Charging Order on Property UK — Landlord Guide

How a Charging Order Works

The Charging Orders Act 1979 ss.1-3 provides the statutory framework. Once a judgment creditor has obtained a county court or High Court judgment against a debtor, they can apply to the court for a charging order on the debtor's interest in land. The court makes an interim charging order ex parte (without notice to the debtor). This is then served on the debtor and any co-owners, mortgagees, and HM Land Registry. The debtor can attend a full hearing to oppose the order, raising matters such as personal circumstances and the impact on family members. The court, in exercising its discretion, must consider all the circumstances. If the full charging order is made, the creditor must register it at HM Land Registry — it takes effect as a charge against the property in the charges register, ranking behind any prior registered mortgages.

• Charging Orders Act 1979 s.1: court may make a charging order on a judgment debtor's interest in land or securities to secure a judgment debt
• Interim charging order: made ex parte; served on the debtor, co-owners, mortgagees, and HM Land Registry
• Full hearing: debtor can oppose at the return date — court weighs all circumstances including debtor's personal circumstances and any co-owners' interests
• Registration at HM Land Registry: charging order registered as a notice in the charges register of the debtor's title — essential to preserve priority
• Priority: ranking after prior registered mortgages and other charges; concurrent charging orders rank in order of registration

Applying for a Charging Order Against a Tenant

Landlords who have obtained a county court judgment (CCJ) against a tenant for rent arrears, dilapidations, or other claims can apply for a charging order against the tenant's property. The practical requirement is that the tenant actually owns property with equity — if the tenant is a mortgaged homeowner, any equity above the mortgage(s) and any prior charges is available to satisfy the charging order. The application is made to the county court (or High Court for debts over £5,000 where CPR PD 70 applies). The landlord needs: the CCJ or court order; the debtor's name and address; and, ideally, the title number of the debtor's property (obtainable from HM Land Registry for a small fee). Once the charging order is secured against the property, the debt is secured — it must be paid on any subsequent sale or remortgage of the property.

• Prerequisite: CCJ or judgment against the tenant must already be in place — charging order cannot be obtained before judgment
• Tenant must own property: charging order is against the tenant's land — requires that the tenant is a property owner with equity
• Application: county court (N379 form); for debts over £5,000 or where existing High Court proceedings, apply to High Court
• HM Land Registry title search: obtain the title number for the debtor's property (£3 online search) — include in the application
• Effect on sale: once registered, charging order must be discharged on any sale or remortgage of the debtor's property — landlord receives payment from the proceeds

Order for Sale — Enforcing the Charge

A charging order alone does not force the sale of the property. To compel a sale, the creditor must make a further application — an Order for Sale — under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) s.14. This is a more significant step: the court must balance the creditor's interest in recovering the debt against the interests of co-owners (e.g., a spouse or partner who is not the judgment debtor) and any children living in the property. For residential family homes, courts are generally reluctant to order an immediate sale where it would deprive innocent family members of their home — particularly where the debt is relatively small compared to the equity. However, where the debtor is the sole owner, the court is more likely to order sale. The court can also make a Mesher order (postponing sale until the youngest child reaches majority) or other conditional orders.

• Order for Sale: separate application under TOLATA 1996 s.14 — charging order does not automatically compel sale
• Court discretion: court balances creditor's interest against interests of co-owners and children in occupation — reluctant to order immediate sale of family home
• Sole owner: where the debtor is the sole owner with no family members in occupation, courts more readily grant an Order for Sale
• Mesher order: court can postpone sale (e.g., until youngest child is 18 or leaves full-time education) — common in family home scenarios
• Practical outcome: for small debts relative to the equity, an Order for Sale is rarely worthwhile — the legal costs may exceed recovery; charging order alone as 'mortgage on judgment' may be sufficient

When a Charging Order Is Placed on Your Property

A landlord's own property may be subject to a charging order if the landlord has a judgment debt — for example, from a trade creditor, a tax authority, or from litigation. The charging order prevents the landlord from selling or remortgaging the property without first discharging the debt. It does not prevent the landlord from continuing to use the property as a rental investment, receiving rent, or managing it. However, if the landlord wants to sell, the conveyancer must report the charging order and the proceeds of sale will need to pay it off. A charging order is visible from the HM Land Registry title register — prospective buyers and lenders will see it. To remove a charging order: pay the underlying debt in full and obtain a court order discharging the charge; or, if the debt is disputed, apply to set aside the original judgment.

• No restriction on use: a charging order on the landlord's own property does not prevent continued letting or receipt of rent — only sale and remortgage are affected
• Visible on title: charging order registered as a notice in the charges register — visible to any buyer, lender, or solicitor doing a title search
• Sale proceeds: on sale, the charging order must be satisfied from the net proceeds before the seller receives any balance
• Remortgage: existing mortgage lenders may take a neutral view; new lenders may decline if the charging order is to their security property
• Discharge: pay the debt in full, obtain a court order and apply to HM Land Registry to remove the notice; solicitor handles the administrative process

Insolvency, Joint Ownership, and Scotland

Where the debtor is or becomes bankrupt, different rules apply. The Insolvency Act 1986 s.346 provides that a charging order obtained within 3 months before the insolvency petition is vulnerable to being set aside on the application of the trustee in bankruptcy. Where the property is jointly owned, the charging order attaches to the debtor's beneficial share only — not the co-owner's share. The co-owner can continue in occupation and cannot be forced to sell solely by the charging order (TOLATA 1996 s.14 balancing exercise required). In Scotland, the equivalent of a charging order is an inhibition registered against the debtor in the Register of Inhibitions, preventing voluntary dealings with land. A creditor can then raise an action for adjudication — a more complex process than the English charging order regime. Scotland does not use the Charging Orders Act 1979.

• Insolvency Act 1986 s.346: charging order obtained within 3 months of insolvency petition may be set aside by trustee in bankruptcy — risk if debtor is in financial difficulty
• Joint ownership: charging order attaches to the debtor's beneficial share only — co-owner cannot be forced to sell without a TOLATA s.14 Order for Sale application
• NI: Charging Orders (NI) Order 1985 provides the equivalent regime in Northern Ireland — broadly similar to the England and Wales position
• Scotland: no Charging Orders Act 1979; creditors use inhibition (Register of Inhibitions) to prevent voluntary land dealings, then raise adjudication for formal charge — a different and more cumbersome process
• Wales: same as England under the Charging Orders Act 1979 — no separate Welsh legislation

Frequently asked questions