Does this sound like fraud?

[TonyRPH]

I am currently tasked with a company take over (property management).

Along the way, I have discovered the following;

Company XYZ used to own one of the properties here, which they have taken a loan against with a foreign sounding (but UK based) bank.

According to companies house, in the charges section there is an unsatisfied charge against this property. All good so far you might think.

But, said property (a flat) has since been sold to a person (rather than a company) and the deed shows that a certain (unrelated to the bank above) building society has a registered charge against it.

The charge listed on companies house remains unsatisfied.

So to my inexperienced eyes, it looks as though there are two secured loans against this property, by two different entities (one a company, the other a person - not related).

Does this sound fraudulent?

[James P]

The charge at Companies House is not linked to that at Land Registry. It’s common for a property to be sold, HMLR charge satisfied and title transferred to new owner without CH charge being marked as satisfied. Should be straightforward to mark as satisfied.

[springfan62]

The land registry title will be the definitive record.

Charges on companies are often not updated to record charges being satisfied.

[TonyRPH]

I see this system being wide open to fraud.

For example, one could buy a property using a loan from an overseas bank, then sell it on without settling the first loan?

Obviously one would have to continue payments on the loan, but how would the bank know if the property had been sold?

In the case mentioned in my OP, why has the new lender apparently provided a mortgage when there is potentially a secured loan against the property?

When the charge is satisfied, is companies house not updated automatically?

[springfan62]

It won't happen because Land Registry hold a charge against the property in favour of the first lender.

That will only be removed when the first mortgage is repaid.


The register of charges on companies house is more so you have an overview of the companies financial commitments as there could be charges which are held against other assets than just land such as plant and machinery or debtors.

[AlwynMike]

Some years ago my ex BiL was asked to do a valuation for mortgage on an agricultural property. He advised the bank (NatWest) not to approve the mortgage. He told me that he had barely stopped his car, never mind get out and inspect the property. He thought it "wasn't right". He was contacted later by NatWest for his reasons for refusal.....it seems there were a number of mortgages applied for and fulfilled on the property. NatWest were quite pleased they had followed his advice.

[Pro Bono]

TonyRPH said:

I see this system being wide open to fraud.

For example, one could buy a property using a loan from an overseas bank, then sell it on without settling the first loan?

Obviously one would have to continue payments on the loan, but how would the bank know if the property had been sold?

Assuming the loan was secured on the property it would be registered at the Land Registry.

You couldn't sell it without settling the loan, as the buyer would insist on an undertaking from the seller's solicitor that the loan would be repaid following completion.

[Sheepshanks]

Pro Bono said:

Assuming the loan was secured on the property it would be registered at the Land Registry.

You couldn't sell it without settling the loan, as the buyer would insist on an undertaking from the seller's solicitor that the loan would be repaid following completion.

Although it turned out to be just that the bank hadn't told the LR the loan was satisified, late FILs place still had a charge registered against it. Our solicitor was contacted by the buyer's solicitor about it a month after completion.