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Why Have I Been Asked To Sign A Deed Of Consent Form?

Posted on 26th March 2020

Your conveyancing solicitor has a duty not only to you, as the valued client, but also to your mortgage lender, to ensure that they are as adequately protected as you are.

The main concern of the mortgage lender is that their security over the property, and interest in the same, is not going to be compromised. This is the reason why your Preston solicitors are required to disclose any potential adversities that may pose a risk to their interest, for example, an adverse search or survey result that may depreciate the value of the property.

It is imperative that such risks are disclosed as, otherwise, your lender can reserve the right to withdraw their offer and not to lend you the funds. For more information on instances where the mortgage offer can be withdrawn, see our blog. A further important factor that must be reported to the lender, is where there are to be adult occupiers of the property, on Completion.

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What is a Deed of Consent?

A Deed of Consent, also known as a Deed of Postponement, is in effect, a Deed, which makes it a legally binding document that should be carefully considered before signing.

The Deed is provided to adult occupiers of a property, whom are not party to the mortgage itself but are to be in occupation of the property, to confirm in respect of the following:

That the occupier consents to the borrower creating, and registering, the mortgage in favour of the lender to secure the loan and any further advance(s), and that no further consent to such further advances would be required.

That the occupier acknowledges they cannot make a claim in the future by asserting an interest over the property; the interest of the lender is to be paramount and the occupier must recognise this.

That the occupier understands that any legal interest they may be able to claim is to be suspended, due to the legal charge over the property.

That the occupier recognises the need to sign the Deed to assure the lender that no claim of interest will be made over the property, ahead of the lender’s first legal charge.

That the occupier confirms they will not, in the future, claim that they did not know about the lender’s charge and will not subsequently challenge this.

That it is recognised that any monies due to the lender would be repaid out of the equity in the mortgage firstly to the lender.

That the occupier accepts that the lender reserves the right to enforce the mortgage, in the event of default, or other breach of the mortgage terms where necessary, by seeking a court order for possession of the property. In such event the occupier acknowledges that they would be expected to vacate.

By signing this form, the occupier is providing the lender with a right to remedies available to them under the terms of the mortgage without having a right to protest them. Whilst the above does provide for a very brief overview of what the Deed is setting out, where you have been presented with such Deed, you should always use a local solicitor to explain the importance of seeking independent legal advice would ensure that:

- Explaining what the Deed means, in detail;

- Explaining the implications of signing the Deed, inclusive of the potential risks of the same;

- Ensure that you are satisfied with what you are signing, and why.

As discussed above, Deeds are legally binding documents, and are to be treated with care. If you have been asked to sign a Deed of Consent, you should always take the advice of your Preston solicitors. This is to ensure that you fully understand what you are being asked to sign, and why.

If, therefore, you have been presented with such document, contact MG Legal’s solicitors in Preston today, to discuss how we may assist you. Get in touch online, here, or at property@mglegal.co.uk, and our expert team will be on hand to guide you.