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[tilly]

Urgent please.When, how and who can remove a restriction registered on a property if its been placed by a Trustee??

[Hg]

Hello

What are the circumstances?

[tilly]

Hi HG,do circumstances make a difference?
any way, made bankrupt late 80's(negative equity times)
re mortgaged late 90's(back to good equity)
restriction on land registry by Trustee(oh dear cant complete re-mortgage)
Contact Trustee...
Re-mortgage completes.

My question is what would have needed to have been done by who ever for that re-mortgage to complete when there had been a restriction.

Cheers
Tilly

[Hg]

Hello

Assuming the Trustee no longer has an interest in the property, you should be able to apply to the Land Registry for the cancellation of the restriction (probably form RX3 based on what you say).

There isn't a fee, but you would have to provide evidence that the restriction is no longer appropriate.

Does the Trustee have an interest in the property any more? Assuming they don't, why not? Is it purely because of passage of time and the Enterprise Act setting the three year limit for dealing with the interest in a property? Or did you buy the interest at some point in the past?

[tilly]

Hi Hg
In 2000 the trustee was informed of the re mortgage and in order for it to complete the restriction needed to be dealt with,now that is point of my question,what action would the then trustee have taken in order to remove the restriction which is what happened.
From that date until 2004 I languished in the belief that my bankruptcy had ended the restriction that had sat on the land registry for 10yrs until 2000 had been removed and there was no further communication,that illusion was shattered when the enterprise act and the PRU came in to play in 2004 and secretary of state appointed a new trustee.

From reading your reply should we have made sure that the restriction was cancelled when the trustee removed his interest? if this had been known to us then we probably would have .

And yes the appointed trustee in 2004 does still have an interest they were lucky in so far as they got an order for possesion just 2 days befor the use or lose it clock timed out in march 07,that order is about to be executed for a claim that can but only be described as disspropotionate to the original 1990 bankruptcy petion where there was only one un proven creditor.

So I still can not understand on what basis did the trustee remove the restriction in 2000, hence my question.
Tilly

[Hg]

Hello

This was why I wanted to know the background - it sounded like there was more to the question, and an answer based on partial knowledge isn't helpful to you

The Trustee hasn't removed the restriction, and nor could you have, as they still had (and have) an interest.

Keeping everything together:

A creditor that has "proved" is one who has lodged a formal claim for their debt, and one who hasn't proved is one known to the Trustee but who hasn't lodged a formal claim. Many creditors won't bother with the admin task of preparing a formal claim if they are told they won't get any money out it, but will when they are told they will.

I do not think your best aim here is to try and challenge the validity of the restriction. I think what you want to do is try and get the bankruptcy annulled on grounds of payment in full. (though this will obviously include doing just that.) If you do it yourself then the trustee will not incur substantial fees for realising assets and distributing the funds to creditors, which will leave more of the value of the house for you.

However it sounds like things have already got a long way down the line, and that you would need to act fast.

Taking first things first:

- When is the next court hearing?
- Did you co-operate with the Official Receiver when you were first made bankrupt? Were there other creditors that they just don't know about?
- Who is the creditor and how much are they owed? Am I right in guessing that it's the tax man?
- What are the Trustee's fees? Do you know?

[tilly]

Hg the un-proven creditor was not the tax man, it was for the supply of goods to a business I had, business failed,I paid all other creditors/debts befor I was made bankrupt by the petitioning creditor who was the un proven creditor,the only creditor for the sum of approx £2k.

In 2000 the trustee was contacted as I said and at that time we could have settled any claims and costs, he did remove the restriction in 2000!!

When I was first made bankrupt in 1990 I fully co-operated with the OR/Trustee I had no reason not to other than I did not have finance avaiable to settle the petitioners claim,, she went through the process and all I can remember was that I was told it was a fresh start and that as long as I wasnt made bankrupt again that was it....no equity in the home then and the home was never discussed and no further communication took place untill...
10 yrs later when re-mortgaged
I am not challenging the validity of that said restriction what I want to know is what was the process that would have needed to have been taken back in 2000 to have removed the restriction.

Yes it has gone a long way now 2k in 1990 has become 25k inc costs with yet more costs of 20k,cant do anything about it other than pay through another re-mortgage.
Thank Tilly

[Hg]

Do you have any of the correspondence with the trustee? Not asking for the money then seems a very bizarre way for a trustee to act.

[tilly]

Hg, thankyou you sound like a voice of reason Bizarre is what I have been saying for years now,it has never been questioned by my legal peeps nor from the other side.

