Frequently asked questions
These are some of our most frequently asked questions from legal advisers. Most questions can be answered by our Mortgage Instructions which are by reference to the CML Lenders' Handbook.
If you have any questions that are not covered by our Mortgage Instructions and are not listed below, write to the issuer of the Mortgage Instructions/Offer summarising the legal risks and advise what should be done to protect our interest. You should not complete the mortgage until you have our further instructions.
Will you accept a second charge when the mortgage offer states that a charge presently secured on the property is not to be repaid?
No. Our Mortgage Instructions are quite specific - we require you to obtain a fully enforceable first legal mortgage on our behalf. If a mortgage offer states that a charge currently registered in priority to ours need not be repaid then that charge must be postponed to our interest.
Will you accept a Deed of Postponement/Ranking Agreement sent to me by the Second Chargeholder?
We have our own standard form of Deed of Postponement which must be used. Our standard form provides that the definition of 'Accord Mortgages' includes its successors in title whereas this provision is usually omitted from other lenders' forms of Deeds of Postponement. Inclusion of such a provision is essential to enable us to include the mortgage account to which it refers in a Securitisation/Covered Bond project should we so wish.
The Second Chargeholder insists on its own Deed of Postponement/ Ranking Agreement being used, is this acceptable to you?
If a Second Lender insists on its own form being used then our Group Legal Department will need to see the Deed of Postponement and it should be sent to them at Yorkshire House, Yorkshire Drive Bradford BD5 8LJ (fax: 01274 390965) together with a letter indicating whether you consider our interest would be affected by the terms of the Deed having particular regard to the answer to the question above. Usually we would only agree to using another form of Deed if it included provisions necessary to protect our interest and you confirmed as our instructed legal adviser that by using this deed our interest would not be affected.
Are you prepared to lend on a property in the absence of planning consent/building regulations approvals for previous alterations?
We use valuers and not surveyors to carry out a valuation of the property to form security for the loan. However we will refer this issue to the valuer to ascertain whether the lack of planning authority consents affects their valuation. However this is not purely a valuation issue but also a legal one on which you must recommend a course of action. Our Mortgage Instructions require you to ensure that there is nothing which would make the property the subject of enforcement action (section 5.3 CML Lenders' handbook) and so you must advise us on what can be done in order for you to be able to submit a clear Certificate of Title.
Can I proceed if an Indemnity Policy is in place in the absence of planning consent/building regulations approvals for previous alterations to the property?
We rely on you to be satisfied that the policy provides a solution to the difficulty identified and to approve the policy on our behalf - we require you to recommend a course of action in connection with the legal issues surrounding the lack of planning authority consents. However, lack of these consents also raises a valuation issue because where it is clear that such alterations have been made our valuer will have valued the property on the basis that all necessary consents have been obtained. We will need to refer the issue to the valuer for confirmation that lack of necessary consents will not affect the valuation.
Do you have any specific requirements in respect of Indemnity Policies? Should any policies be sent in for approval?
Please don't send the policy to us - we will not review it. Our Mortgage Instructions which refer to section 9 of CML Lenders' Handbook set out our requirements and make it clear that we expect you to approve the policy on our behalf.
My clients have obtained planning permission to develop part of the garden of the security property and now have a buyer for it. What are your requirements?
Initially you should contact our Existing Customer Team with a plan showing the extent of the security property and the piece of land which is to be sold. Our Existing Customer Team will then contact the borrower - it will be necessary for us to instruct a valuer to assess whether the release of the garden area will affect our security.
If our security is unaffected then the Mortgage Service department will instruct you to prepare a discharge of the mortgage over the relevant piece of land and will arrange for its execution. However, if the proposed sale affects our security then the Mortgage Service Department will also confirm the amount of the capital repayment which will be required to enable the piece of land to be discharged from the mortgage. Depending upon the terms of your clients' mortgage product early repayment charges may be triggered by the capital repayment.
