Property Chamber First Tier Tribunal judgement missing the point

[UNRAM]

I recently made and withdrew an application to the Property Chamber to challenge the validity mortgage deed based on in CAG and I was forced into a situation where I had to pay a lender thousands of pounds in arbitrary "legal charges" before a hearing and was threatened with more to come if I didn't withdraw my application and pay the charges. This all happened the day before their deadline to commit a response to my Chamber application and I ended up losing thousands of pounds with no hearing. The only online record of the hearing I can find is here: http://www.lightfoots.co.uk/about-us/news-and-subscribe/item/196-a-charge-in-deed by one of the solicitors representing a lender. I will include this in a post below in case it gets lost or removed. It appears that none of the points made in the original thread nor in the template application were actually considered in the judgement. On the issue of mortgage by demise I signed a charge by way of a legal mortgage deed with "Full Title Guarantee" which according to this definition http://uk.practicallaw.com/8-107-6622?service=property is a full disposal of the property (i.e. its bricks) not disposal just a certain set of rights. The judge said that there was no mortgage by demise but a legal mortgage with Full Title Guarantee IS A MORTGAGE BY DEMISE for all intents and purposes. On the issue of statutory formalities there was no mention by the judge of a lenders duty to sign a deed where there is an obligation for further advances and the fact that there is a requirement for a lenders signature on the land registries CH1 form in this instance. Why also was there no discussion of the very clear instruction of the LRA2002 section 91 para 4 which clearly states the requirement for a lenders signature on a deed? Here it is black and white: http://www.legislation.gov.uk/ukpga/2002/9/section/91. Is it simply the case the judge missed that little bit of legislation or that somehow the deed was not stored electronically? These hearing appeared to be a complete whitewash of the facts and statutes by a judge who seemingly did not understand the rules nor the statute and I understand that the CAG has been actively attempting to prevent all further discussion on the issue. I personally lost £thousands and I didn't even reach a hearing and I understand that others did too on an issue that is very clearly unresolved. I would value the objective opinions of experienced professionals on this issue...

[UNRAM]

http://uk.practicallaw.com/8-107-6622?service=property

 

Full title guarantee

 

 

• Resource type: Glossary item
  
• Status: Maintained
  
• Jurisdictions: England, Wales
  

 

One of the two key phrases used to imply covenants for title under the Law of Property (Miscellaneous Provisions) Act 1994 in an “instrument effecting or purporting to effect a disposition of property” (section 1(1)). The other key phrase is limited title guarantee. Full title guarantee implies that:

 

• The disposing party has the right to dispose of the property (section 2(1)(a)).
  
• The disposing party will do all it reasonably can to give the title it purports to give, at its own cost (section 2(1)(b) and (2)).
  
• If the property being disposed of is registered, there is a presumption that the whole of the property in the registered title is being disposed of (section 2(3)).
  
• If the property being disposed of is not registered, there is a presumption that the interest being disposed of is the freehold. If it is clear that the interest is leasehold, it is presumed that the interest is the unexpired residue of the term of the lease (section 2(3)).
  

[UNRAM]

http://www.lightfoots.co.uk/about-us/news-and-subscribe/item/196-a-charge-in-deed

 

Here is the text in full just in case it disappears from the web. I couldn't see a copyright on in it so I see no harm in copying it in full for a public forum. I will be happy to remove it immediately upon request.

 

"There has been a recent proliferation of claims made by borrowers to the effect that the charge upon their mortgaged property is defective. Many of the claims have been fuelled by internet forum sites which set out the alleged legal basis upon which it is argued that the charge is defective.

 

A number of these cases have come before the Property Chamber First-tier Tribunal, Land Registration Division and on 20th January 2014 Judge Ann McAllister heard two co-joined cases, Mr & Mrs Sinclair v Accord Mortgages Limited and Mr & Mrs Overson v Southern Pacific Mortgage Ltd t/a London Mortgage Co, as test cases for the numerous other cases awaiting hearing.

 

As stressed in the Judgment, both loans and mortgages were straightforward transactions, whereby the borrowers had made applications for loans to the two lenders, where offers were made, the borrowers signed standard form Deeds and the money was advanced to the borrowers' solicitors and ultimately on to the borrowers. In both instances, and using very similar terminology in both pleadings and skeleton arguments, the borrowers sought to argue that the charges, registered with the Land Registry against the borrowers Titles, were invalid.