I appreciate that before the enterprise act it was well documented that there were many BR cases where the interest in the property had not been realised, but I can not understand why when a Trustee was contacted by a solicitor he did not act then, was he just incompitant or complacent,which ever I belive that it should have been dealt with at that time

Unfortunaltly I do not have any documents to hand but have requested archieve documents from my then solicitors who dealt with the conveyencing, also from the land registry,truthfully why wouldnt we have wanted to have dealt with it then.....

I have asked the insolvency service but they just dont seem to understand my question they just keep refering to my now trustee appointed in 2004.

Maybe if there was some one on here who is an IP or Trustee they may be able to answer why as a trustee they would not have realised thier interest in 2000 and please be mindfull that 9yrs ago the fees and claims would have been allot less.
Tilly

[Hg]

It's certainly an angle worth considering looking at, but of course what you don't want to do is just rack up even more legal fees ...

[tilly]

Hi Hg
Im doing this investigating myself so no legal fees and if I fianlly get the answers Im looking for then I will continue to do so as litigant in person.
This current matter will be settled what ever todays outcome as we will then have kept the family home,which in turn will allow me to focus,sharpen my pencil and try to get some personal closure,which belive me I need after the past 5yrs.
So when its all over I will contribute my side of the saga to the thread "Life after Bankruptcy" some 20yrs of script.

Thanks for your contribution it has helped
Tilly

[tilly]

Anyone know about Land Registry Rules 1925 sc218-221.
Cheers
Tilly

[tilly]

Hi again if anyone is interested I have found out some more information.

I have now disscoverd the following

In 1990 when I was made bankrupt the OR/Trustee did not register a restriction against my property
In 1995 the same OR/Trustee did register a caution/restriction
(I was notified and did object)
In 1996 a solicitor who was acting for us on another matter made an application to the land regisrty to have the restriction removed.

The process was or is that the land registry notify those 3rd parties on some official document and the respondant has 20 days in which to reply should they have an objection, if no correspondanse is received then the land registry as is their right remove the restriction as marked off.

[tilly]

cont

In 1996 the restriction was removed as the OR/Trustee did not object
In 2000 when we re-mortgaged there were no restrictions.

If the OR/Trustee had objected at that time we would have been able to have settled and at a far lesser sum...
I estimate that with bankruptcy costs, further admin fees, unproven creditor debt even with 6yrs at 8% it would have been no more than £4000, now that's a big difference to the £25,000+ I'm having to find today.

Yes I am bitter, angry,have gone through 5yrs of stress and hardship, unable to go one hr let alone a day with out this in my thoughts and could loose my family home of 21yrs
Well to me it seems obvious I am paying for someones either inefficiency, incompetency or complacency and that someone was a public servant employed through the official receivers office a government funded body.

Tilly

[Hg]

They only lost the restriction, they didn't lose the right to the restriction.

I'm not sure I understand what happened in 2000. You said before that the Trustee was contacted? Were they not?

You might have to be careful how you tread, and there may be something somewhere that says you're not allowed to apply for the removal of restrictions if you're not entitled to have it removed.

Technically, it could also be seen as having been wrong to remortgage the property, as it wasn't yours to remortgage.

[tilly]

Thanks for your reply Hg, the land registry under law were obliged to notify the OR that an application to remove a restriction had been applied for,(by my solicitor) they sent the OR the relevant documentation and the OR had 20 days to object, (the same rules apply today with regard to removal of restrictions), as they did not receive any objection the restriction would automatically then be marked off this was in the summer of 96
I only found this out last week as I had requested all of the land registry files since I purchased the house, there were 4 in total and every single letter, notice of my bankruptcy, bank charges etc were all there. I assumed that this was done in 2000 when we re-mortgaged but I now find that there was no restriction in favour of the OR, because it was not there.
Therefore I still say that the OR was contacted and given the opportunity to realise his interest as all he had to do was to object to the request and then the matter would have been dealt with through our solicitor(who specialised in financial litigation)
Its irrelevant admittedly with regard to today's situation with me now paying the trustee £25k, however the fact remains that there is documentary evidence that contact was made and it could be argued that I attempted to settle my bankruptcy in 1996.....
When you go through hell and don't understand why then all one can do is search for answers, rules are indeed rules but its how they are applied and executed, justices is indeed a dish sometimes served cold and a dish I for one would like to serve.
I cant turn the clock back but will be satisfied when I get the answers and then I can have closure and move on.
Thanks for your replies Hg they really do help me hope you continue.
Cheers
Tilly:)

[Hg]

Hello

I'm not saying they weren't in the wrong, and that this doesn't give you some leverage against them.

It's just that you also need to take care as they will immediately throw it back at you

Did your solicitor state any grounds for applying for the removal of the restriction?

