Two Titles- Too Complicated?
Rob Hailstone reports that some Bold Legal Group members have had a spate of issues with a number of lenders with regard to properties with two or more titles. Set out below are a details of a few of the situations that have arisen:
1.“We have had two instances with lender 1 where they have withdrawn their mortgage offer due to the fact that the property has two separate Title Numbers. This does seem bizarre, but they are quite adamant that they will not lend where there are two separate Title Numbers.
As you know, the Country has many properties with two or more Title Numbers, and it is becoming increasingly common, with developers now providing coach house style accommodation with car port and garages underneath.”
2.“I have also come across that this week but with a mortgage offer from lender 2. When I went back to them and advised that their security would not be compromised as their charge would be registered on two title numbers they came back with “it is our policy not to lend on properties comprising more than one title number.” I have never come across this before and we are now asking the sellers to ask the Land Registry to amalgamate the two titles in the hope we can still get our client’s mortgage ported on the favourable rate from lender 2!”
3.“I had this problem with lender 3 where the house and its land (18 acres) were on separate titles. The lender insisted that the titles be merged by the Seller before they would issue their offer. Fortunately the Seller obliged at his own cost.”
4.“We in the north east are very intrigued by this — whilst in most cases you could merge two titles to add that stray garage to the house title – surrounded as we are however by Tyneside flats where the security if the leasehold interest in the new home and the freehold title to the “other” flat we wonder if the lenders have thought this one through…..”
5.“Below is an email from lender 4 to our client’s broker about why they won’t accept properties on two title numbers:
“We will have a problem. We can only secure a mortgage on one title plan. Therefore client could theoretically sell the property on the second title plan and reduce our security. It will need to be on one plan.””
Rob says, I am in discussion with some of these lenders and hope to get to the bottom of this but in the meantime would be interested to hear any other views?