 

Judge McAllister, having stated that she found the arguments put forward by the borrowers difficult to follow, summarised them as follows:-

 

"...firstly, it is said that the Applicants have no power to create mortgages 'by demise': secondly it is alleged that the charges are invalid for want of compliance with statutory formalities, including he assertions that the charges were no 'delivered, and thirdly it is said that the effect of securitisation of their loans somehow renders the charges invalid."

The Demise Point

 

A mortgage by demise is now an almost obsolete form of mortgage, whereby the property is actually conveyed to the lender, usually under a very long lease and is then conveyed back to the borrower upon redemption. Although not expressly stated in the judgment, it is probably correct that a mortgage by demise is no longer permissible, in that it is specifically excluded as a means of disposition under the Owners' powers as derived from s.23(1) of the Land Registration Act 2002. However, the effect of ss. 51 & 132 of the 2002 Act is that whether the mortgage is created by the usual method of executing a charge by deed by way of legal mortgage or by charging the estate with payment of money, on completion by registration the charge takes effect as a charge by way of legal mortgage, albeit that it only takes effect when registered (s.27).

 

Both the mortgage Deeds in this case are expressed to be charges by way of legal mortgages and they were not and did not purport to be mortgages by demise. The assertion that the charges were invalid because they were mortgages by demise was therefore held to be simply unsustainable.

 

The Statutory Formalties Point

 

The borrowers both sought to attack the validity of the charge by stating that the Deed which created it was not valid because it had not been signed by the lender, was not delivered and was in fact a contract for a Deed and not a Deed itself because of the 'gap' between execution and registration.

 

Although many lenders use their own standard form of wording for a Deed or the Land Registry's form CH1, there is no statutory prescribed form for creating a charge. The statutory formalities for creating a charge are therefore limited to it being created by Deed and that for the Deed to be valid it must be signed, attested and delivered by the person creating the Deed. It is by its very nature a unilateral act and does not therefore need to be signed by the lender. Neither does delivery mean 'handing over' the document but rather that the transaction to which the Deed relates is irreversible, so that it is also a unilateral action by the creator of the Deed showing that he intends to be bound by it. The Judge held that in these two transactions, as in every other similar and unremarkable transaction, the borrowers plainly intended to be bound by their Deeds, in that they accepted mortgage offers conditional upon charges being granted over their Properties, handed the Deeds to their solicitors who in turn passed them to the lenders and accepted the loans.

 

It was therefore held that the charges were properly executed as Deeds by the borrowers and that there was no merit whatsoever in the points taken.

 

The Securitisation Point

 

This point was dealt with very shortly. The fact that the equitable interest in the loan may have transferred to a securitisation company was found to be irrelevant. There was no evidence that the sale had been perfected by the transfer of the legal title and the lender remained the registered proprietor of the mortgage and as such entitled to enforce it. Although not referred to in the Judgment, this follows the findings of the Court of Appeal in Paragon Finance Plc v Pender [2005] EWCA Civ 760.

 

In dismissing both applications (and presumably now the other applications pending in the First-tier Tribunal) the Judge ordered that the Applicants should pay the costs. Although this may not necessarily deter other borrowers from bringing specious and unmeritorious claims seeking to challenge the validity of their mortgages, it is hoped that it will be a salutary lesson that such applications do come at a cost. The real harm however would seem to be the proliferation of internet sites that propagate challenges based on legal 'jargon' that is difficult for even High Court Judges to follow and which beguile borrowers into believing that they can make these challenges. Lenders need to be robust in defending these challenges and protecting their security."

[UNRAM]

On the securitisation point: why was there no reference made to the fact that lenders are selling properties to SPV's with full title guarantee? i.e. selling bricks and mortar not just beneficial (or whatever) interest?

[caro]

I recently made and withdrew an application to the Property Chamber to challenge the validity mortgage deed based on in CAG and I was forced into a situation where I had to pay a lender thousands of pounds in arbitrary "legal charges" before a hearing and was threatened with more to come if I didn't withdraw my application and pay the charges. This all happened the day before their deadline to commit a response to my Chamber application and I ended up losing thousands of pounds with no hearing. The only online record of the hearing I can find is here: http://www.lightfoots.co.uk/about-us/news-and-subscribe/item/196-a-charge-in-deed by one of the solicitors representing a lender. I will include this in a post below in case it gets lost or removed. It appears that none of the points made in the original thread nor in the template application were actually considered in the judgement. On the issue of mortgage by demise I signed a charge by way of a legal mortgage deed with "Full Title Guarantee" which according to this definition http://uk.practicallaw.com/8-107-6622?service=property is a full disposal of the property (i.e. its bricks) not disposal just a certain set of rights. The judge said that there was no mortgage by demise but a legal mortgage with Full Title Guarantee IS A MORTGAGE BY DEMISE for all intents and purposes. On the issue of statutory formalities there was no mention by the judge of a lenders duty to sign a deed where there is an obligation for further advances and the fact that there is a requirement for a lenders signature on the land registries CH1 form in this instance. Why also was there no discussion of the very clear instruction of the LRA2002 section 91 para 4 which clearly states the requirement for a lenders signature on a deed? Here it is black and white: http://www.legislation.gov.uk/ukpga/2002/9/section/91. Is it simply the case the judge missed that little bit of legislation or that somehow the deed was not stored electronically? These hearing appeared to be a complete whitewash of the facts and statutes by a judge who seemingly did not understand the rules nor the statute and I understand that the CAG has been actively attempting to prevent all further discussion on the issue. I personally lost £thousands and I didn't even reach a hearing and I understand that others did too on an issue that is very clearly unresolved. I would value the objective opinions of experienced professionals on this issue...

