on the loan at 2% above base rates.
The Company also took back some of his shares in the Company in return for the loan.
In return my Father would make himself available for consultancy services and that the intent of the shareholders of the company was that the loan would be repaid from the eventual profit distribution/dividends to the Shareholders once the company was in profit or upon purchase of the Company by another entity.
This never happened, in that the company never made a profit and was never sold. It was dissolved in 2018. The Companies House notice of dissolution states that all rights vested in or held in trust for the Company are deemed Bona Vacantia and acccordingly will belong to The Crown.
The last correspondence that father decided was from Company was a statement letter confirming the balance outstanding as at 2007 was £23k. We have done some fag packet maths and the balance would now be around £37k.
My Father has written to HMRC Solicitors office dealing with Bona Vacantia twice and has received no response.
What he wants is Legal Counsel to raise this with HMRC Legal and given the length of time passed, since the charge was made and since any communication relating to the charge from the Company is many years, coupled with the fact that the implicit intent of the application and subsequent repayment mechanism of the Charge never materialised, that none of the surviving Shareholders are remotely fussed about it, that the charge should be dismissed as never have been intended to be enforced in the first instance.
Or to discuss the outstanding amount with HMRC Legal and discuss terms to settle and then have HMRC Legal discharge their interest in the charge to enable my Father to make an application to HM Land Registry to have it removed.
He is happy ot pay such Legal Counsel. The issue is that of those Solicitors he has spoken to this far, none seem ably equipped in the areas of law that this falls into, hence my plea for recommendations. (I have noted one recommendation already provided with Thanks)
Edited by Superleg48 on Sunday 24th April 19:39
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