When releasing equity from your home the equity release process should be relatively straight forward. Afterall, you are releasing the equity from your home that you have already purchased, or inherited by using the UK legal and conveyancing system.
However, the process may not always be so straight forward for a number of reasons. Many of the scenarios we discuss in this article about equity release conveyancing here at Adlington Law - can be easily avoided.
Obtaining your offer, with the help of your trusted equity release adviser is only the first step of the process. Prior to this, your adviser will discuss all of the financial aspects of your application, including submission to the lender, obtaining the valuation report and if all goes well, the issue of the offer document itself.
Upon issue, your chosen Lender will instruct their legal team who prepare the legal paperwork, examine the title to your property and then forward the offer and accompanying legal paperwork to your nominated solicitors. In addition, your equity release adviser will obtain copies, which they will share with yourself. This paperwork may include special conditions, imposed by the Lender or their solicitors, to ensure that both your own interests and those of your Lender, are protected.
This is the point at which problems and delays may arise whilst your specialist solicitors seek to deal with those problems.
Problems frequently encountered can include name irregularities. If the name on your offer differs from that on your legal title, even just the spelling of the name, this can normally be easily remedied, but we will need to be provided with identification to support your correct legal name, such as your passport or driving licence. These would need to be produced to the Solicitor who attends on you to provide your legal advice, so that they can take a copy and certify it to be a true copy of the original.
However, if your legal name differs from your identification then you would need to provide a full explanation together with identification evidencing how you arrived at your current legal name. This could include birth certificates, marriage certificates, change of name deeds etc. If this information is provided to us prior to the offer being received, then we will be able to prepare a statement of truth which will be relied upon when updating the legal title.
Most commonly we experience problems where parties have chosen to provide their confirmation name in their application or throughout the course of their adult life have chosen to use different names, but never formally changed their name. Alternatively, if the client has a very long and unusual name, they may choose to abbreviate this for convenience.
No application will proceed unless these issues are dealt with as there must be no irregularities. The primary concern for ourselves and the Lender is that we are dealing with the correct person and that no one is impersonating another person for financial gain. So, whilst these enquiries may at times seem over the top, this is all done to ultimately protect consumers.
Every case that we deal with is different and whilst timings are important to everyone, delays can invariably arise when solicitors are faced with issues which relate to the property title. These can include matrimonial or separation issues, multiple restrictions or charges on a property, complications relating to Trusts or deceased proprietors, or issues relating to land boundaries and ownership are just examples of some of the more common problems we encounter here by the Adlington Law team.
When we are faced with any of these legal scenarios, it is imperative that we are provided with as much information as possible to enable us to deal quickly and efficiently with cases. If information is withheld or not provided to us upon instruction, then this can cause unnecessary delays, additional costs and increased anxiety and frustration for clients and advisers, alike.
For this reason when clients are speaking to their financial advisers, it really is important for them to provide as much information as possible about their circumstances and, where appropriate, provide documentation in support of any facts they are aware of such a divorce, deceased proprietors etc. If financial advisers are in any doubt, they should contact the nominated specialist solicitors who will be able to direct them as to exactly what is going to be required from the client.
The following scenarios would ideally require clients to produce documentary evidence, as detailed:
- Name Change / Discrepancy: Birth Certificate, marriage certificate, passport, driving licence, change of name deed
- Divorce / Separation: Decree Absolute or Final order of Divorce (where applicable), financial consent order, separation agreement, confirmation that party coming off title has received independent legal advice
- Multiple Restrictions / Charges: We frequently experience significant delays when clients advise they don’t know what entries relate to. Transactions cannot proceed where any entries remain on title, as all will need to be removed to enable the equity release to proceed and provide your Lender with a clear title. If you do have any information, even if they are old letters or court orders, please provide these so that we can commence our enquiries. These enquiries can take a great deal of time as it is normal for historic debts to be ‘sold on’ (sometimes more than once) to other financial institutions and we will only find this out once enquiries commence. We would strongly recommend that if you are aware of entries such as this on your title, then please do carry out a credit check which should provide you with some information that we can commence our enquiries from.
- Deceased Proprietor: Death certificate of deceased, grant of probate (if available) and copy of the Last Will & Testament of the deceased.
- Trusts: If there is a Trust on your property, please provide us with sight of the full, original Trust document together with any additional documents in support. In addition, if any parties to the Trust have passed away, please provide us with sight of the original death certificate and any grants of probate.
Trusts tend to be quite an emotive subject for a lot of clients. Clients will have entered these Trusts previously, having been told that this is the best way for them to preserve their inheritance for their families. Whilst this is correct, the Trust takes the property outside the client’s estate and means that the client is no longer able to deal with the property as they would do a property outside of a Trust. This would have implications for a Lender and therefore, no equity release can proceed whilst the property remains in Trust. There is also the issue that when Clients have entered Trusts they will have likely parted with thousands of pounds, and this can cause frustration to the client knowing that they will need to incur further costs to dismantle Trusts.
We have our own dedicated private client solicitor, who also has 6 years equity release experience and therefore, is fully aware of the needs of Lenders in dismantling these Trusts.
Where a Trust is present, we would request that the original documents are provided to us at the earliest opportunity so that the drafting of the Trust can be reviewed with a view towards dismantling the document for you and removing the entry from Land Registry. This can be quite a time consuming process as we will need to also liaise with Trustees and Beneficiaries, depending upon how the Trust has been drafted. You should be aware that it may be necessary for any additional Trustees/Beneficiaries to take independent legal advice to comply with the Lenders requirements. This will be reviewed and advised upon on a case by case basis.
Some clients may prefer to revert to the Solicitor who put the Trust in place but then problems may arise where Solicitors will dismantle Trusts in accordance with the law but not in keeping with the additional requirements of Lenders Solicitors which can, in turn, lead to further complications and delays. Clients may also be incorrectly advised by their Solicitors that once the equity release has completed, they can place the property back into Trust. This is incorrect and would breach the terms of any equity release contract.
Our in-house Adlington Law Solicitor will ensure that you are provided with the correct advice and will deal with everything in a timely manner, keeping your equity release file handler in the loop so that they are ready to deal with your offer at a point when the Trust is being removed from the title, thus ensuring a smooth transaction.
Similarly, where there is a deceased proprietor and there is a restriction on the title, we would request that a copy of the death certificate, grant of probate and Will is provided to us at the earliest opportunity so that we can check to ensure that there are no potential problems ahead of us, such as a Will trust written into the Will of the deceased which compromises the legal interest of the remaining party on the title.
Our in-house private client solicitor will review these documents on a case by case basis and advise as to the requirements.
In the event that there is a deceased proprietor and probate is required but has not been applied for, our in-house private client solicitor is also able to deal with this on your behalf.
Whilst this is not an exhaustive overview of the problems we can encounter when dealing with equity release cases, it does provide an example of issues that can arise which will cause delay to transactions and how we can deal with these to reduce delays as much as possible.
If you have any questions about anything relating to equity release transactions and problematic issues then it is always better to ask a specialist solicitor – such as Adlington Law, who has experience in dealing with the various lenders, as whilst it is sometimes your preference to use your family solicitor, a solicitor who has no experience of equity release will incur delays due to the nuances of the equity release transaction which is not apparent to all solicitors.
If you have any questions about equity release, please contact your local Equity Release Supermarket Adviser or call Equity Release Supermarket on 0800 088 5951.
