Do you need legal advice before signing an occupier consent form?
If you are living in a property but are not one of the mortgage borrowers, there are certain steps that need to be taken to make sure everyone is legally protected. One piece of protection that may be needed in this circumstance is a deed of consent form and you may be told by a mortgage lender to seek independent legal advice before signing it. However, a frequently asked question is whether legal advice is actually necessary before signing that form?
What is a deed of consent form?
During a property purchase, anyone aged 17 and over who is planning to live there but is not the legal owner may be asked to sign a deed of consent or occupier consent form. This document, also known as a Consent to Mortgage or an occupier waiver form, is issued on behalf of the mortgage provider. It means that person will be required to leave the property if it should be repossessed in the future due to circumstances such as failing to make repayments or breaching the terms of the mortgage.
It gives the mortgage provider protection against a right of occupation claim. Essentially, the person who signs it will renounce their right to occupy the property should repossession occur. Figures show that between January and December 2020, a total of 5,099 homes were repossessed across England and Wales Cases are expected to rise in the coming year thanks to the cost of living crisis and a hike in interest rates.
Do I need legal advice before signing the form?
Legal advice is usually needed before signing an occupier waiver form. While this may seem like something of an inconvenience, not to mention the expense it entails, failing to get legal advice could mean a mortgage lender will refuse to release the funds needed for the purchase.
Why is independent legal advice needed?
There are two key reasons why independent legal advice, such as that offered by professionals accessible through Sam Conveyancing, should be sought before signing an occupier waiver form. Firstly, lenders want to make sure that the implications of the form are fully understood before it is signed. A person who does sign it will lose their home if repossession should occur in the future, and the implications of this should be fully understood before agreeing to sign. If this is not fully understood, a deed of consent form could later be deemed ineffective by the courts.
Secondly, signing the form in the presence of an independent practising solicitor or licensed conveyancer means a person cannot later claim a signature was given under duress or given unwittingly.
A solicitor chosen to advise on an occupier waiver form needs to be independent from solicitors acting on the sale or purchase of the property. They will need to attest that they have made the person signing the form fully aware of what it means and are satisfied it has been fully understood. They will have to confirm that you have indicated that you wish to sign it. Witnesses to the signature will also be needed.
What if legal advice is not sought before signing an occupier waiver form?
If you have been told to seek legal advice before signing an occupier waiver form and do not do so, the mortgage provider is unlikely to release the funds for the mortgage. Whether you can opt out of seeking independent legal advice depends on your mortgage lender. However, it is exceedingly rare that it is not needed: most lenders do insist on it.