 

CAG has actively been trying to avoid people losing thousands of pounds, as I'm sorry to hear that you have. Indeed there was considerable discussion on cag to allow suggested arguments to be fully examined to see if there was any merit in them.

 

To encourage others to follow a similar route would be foolhardy and irresponsible, not to mention pointless. Following extensive discussion on cag, and the tribunal decision there is really nothing more to add, hence the closure of isitme's thread once the decision was published.

 

I really am very sorry that you lost out due to theories that proved to have no merit.

[UNRAM]

caro did you actually read what I wrote? the assessment? its a complete whitewash and you are insisting that there is no merit? whats the story here please? LRA2002 section 91 paragraph 4. hello?

[UNRAM]

why are you sorry i have lost thousands? you don't know me nor my situation? you don't know the details under which i was subjected to ongoing and extortion under very distressing circumstances. are you suggesting you actually authentically care about my situation? i do not have any space nor time for false sentiment. why is further discussion being shut down? are you (and others) not here simply to moderate discussions? proved to have no merit? nothing was proved... a glance over the assessment by lightfoot and co. demonstrates this very clearly.

 

also: who is trying to encourange anything? is this not a discussion forum?

[UNRAM]

are you now going to shut down this thread despite the fact that the law clearly and unambiguously states that a lender's signature IS REQUIRED and that a full title guarantee is a bricks and mortar disposal?

[caro]

If you're happy to lose thousands then good for you, bit I'm at a loss to imagine why you should be.

 

The story is that months of time and effort was spent looking into the issues raised which proved fruitless. I genuinely wanted no-one to lose out, except the banksters and lawyers.

 

Better for everyone to put time and effort into finding ways that will help people.

 

I have nothing else to say on the matter.

[UNRAM]

happy to lose thousands of pounds? how on earth have you come to that conclusion?

 

am i correct to think you are also shutting this thread down?

 

if so,

 

please may i ask who gives you the authorisation to do so.

i would like to communicate directly with the proprieters of this site.

can you advise how i may contact them.

[UNRAM]

the end of this story (for now) is that the judge was obviously overwhelmed by the information presented and missed the glaringly obvious.

[Lea_HTH]

It's not the judge who missed the point - it's the posters who spent months encouraging people like you to do exactly what you did, risking costs amounting to thousands.

 

Proper advice, and correction of the wrong information posted, was given, the latter done consistently by Ben, the former I stated at least on two separate occasions, and probably several more on other threads.

 

The arguments put forward in that thread had no merit whatsoever, and those of us who work in the field knew it, and sat back to await the judgment.

 

No one wanted to see anyone lose money, but you were warned, and then forgot to be forearmed. It's your own fault if it cost you thousands. You should have used the tried, tested and proven route.

 

Your story merely serves as a warning to other people who think they can get out of paying their mortgages by finding some fault with something somewhere along the line - if the law fails, equity will always win in a court of law.

[citizenB]

happy to lose thousands of pounds? how on earth have you come to that conclusion?

 

am i correct to think you are also shutting this thread down?

 

if so,

 

please may i ask who gives you the authorisation to do so.

i would like to communicate directly with the proprieters of this site.

can you advise how i may contact them.

 

Scroll right down to the bottom of any page and you will see the "Complaint" button in the blue bar along the bottom of the page.

 

Alternatively, send an email to .. [email protected] ... (no spaces).

 

Caro is Site team/Moderator which gives her all the authorisation that is required. Please read the Forum Rules.

 

Until such time as you have made your complaint and we have had confirmation from the "Proprieters" of the site, then I am closing this thread. Any attempts to start another thread on the same issue will also be closed at which time a moderation will be placed on your account.