Please note that we charge a fee for an application for the release of property from our security and your clients should consult our Loans Administration Fee Tariff for the current fee.
My clients intend to purchase a land adjoining their property to increase the size of their garden, do you require a mortgage over this additional land?
Where an existing borrower is purchasing adjoining land or property which will be incorporated into the security property (this is irrespective of the purchase monies being provided with the assistance of an additional loan from the Society) e.g. to incorporate the neighbouring house to make a larger dwelling or a piece of land to make a larger garden, then we require a first legal mortgage over that land or property. You must use our standard form. For England & Wales, this is the Mortgage on Additional Property Deed. For Scotland, it is the Standard Security Additional Security Deed. There is no standard form for use in Northern Ireland where we rely on our legal adviser to prepare a suitable Deed.
In all cases, we will require you to confirm to us that title to the adjoining land or property is good and marketable in accordance with the provisions of the relevant CML Lenders' Handbook. This means that, amongst other things, you must ensure that all usual and necessary searches and enquiries have been made and that our mortgage is registered (where applicable) at the appropriate Land Registry as a first legal mortgage.
If the borrower intends to use his own funds to purchase land or property which is completely separate from the security property and which could never be incorporated physically within the security property then we would not require a mortgage over the additional property in these circumstances.
What are your requirements if my client wants to extend the term of his lease or surrender his original lease and be granted another?
In these circumstances i.e. where an existing lease is being surrendered by the borrower in return for the grant of a new lease or where an existing lease is being varied by an extension of the term which at law takes effect as the grant of a new lease - and we have agreed to the extension of the term/new lease, then you must use our standard form.
For England & Wales, this is the Mortgage Deed Substituted Security. Under this Deed, we release our charge over the whole of the original property (the original lease) and take a new charge over the whole of the new property (the new lease or the lease as extended) subject to the Mortgage Conditions and Mortgage Loan Terms current at the time. There is no standard form for use in Scotland or Northern Ireland where we rely on our legal adviser to prepare a suitable Deed.
You must confirm to us that title to the new lease is good and marketable in accordance with the CML Lenders' handbook. This means that, where appropriate, you must ensure that all usual and necessary searches and enquiries have been made and that our mortgage is registered (where applicable) at the appropriate Land Registry as a first legal mortgage.
What are your requirements in respect of liability for chancel repairs?
As our legal adviser you should be aware of the importance of the decision of the High Court in Aston Cantlow and Wilmcote with Billesley v Wallbank (2003) in which Mr and Mrs Wallbank were ultimately liable for the substantial cost of repairs to the chancel of their parish church.
If your investigation of the title and enquiries reveals an actual liability for chancel repairs, then you must inform us of your findings as this may affect our lending decision. We will need to refer the matter to the our valuer for consideration.
You should remember that chancel repair liability affects property in Wales as well as England.
Where there is no indication of a chancel repair liability in the title deeds, it is for you - as our instructed legal adviser - to decide whether a chancel repair liability search (eg. Chancel Check) and/or insurance is necessary in order for you to be able to give an unqualified Certificate of Title.
What are your requirements in respect of option and pre-emption agreements?
Where you act for an existing borrower who wants to enter into an option agreement or pre-emption agreement with a third party - typically a developer - we will usually instruct you to also act for us in approving the agreement. Such instructions will be given on the basis that all legal costs and disbursements you incur in acting for us are payable by the borrower. If we are to give our consent to the agreement, we will require your written confirmation that it will not adversely affect our mortgage security. We will rely on your written confirmation.
If you are unable to act for us or to give this written confirmation, then you must send a copy of the draft agreement to our Group Legal Department for consideration together with a summary of its provisions and your views on it. Group Legal will charge - generally on a time spent basis - for time spent in approving the agreement and for liaising with other relevant departments and individuals such as Mortgage Service and our Chief Valuation Officer.
We are not usually willing to be a party to any such agreement and consent, if given, will usually be given by way of a separate letter of consent.