In buying a property, you are most likely taking out a mortgage too. Despite all the preparations you have made when faced with the blizzard of legal papers you are requested to sign, there may be a document you have not come across before.
What is this form?
If you are buying a property, anyone over 18-years-of-age who will be living there who is not going to be included as an owner on the title deeds may be required to sign an occupier’s consent form by the mortgage provider.
Some lenders may insist that they sign a form which will require them to leave the property in the case of repossession. This is deemed necessary since anyone over 18 may have acquired a beneficial interest in the property during their residence and could claim to continue to reside in the property.
A beneficial interest means they enjoy the benefit of living in the property or the income it may generate. There is a significant difference between an owner of a property and those who have a beneficial interest.
What is the purpose of the form?
The form is designed to protect the mortgage lender from anyone over 18 claiming the right of occupation, even though they are not the legal owner, should re-possession proceedings be instigated by the lender.
Before signing, it is important that the individual who is being asked to sign the consent form seeks independent legal advice. Most lenders will make this quite clear once it becomes apparent that the property will be occupied by other people aged over 18 who are not named on the mortgage document.
One of the reasons you should seek legal advice is that you may be contributing to the purchase of the property but not named on the mortgage document or the title deeds.
You will find plenty of information online at sites such as Sam Conveyancing. It is important that you read this information closely before agreeing to sign an occupier consent form.
Can you refuse to sign an occupier’s consent form?
If any member of your household is thinking of refusing to sign an occupier’s consent form, it could have serious repercussions. Prime amongst these is that the lender may refuse to provide a mortgage or insist on further documentation or that they take legal advice to make sure they understand the consequences of their action.
These will include making it clear that they cannot claim that they signed a consent form under duress or unwittingly. They must also understand the document they are being asked to sign.
The reason that legal advice is essential for anyone who is being asked to sign an occupier’s consent form is that the consequences are serious. It is vital that everyone understands why the form is being signed and why the lender requires this.
Everyone’s circumstances may be different, and that is the best reason to seek independent advice for all parties involved. You may be buying the property alone but allowing a partner or children to live with you in the property. As we explained above, this may mean that other parties gain an interest in the property. This is why independent legal advice is so important.