September 19, 2014

An Order Charging Land is one of the Orders available to a creditor when enforcing a Judgment through the Enforcement of Judgments Office (EJO).

To obtain an Order Charging Land, a creditor must have already lodged a full enforcement application and paid the fixed fee to the EJO, the fee being based on a sliding scale depending on theamount of the claim.

To obtain an Order Charging Land, the debtor must be the owner of property within Northern Ireland and this can be found out either by way of an Enforcement Report application whereby the debtor is interviewed by an Enforcement Officer as to their assets and liabilities, or by carrying out searches in the Land Registry or Registry of Deeds.

Once it has been established that the debtor is the owner of property, the EJO will make a Notice ofIntention to make an Order Charging Land which is served by the EJO on both the debtor and the creditor. The Notice gives the debtor, or any other party with interest in the property, an opportunity to object to the Order Charging Land being made. If an objection is lodged, it will be automatically listedbefore the Enforcement Master for hearing.

Once the full Order Charging Land is made by the EJO, it is provided to the creditor, or creditor’sSolicitors and it is then up to the creditor to register the Order Charging Land with either the Land Registry, or Registry of Deeds, as appropriate.

There are fixed fees for registering the Order Charging Land and an amount is added by the EJO tothe enforced Judgment debt to cover the expenses of registration and is included in the total amount claimed in the Order Charging Land.

Once the Order Charging Land is registered then it effectively places a Charge on the property or land which allows the creditor to be paid once the property is sold, provided that there is sufficient equity in the property once all prior charges have been dealt with. If there are joint owners then this may also reduce the security available to the creditor

Interest is also recoverable on Orders Charging Land currently at a rate of 8% per annum from the date of registration until the date of payment. It is important to note that the Order Charging Land will  become void 12 years following the date of Judgment, not the date of registration and cannot be renewed.

The Order Charging Land will therefore sit on the property for 12 years following the date of Judgment unless the property is sold within this time, or unless the creditor takes further action to enforce the sale of the property. To force a sale, the creditor must first of all obtain permission from the Enforcement Master by way of an Order for Liberty to Exercise Power of Sale.

Once the Power of Sale has been granted then the creditor can apply through the High Court for an Order for Vacant Possession. The Enforcement Master can postpone the creditor’s power of sale, for example, where an early sale would cause severe hardship to the debtor’s family.

An Order Charging Land is one of the most common Orders granted by the EJO.

Bankruptcy can affect an Order Charging Land especially when a Bankruptcy Order is made close tothe time when a creditor is obtaining an Order Charging Land and registering the Order. An Order Charging Land will be void if, within 28 days after the date of registration of the Order Charging Land, the debtor is adjudged Bankrupt, or notice of Bankruptcy is served on the creditor of a Bankruptcy Petition filed against the debtor and a Bankruptcy Order is made thereafter.

It is therefore sensible to proceed as quickly as possible with obtaining Orders Charging Land where a creditor has knowledge of the debtor’s interest in property to avoid any Order Charging Land becoming void due to the debtor’s Bankruptcy.

Should you have any queries about the contents of this article, please do not hesitate to contact Charles Stuart, Paralegal, Cleaver Fulton Rankin on 028 9027 3141

Please note; the content of this article is for information purposes only and further advice should be sought from a professional legal advisor before any action is taken.
Please contact Cleaver Fulton Rankin on 028 9027 3141 or alternatively visit www.cfrlaw.co.uk