[tilly]

Hi Hg, here are some extracts from the letter the solicitor sent back in 1996

Although we appreciate that:-
"the benificial interest of a bankrupt in property vests in the Trustee who can register a caution to protect his interest"

"We contend that the caution amounts to a serious interference with the rights of the proprietors and should only be allowed to remain on the register for a reasonable time in order to allow the cautioner to take definite action"

"The bankruptcy to which the caution relates was discharged in ** 1993"

So to me the solicitor was offering with out stating that, the matter should have been dealt with prior to this date and in so doing knowing that the Trustee would be notified perhaps giving him that offer to take definate action.

So what do you think Hg?
Tilly

[Hg]

I shall think about it and post a full reply in a few hours. I am in two minds as to whether your solicitor may have overstepped the line of sharp practice and committed an offence.

The one merit in their letter to you is that it is enough to remove the threat of any criminal proceedings against you for remortgaging someone else's house (which, restriction to enforce their interest or not, is effectively what happened and the solicitor clearly admits to knowing it wasn't your house).

[tilly]

Interesting Hg but remember I did not re-mortgage until 2000 when I had no knowledge of any restrictions on the registry and again it could be questioned where was the Trustee between those years.
I certainly had had no contact with them either written or verbal since my bankruptcy, nor was I aware of their claim of vested interest until 1995 when I received my notification from the LR.
Naive I may have been back then, I didn't even realise I had been a discharged bankrupt until 94 when I was asked for my copy of discharge, which I then obtained and genuinely thought that was it, had no reason to believe anything else.

The only reason I ended up instructing a solicitor was that in 96 the bank popped its head up(If I didn't mentioned, the reason for my bankruptcy was due to a business failure), I had given them a personal guarantee and therefore they had not claimed in my bankruptcy(I thought they had...)
Oh and yes they had registered their caution a month before I was declared bankrupt in 1990.
A few years of litigation (no courts )with the bank, which ended in an amicable resolve...hence the remortgage in 2000

Any way I will await your reply and thanks again
Tilly

[Hg]

In general terms, there are two separate aspects to this matter. The restriction and the right to the beneficial interest in the property. The restriction isn't the right itself, it is just an aid to protecting that right. It is a bit like a padlock on a bike. If you have a bike, a padlock helps you keep it. You might forget to lock it one day and that might mean that someone can easily cycle off on it, but it doesn't give them the right to. If you forget to protect the keys someone might unlock the padlock themselves and cycle away. But again, getting the keys didn't give them the right to do this.

I've tried to put together a timeline, which I think is missing a few things. Is it correct? It's missing the appointment and release of the 1st trustee, and whether you bought the property jointly or solely. I'm not clear about the dates the caution and restriction were applied, what happened to the restriction, and whether it was the caution or the restriction or both that your solicitor applied to have removed. I also wasn't clear on who received the notification; the Trustee or the OR (or whether they were the same person at that time). Can you fill these in?

1990 – Petition served
1990 – Caution entered
1990 – Made bankrupt
???? – Trustee appointed
1993 - Discharge
1995 – Restriction entered (despite objection)
1996 – Solicitors letter and application to remove restriction
2000 - restriction removed
2000 – remortgage
2004 – New trustee
2007 – Order for possession

Overall I would say it is not looking good for you. Devil's Advocate would (completely ignoring the things in your favour) say:

- You were made bankrupt and you knew you were bankrupt and you knew that your assets became his

- You were aware that the Trustee was appointed and you were aware that he was interested in the house

- You objected to the restriction, but it was entered anyway. Again; clear knowledge that this was not your asset to deal with.

- Nobody gave you the house back and you didn't buy it back.

- You cannot argue that the solicitors letter was an attempt to settle the matter and pay off the debts. It just wasn't. It didn't say that.

The thing in your favour is the solicitors letter. It is a great aid to getting you off the matter that you've been remortgaging a house that wasn't yours. Normally people could try and argue you couldn't possibly have thought this was possible, but you're probably entitled to think this if a solicitor told you so!

The unresolved things are those I mentioned above my timeline; and some of these are quite important to understanding the matter.

In my opinion your negligence claim is against the worst possible person; your solicitor in 1996.

I can think of more reasons why his letter was a nonsense every time I read it.

- The logic is utterly warped. It appears to suggest your solicitor believes your assets become yours again on discharge. this isn't possible. it's not yours so it's nothing to do with you any more.

- Something that's not yours can only become yours if it is conveyed back to you in a valid contract. A valid contract has a consideration; something given in return for what you receive. You gave nothing; and you received nothing.

