Q&As

If a notice has been entered on the register of a property in relation to an equitable charge created by an interim charging order (no restriction has been entered), can the registered proprietor register a subsequent legal charge over the property? Will the subsequent legal charge have priority over the equitable charge created by the interim charging order?

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Published on LexisPSL on 19/02/2020

The following Property Q&A provides comprehensive and up to date legal information covering:

  • If a notice has been entered on the register of a property in relation to an equitable charge created by an interim charging order (no restriction has been entered), can the registered proprietor register a subsequent legal charge over the property? Will the subsequent legal charge have priority over the equitable charge created by the interim charging order?
  • Registration of a subsequent legal charge and priority

In response to this Q&A, we have assumed that the registered proprietor is the sole owner of the property, there has not been a transfer of the registered estate since the entry of the notice relating to the equitable charge and the subsequent legal charge was granted for valuable consideration.

Under section 3(4) of the Charging Orders Act 1979, a charge imposed by a charging order takes effect as an equitable charge either:

  1. on the legal estate; or

  2. on a beneficial interest under a trust of land

If it takes effect on the legal estate, it may be protected by the entry of either an agreed notice or a unilateral notice.

If it takes effect on a beneficial interest under trust of land, it cannot be protected by a notice, as a notice cannot be entered in respect of an interest under a trust of land. Instead, it can be protected by the entry of a standard From K restriction.

For guidance on identifying whether it takes effect on the legal estate or a beneficial interest under a trust of land, see Practice Note: Registration of a char

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