My own understanding - and I am no expert - is that they will have to first demand repayment
However, the very obvious issue (based on what you have told us) is proving that this was a loan and not a gift.
Generally a gift comes out of a persons capital, not by raising a mortgage on their own home. The parents added to their own small mortgage to raise the 50k, so as to allow the son to have a deposit. Folks in their 50's don't do this lightly but with onset of funders withdrawing high ltv mortgages, it was the only option. You know the way things are. You give a child help in getting on the propery ladder, and when he makes money from base rung, you;d naturally expect him to repay some of the capital sum when cashing in on the subsequent sale. For anyone involved in flat purachases two years ago, they were being offered at discounts of say 10-15% (in retrospect perhaps not the best description)
Why do you think they would they have the right to put a charge on the property?
They gave money to their son, without a loan agreement. If the son hasn't been following the "agreed" repayments etc then they can follow the normal recovery process but will potentially struggle to some degree because of the lack of any formalised agreement.
In law, a contract can be implied and not necessarily written. By extrapolation, surely a loan arrangement can be the same. The gift the parents were making were the interest payments on the mortgage drawdown they secured to finance the deposit, not the original capital sum.
You could put a unilateral notice on the property which would stymy any move to change the ownership of the property. The unilateral notice has to state in what capacity the person applying has an interest in the property. You could argue that as a contributor to the purchase price they have a beneficial interest in the sale proceeds on the basis of their contribution. That's what I'd argue in any event.
The notice can be removed by the proprietor with evidence that no such interest exists in the property (potentially they would argue the £50k was a gift and there was no intention for the contributor to have an interest). However, in the first instance, I would apply to put the unilateral notice against the property. The form is on the Land Registry website and is fairly straightforward. There's a fee payable of £40 or so, although this may have increased since the last time I applied for one earlier this year.
That is the aspect I was enquiring into. I've had a situation in the past where a friend purchased land with two associates from a neighbour for say £300k instead of the OMV of £400k. The discounted amount was to be compensated for by giving the "land vendor" one of the apartments at a £100k discount when they were ultimately sold. Effectively on completion of the newbuild he was getting his 400k, but it was by side letter, so Capital Gains Tax was reduced, and he had first shout on the place, and therefore good advertising of "already selling". Within a week of the conveyance he registered a charge, which as MrMichael states stymied not just the subsequent reconveyancing, but also needed explained in the development finance application. In this case, its been two years, so the original query was asking about time limits for such charges.
If they believe the money was a loan and not a gift they would have to issue proceedings against their son to obtain judgment and they can then get a charging order. Possibly better for them to try and resolve the differences between them than take this route though.
It was more of an investment than a loan due to the nature of the parents willing to pay the interest on the capital transferred, but no parent wants to issue proceedings against their child.
The real issue is that they wouldn't mind writing the 50k off, if it was there son who was getting the benefit, but are adamant that his bride will not be profiting from them.
