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Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 7620
Experience:  BA (Hons), PgDip, Practising Solicitor
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I wish to lend my parents (in their 70s) a reasonably large

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I wish to lend my parents (in their 70s) a reasonably large (200kgbp) bridging loan for 6-12 months to enable them to buy a new house as cash buyers and without pressure to sell their current home. As they both have health problems, I am particularly concerned not for my loan to get caught up in any form of estate in the event one or both should die. I will of course implement a simple loan document. Is there any advantage in having them sign a mortgage deed (probably most simply on their current unemcumbered property) and does that need to be registered immediately or can it be kept in a drawer "just in case". If the deed is put in place should I take the title deeds as a bank lender would? They and the properties are in the UK, I am a Swiss resident but UK domiciled.

Thanks for your patience.

Yes, there’s quite a big advantage. If you have a correctly drafted charge which secure the bridging loan then it makes enforcing the loan a lot easier.

It means that in the event that you choose to enforce the loan and recover your money (because of death and an otherwise insolvent estate) then you could simply skip to selling the property.

If you only have a loan agreement then you would have to deal with the executors of the estate as to repayment and if this was breached you would then have to get judgement on the default of loan at county. Once you have this you would still have to apply for an interim charging order and then apply again for a final charging order after that. A lot of legwork. A lot of time.

You should attend a solicitor to view the loan and draft a charge. It is for you to decide when you want to register the charge but technically they would be able to transfer the title for the property or remortgage without reference to you until the charge is registered on the title and a restriction entered (which then prevents this).

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Kind regards,

Thomas and other UK Property Law Specialists are ready to help you
Customer: replied 4 years ago.
Thanks that is very useful. I am in fact their executor, but would rather not have the potential conflict of interest. I very much doubt they would seek to remortgage the property and will struggle to so do if I have the title deeds anyway.

Yes, being executor would probably cause a conflict of interest.

There are no such things as "deeds" these days, this refers to the old unregistered form of holding a property's legal title.

The property will be registered at the Land Registry with a registered title. The charge would be registered against it as a Restriction which prevents mortgaging and selling. This is how you should protect yourself.

Thanks for rating my answer.