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F E Smith
F E Smith, Solicitor
Category: UK Law
Satisfied Customers: 9587
Experience:  30 years in General Practice
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A friend is developing a property and is fast running out of

Customer Question

Hi, A friend is developing a property and is fast running out of money to complete it. If I were to lend them the funds to complete the property how expensive would it be to take a lein on the property (none currently exist) to secure my money.
Submitted: 1 year ago.
Category: UK Law
Expert:  F E Smith replied 1 year ago.

Do you mean place a charge on the property to get your money back if it sells?

Is there any other mortgage on the property?

What about repayment before it sells or of it doesn’t?

Expert:  F E Smith replied 1 year ago.

If you want to place a charge on the property, that will generally only give you money if the property sells or it needs to be remortgaged.

There is no reason why you cannot do it yourself if you feel competent although a solicitor will probably only charge about £300/£400 plus VAT plus the land Registry fee.

If you want to do it yourself, you need to complete form CH1

and submit it to the Land Registry along with form AP 1 and form ID 1 and the fee which depends on the value of the house.

ID1 needs a passport size photograph attaching to it which has been certified by a solicitor as being a true likeness.

If there is a restriction on further charges which has been placed on by another mortgage lender, which is very common, that lender will have to consent to this new charge. They are unlikely to give consent if there is any provision or agreement between you for the borrower to have to repay money before the property is sold.

I suggest that you have an agreement between the two of you as to exactly how much interest is going to be charged and what repayment arrangements that are going to be and what happens when the property is sold and is it going to be sold and suchlike. That would be the subject of a separate agreement and you could register the terms of that agreement without actually by way of a restriction which you do with form RX1. There are about 40 types of different restriction so you need to choose the right one.

For the charge and the agreement to repay and the restriction, you could be looking at getting on for £1000 plus VAT for a solicitor to do it but at least then you know that all the bases are covered. If you do it yourself, particularly with regard to the restriction and the agreement, these things do have a habit of going wrong.

Can I clarify anything for you?

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Best wishes