UK Property Law
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I can provide the legal wording of what my partner has to sign if this will help, regarding my query about possession too.
OK, in fact if I get a more detailed answer by the end of the weekend, I would prefer that to a more hurried response. My brokers have told me that the offer has been made, just a few loose ends to tie up, including the one to do with myself and my partner and our own rights to possession. I also need to get limited income protection insurance sorted out by the end of the weekend, for accident, sickness, redundancy. We already have an application for life assurance in process. Don't want to over insure, but equally want to be protected, particularly as I worry about the right to sell/possession. Ultimately we could sell the property and still realise about £200k, as the mortgage is to be used to improve the property to the top end of the market. Too many questions, but yes, do what you need to do, and get back to me. I also won't be online all weekend. However if I don't get an answer within a few hours, I may open it up, if that's ok.
Thanks for your reply.
The reality is that if you default on a mortgage then an order for sale has to be viewed as a possibility if you default on the mortgage regardless of the amount of equity you hold in the property. This is in the nature of the lender having a first legal charge over the property.
Obviously you would have a chance to defend the application for an order and given the relatively small mortgage you would have a reasonable prospect of success if you are able to offer decent terms for repaying the arrears resulting from the default.
It will be a condition of your mortgage that any occupiers over 16 years of age execute a deed of consent/postponement to the mortgage. Any adult children would be included in this. It would be a breach of your mortgage conditions to permit extended occupation to the property to someone who has not executed in this way. You should make it clear to any persons you are considering permitting occupation to that it is a condition of yours that they execute a deed of postponement with a local solicitor. It does not cost that much, around £70+Vat, and is worth it for your peace of mind.
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I have the deed of postponement for my partner to sign, and have witnessed. We are both aware of and accept that the first charge is with the building society, but that we would have some security in future given that if we were to sell or default we would stll hold a substantial portion of the equity (I would still have the right to sell the property wouldn't I, as long as we didn't default on the mortgage, or I arranged to pay it off. I was quoted approximately £400 for a solicitor to witness my signature/sign copy of my marriage certificate for identity, when I know that I am entering into a legally binding contract with the mortgagee. I wasn't prepared to pay that.
Thanks for your accept.
Are you married to your partner?
Yes, you would retain the right to sell the property regardless of the legal charge. All the lender cares about is their charge being redeemed upon completion by the mortgage outstanding being paid.
If you are married and break up then your husband could register a matrimonial home rights notice noting his right to live in the property. He may be able to restrict the sale of the property in divorce proceedings by involving the Court in financial settlement.