What Is The Registered Charge On A Property?

sarah ryan
Sarah RyanAccount Manager @ Lawhive & Non-Practising Solicitor
Updated on 16th May 2024

A registered charge is like a flag on your property, showing it’s used as collateral for a debt or a loan. 

what-is-the-registered-charge-on-a-property

In this article, we’ll explain what registered charges are, how they work, and why they matter to property owners and lenders. 

Table of Contents

What is a registered charge on a property? 

A registered charge is a legal interest or right registered against a property that serves as security for a debt or loan, giving a creditor certain rights over the property until the debt is repaid.

Lenders often use registered charges, such as banks when providing mortgages; it is a state-backed guarantee of validity, making it the preferred type of security for many lenders.

How does a registered charge on a property work? 

When you take out a mortgage or a loan secured against your property, a charge is registered with the Land Registry, which makes it legally binding and enforceable. 

Typically, the charge will specify the amount of the debt, repayment terms, and the creditor’s rights in case of default. 

Who can register a charge on a property?

Lenders like banks, building societies, or other financial institutions typically register charges on properties when they lend money against them. Individuals may be able to register a charge on a property if: 

  • They lend money to someone and the borrower agrees to use their property as security.

  • Someone owes them money and they agree to secure the debt against their property. 

  • In divorce settlements, if a spouse agrees to transfer property ownership to the other spouse but retains a charge on it to secure payment of a financial settlement or ongoing maintenance payments. 

  • They win a court judgment against someone and fail to pay as a way to enforce the judgment and recover the debt. 

Registering a charge on a property usually requires the services of a solicitor to ensure compliance with legal requirements and registration. 

Types of registered charges

Types of registered charges that can be placed on a property include: 

  • Mortgages

  • Equitable charges

  • Fixed charges 

  • Floating charges

Mortgages

These are the most common types of registered charges and is used when a property is used as security for a loan. 

Equitable Charges

These are used when a property is used as security for a debt but is not registered with the Land Registry. They are legally enforceable but may have different implications compared to registered charges. 

Fixed Charges

These charges are fixed against a specific property and take priority over other charges or interests. 

Floating charges 

These charges float over a company's assets and only become fixed if certain events happen, like insolvency. 

How does a registered charge affect property owners?

Having a registered charge on your property means that you have borrowed money against it and must repay the debt as per the agreed terms. Failure to do so can lead to the creditor taking legal action to enforce their rights, which may include repossession and sale of the property to recover the debt. 

It’s likely that day-to-day, you’ll give no thought to a registered charge on your property. However, if there is a registered charge on your property and you want to do certain things with it (like rent it out), you must check if you need to get your lender’s permission to do so.

Registered charges only enter people’s minds when they sell their property or switch mortgages. This is because they need to repay the remaining debt to have the charge removed, otherwise, they won’t be able to sell up or switch. 

What is the difference between a registered charge and a mortgage? 

All mortgages are registered charges, but not all registered charges are mortgages. 

A registered charge is a broad legal term covering any legal interest or right registered against a property to secure a debt or obligation.

Mortgages are a specific type of registered charge that arises when a property is secured for a loan or debt. In a mortgage arrangement, the borrower retains legal ownership of the property but grants the lender certain rights if they default on the loan.

Can I sell my property if there’s a registered charge on it? 

You can sell your property if there’s a registered charge on it.

Your lender, who has the charge as security for your loan, might have rules about adding more charges without their permission.

When you sell, your conveyancer (the person who helps with the sale) will make sure any restrictions are sorted out. If there's a restriction that doesn't specifically relate to the charge being paid off, your conveyancer will take steps to remove it so the sale can happen smoothly.

Can a charge be registered on a property if the land is not registered at the Land Registry?

If the land isn’t registered at the land registry, creating a legal charge usually means the owner must register both the land and the charge. 

Can multiple charges be registered on a property? 

You can register multiple charges against your property, but many lenders limit borrowers from taking out a second mortgage. 

If you're seeking additional funds secured by a second charge, you may need approval from your current lender. They'll assess your ability to manage both loan repayments. Additionally, they may ask your new lender to sign a deed of priority, outlining how they'll handle the property and divide sale proceeds if needed. 

In practice, some borrowers opt to increase their existing mortgage rather than negotiate a second charge.

If I lend money, can I secure it with a registered charge?

You can secure a loan with a registered charge against the borrower's property. This means the borrower gives their property as security for the loan, giving you certain rights over it until the debt is repaid.

However, if you're lending money for commercial purposes you may need authorisation from the Financial Conduct Authority (FCA). 

If you're lending money to a company, the charge must also be registered at Companies House within the statutory time limit to be valid.

It's essential to follow legal procedures and register the charge with the Land Registry to ensure it's legally enforceable. Working with a solicitor experienced in property law can help ensure the process is carried out correctly.

Should I register a charge if I’m lending money to a family member or friend?

If you’re lending money, registering a charge ensures that if the borrower defaults, you have a legal claim against the property to recover what you’re owed. 

Whether you register a charge when lending money to a family member or friends depends on how confident you are of their intention to pay it back and the dynamics of your relationship. Money matters can strain relationships, and registering a charge may add a layer of formality to the agreement that could imply a lack of trust. 

Instead of registering a charge, you might consider alternative arrangements, like a personal loan agreement. While this may not provide the same level of security as a registered charge, it still establishes a legal obligation for the borrower to repay. 

In any case, if you’re lending money in any capacity, it’s advisable to speak to a financial advisor and a solicitor before making a decision. They can guide on the best course of action and help you understand the legal implications of registering a charge. 

How do I register a charge on a property? 

To register a charge on a property, you must complete the necessary forms and submit them to the Land Registry, along with any required supporting documentation and fees. The Land Registry will then update the property’s title register to reflect the charge. 

How long does it take to register a charge on a property? 

It can take anywhere between 1 day and 10 weeks for the Land Registry to make changes to existing titles, including updating charges against property, however, the legal interests of applicants are protected from the moment the Land Registry receives the application. 

Does registering a charge affect ownership of a property? 

Registering a charge doesn’t affect property ownership per se, but it does create a legal interest in the property for the lender. This means the charge will have to be repaid before it is removed. 

Can I remove a charge from my property? 

A registered charge on a property can be removed once the debt secured by the charge has been repaid. This typically involves the lender providing a “discharge” or “release” of the charge, which you then register with the Land Registry to remove it from the property’s register. 

Can someone put a charge on my property without me knowing? 

A charge can be placed on a property without you knowing, although it is rare. Given that one of the most common charges is mortgages, you are likely to know this is going to happen and will have received independent legal advice beforehand. 

Get help with registering a charge on a property

At Lawhive, our network of expert property lawyers is on hand to guide you through the process of registering a charge.

Whether you're a lender looking to secure a loan or a property owner seeking to understand your rights, our solicitors are here to provide fast, affordable legal advice.

Contact us today to schedule a free case evaluation with our Legal Assessment Specialists and get a fixed-fee quote for the services of a specialist property lawyer.

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