- A valid contract cannot be entered into through silence; it has to be entered into through positive agreement. nobody agreed to give you anything. (And in fact, all the times you did hear anything it was that the opposite. They wanted it. They wanted a restriction. They fought your opposition to the restriction, ....)

- A valid contract relating to a transfer of property has to take a specific form of deed. No deed was prepared or executed.

- "Interference with the rights of the proprietor" Interference with what rights of what proprietor? It wasn't yours! You were being allowed to live there, just the same as a tenant is allowed to live in a rental property or a shop keeper is allowed to trade from leased premises. You had no right to do anything with the title. A lay person might say "I was paying the mortgage... ... ...", but there is a wealth of case law that any lawyer who holds themselves out to deal with insolvency matters must know about. It's very well established that in continuing to pay the mortgage the bankrupt is gaining the right to nothing more than to continue to live there while they do so, and that you gain no interest in the property from doing so.

Based on what you have said so far, I don't think you have any hope of getting anywhere with the OR or Trustee. They haven't done anything positive to say you could have anything; they just didn't reply to a letter. The easy presumption and obvious defence would be that they didn't get it because it got lost in the post or a dog ate it, or else they would have replied.

On reflection, the solicitor comes very close to the line for committing an offence. Unless there's specific land registry related offences (I don't know about this area; I do debt, tax and insolvency), he probably didn't commit a crime for the same reasons as I gave in the bike example at the beginning. It's quite probably misconduct though, depending on the advice he gave (or perhaps more important says he gave) alongside his dubious actions.

[tilly]

Hi Hg
I sall try to answer some of your questions and a few more from me..
1990 – Petition served YES
1990 – Caution entered NO
1990 – Made bankrupt YES
???? – Trustee appointed 1990
1993 - Discharge YES
1995 – Restriction entered (despite objection) CAUTION ENTERD UNDER THE PROPRIETORSHIP REGISTER
1996 – Solicitors letter and application to remove restriction YES
2000 - restriction removed NO REMOVED IN AUG 1996
2000 – remortgage YES
2004 – New trustee YES
2007 – Order for possession HEARING LATE 2008

- You were made bankrupt and you knew you were bankrupt and you knew that your assets became his
YES BUT NO, I DID NOT KNOW THAT MY ASSETS BECAME THE OR'S AFTER DISCHARGE

You objected to the restriction, but it was entered anyway. Again; clear knowledge that this was not your asset to deal with.
YES BUT NO COMMUNICATION FROM THE OR WITH REGARD TO MY OBJECTION

The logic is utterly warped. It appears to suggest your solicitor believes your assets become yours again on discharge. this isn't possible. it's not yours so it's nothing to do with you any more.
THE SOLICITOR IN MY OPINION DID NOT SUGGEST THAT THE ASSETS BECCAME MINE ON DISSCHARGE,THEY CLEARLY STATED THAT THEY ACKNOWLADGED THE PROPERTY VESTED WITH THE TRUSTEE TO PROTECT HIS INTEREST,BUT QUESTIONED A REASONABLE TIME FOR THE TRUSTEE TO TAKE ACTION

Based on what you have said so far, I don't think you have any hope of getting anywhere with the OR or Trustee. They haven't done anything positive to say you could have anything; they just didn't reply to a letter. The easy presumption and obvious defence would be that they didn't get it because it got lost in the post or a dog ate it, or else they would have replied
FORM 70J LAND REGISTRY FOR REMOVAL OF CAUTION
NOTE 4.YOUR ATTENTION IS DIRECTED TO RULE 313 OF THE LAND REGISTRY RULE 1925 WHICH IA AS FOLLOWS...
"Every notice sent through the post shall,unless returned by the PostOffice and in absence of evidence of its actual delivery be deemed received by the person addressed within 7 days of its issue exclusive of the day of posting and the time fixed by the notice for taking any step thereunder is to be calculated accordingly"

A few more questions
Q. WHY DID THE OR NOT REGISTER HIS INTEREST IN 1990
Q. WHAT WAS THE PURPOSE OF HIS CAUTION IN 1995
Q.HOW DID HE INTEND TO REALISE HIS INTEREST
Q.WHEN SHOULD HE HAVE REALISED HIS INTEREST AND WHAT STEPS WOULD HE HAVE TAKEN
Tilly

[tilly]

Hg
Sorry I forgot to answer the mortgage/ownership JOINT since 1988

[Hg]

- You were made bankrupt and you knew you were bankrupt and you knew that your assets became his
YES BUT NO, I DID NOT KNOW THAT MY ASSETS BECAME THE OR'S AFTER DISCHARGE

They didn't become his after discharge. They remained his as they were already his and nothing changed. You don't get given any other assets back on discharge from bankruptcy, and you don't get given interest in houses back either.

