Protecting Charging Orders – Guidance from Ashtons’ Dispute Resolution Team

When enforcing a judgment debt, obtaining a charging order is a powerful step, but ensuring it is properly protected on the title is just as important. At Ashtons Legal, our Dispute Resolution team regularly advises on the most effective ways to secure and protect charge orders, giving our clients peace of mind that their interests are safeguarded.

What is a Charging Order?

A charging order allows a creditor to secure a judgment debt against a debtor’s property. Once obtained, the charge sits on the title much like a mortgage, giving the creditor a stake in the property and, in some circumstances, the ability to apply for an order for sale.

It is commonly used where a debtor fails to satisfy a county court judgment and owns, or has an interest in, real property.

The Importance of Registration

A charging order alone does not guarantee protection. To be effective and enforceable against third parties, it must be registered at the HM Land Registry. Without registration, there is a risk that the property could be sold or mortgaged without your knowledge, leaving the debt unsecured.

Two common forms of protection are available: a notice and a restriction.

Restriction: Controlling Dealings

While notices serve to alert third parties to a creditor’s interest in the property, they do not prevent transactions from going ahead. For a greater level of control over how a property can be dealt with, a restriction may be more appropriate.

A restriction can be used to control how a property is dealt with—for example, by requiring that certain conditions are met before a sale or transfer can proceed.

Advantages:

• Provides an additional layer of protection beyond a notice.
• Particularly helpful where the property is jointly owned or held on trust, as it can restrict dispositions without compliance with specific requirements.

Limitations:

• The standard Form K restriction, which is commonly used to protect charging orders, is often insufficient in practice. It simply requires that notice of a disposition is given to the creditor, but it does not prevent a sale from completing or provide a mechanism to stop the transaction.

To address this, we recommend seeking a non-standard Form K restriction, tailored to give the creditor meaningful protection. Although HM Land Registry does not generally accept non-standard wording, it can be approved where the court expressly authorises it. This is best achieved by including a request for such a restriction within the same application to the court when seeking to make an interim charging order final.

For example, we may seek wording that requires the debtor to provide the creditor with at least 14 days’ notice of any proposed disposition. This gives the creditor a crucial window to seek undertakings or apply for an injunction to prevent a sale that would frustrate enforcement.

Without a non-standard restriction, a charging order—if protected only by the standard wording—offers limited practical benefit unless followed up with further enforcement action, such as an order for sale.

How We Can Help

Our Dispute Resolution specialists regularly act for individuals, businesses, and professional creditors in protecting and enforcing charge orders. If you have secured a charging order – or are considering applying for one – we can ensure that the security is properly protected and advise on the best enforcement strategy moving forward.

Our team will:

• Carry out a full review of the title.
• Assess the strength of your position.
• Advise on the appropriate form of protection.
• Act swiftly to secure your position before competing interests arise.

Contact our debt recovery lawyers today

Our specialist Debt Recovery team has extensive experience in resolving the points raised in this article. If you have any questions, please get in touch with our specialist Debt Recovery team by using our online enquiry form or calling 0330 404 0738.