The logic is utterly warped. It appears to suggest your solicitor believes your assets become yours again on discharge. this isn't possible. it's not yours so it's nothing to do with you any more.
THE SOLICITOR IN MY OPINION DID NOT SUGGEST THAT THE ASSETS BECCAME MINE ON DISSCHARGE,THEY CLEARLY STATED THAT THEY ACKNOWLADGED THE PROPERTY VESTED WITH THE TRUSTEE TO PROTECT HIS INTEREST,BUT QUESTIONED A REASONABLE TIME FOR THE TRUSTEE TO TAKE ACTION

As the law was then, it was up to them how long they took. It was their house; there weren't any laws about how long people had to sell their houses. People could keep their houses as long as they wanted. It already wasn't your house, so you had no more rights over it than you would over whether your neighbours decided to sell their house or not.

More recently, in 2004, it was realised that this could be unfair and time limits (3 years) were introduced. Unfortunately there were none at the time and case law from people trying at the time goes against you. (A lot of people tried to say they got an interest in the house back as a result of paying off the mortgage, and that the Trustee shouldn't benefit from that, just from the increase in value. Nobody really got anywhere.)

FORM 70J LAND REGISTRY FOR REMOVAL OF CAUTION
NOTE 4.YOUR ATTENTION IS DIRECTED TO RULE 313 OF THE LAND REGISTRY RULE 1925 WHICH IA AS FOLLOWS...

Dear Tilly

Yeah, I know that. But I still never got the letter. Honest. It's highly unfortunate and I'm sorry if it's caused you problems.

But you still shouldn't have remortgaged my interest in the house.

Yours etc.

Q. WHY DID THE OR NOT REGISTER HIS INTEREST IN 1990

Who knows! I'd wondered if it might have been because the property was solely owned and no restriction was necessary, but obviously not. Probably because the case went to an IP quite quickly so they expected them to do it? However the situation really is a bit like the unlocked bike I gave above. Even if he didn't register his interest; it was still his.

Q. WHAT WAS THE PURPOSE OF HIS CAUTION IN 1995

To protect his interest in the property. You didn't mention when the 1st Trustee was released. Possibly the 1st Trustee got released having not dealt with the property, so when the OR go the paperwork back he did it?

Q.HOW DID HE INTEND TO REALISE HIS INTEREST

Under the law as it was at the time, that was entirely his business. But presumably by sitting and waiting and seeing if anything ever happened.

Q.WHEN SHOULD HE HAVE REALISED HIS INTEREST AND WHAT STEPS WOULD HE HAVE TAKEN

Under the law at the time it was very well established that there were no time limits. The interest was just no longer yours, and there was no mechanism for it to become yours unless you bought it.

I'm afraid it's quite a mess

[tilly]

Hi Hg
Once again thanks for the reply just to confirm another point you raised from my question
Q. WHAT WAS THE PURPOSE OF HIS CAUTION IN 1995

To protect his interest in the property. You didn't mention when the 1st Trustee was released. Possibly the 1st Trustee got released having not dealt with the property, so when the OR go the paperwork back he did it?

A. The only Trustee/OR I had was the same person in 1990 and that same person who registered the caution in 1995

Q.HOW DID HE INTEND TO REALISE HIS INTEREST

Under the law as it was at the time, that was entirely his business. But presumably by sitting and waiting and seeing if anything ever happened

Q.Hypothetically I could have sold/re-mortgaged between 1993-1995, there were no cautions on the register and therefore no legal entitlement, I could have transferred my interest at that time to my partner or anyone for that matter if done correctly, I would even had been able to have borrowed even as a discharged bankrupt through the sub prime markets.
What would he have done then...?the argument that I should have known that 1/2 the house was his and shouldn't have been sold/re mortgaged would have been fundamentally flawed as there was no documentation to prove otherwise at that time.

Just as there was no registered caution in 2000 when I did remortgage and another solicitor dealt with that conveyancing, so I find it difficult to believe that another solicitor would have knowingly allowed me to re-mortgage a property which was not mine.

Yes you are right Hg it is quite a mess!! one that has cost me dearly and I'm afraid the "JUST BECAUSE THEY CAN OR COULD" does not sit comfortably
Its a bit like the current situation we have today with MPs expenses just because they could didn't mean it was right and look at whats happening to them today.

Any way thanks for your time so far its been interesting to have had your opinion, I have many other questions relating to my situation and even if the answers do not fall in my favour at least its better than no knowledge
Tilly