Lenders will want to make enquiries as to who will be occupying a property when completing the documentation, and it is for a number of reasons. Lenders are cautious about who will be living in the property, as they need to protect their interests.
If you are arranging to have a non-owning occupier when you complete your lending documentation forms, you should consider asking a solicitor or conveyancer to draft an occupier consent form to protect the interests of the occupier.
Why It’s Important
In a legal case, Williams & Glyn’s Bank Limited v Boland  AC 487, Mr Boland was registered as the owner, and Mrs Boland also lived there but wasn’t a registered occupier of the estate. When Mr Boland failed to make payments on his mortgage, it was decided that Mrs Boland had an equitable interest, as she had made a contribution to the purchase price of the property. Although Mr Bland had defaulted, priority interest was therefore given to Mrs Boland rather than the bank that had secured its interest in the property. You can read more examples of similar legal disputes in this article: https://www.glovers.co.uk/news-articles283.html.
What Does the Form Cover?
You can read online in more detail about what’s covered in the occupier consent form to make sure that you fully understand what is required. You should consider all the points carefully to understand any risks that are involved in the arrangement of having non-owning occupiers in a property. Arranging for this documentation to be completed is quick and easy, and you should make sure that everything is arranged and understood to avoid complicated situations arising in the event of breaches of the mortgage terms.
Points to Consider
If you are considering having a non-owning occupier, you should give careful consideration to arranging the consent form to make sure that all occupiers are covered by the necessary documentation. The occupier consent form is also known as a Deed of Postponement, Deed of Consent and Consent to Mortgage or an Occupier’s Waiver form. By signing the form, occupiers need to understand what rights they are waiving in the event of there being any problems with the repayment of the mortgage. It’s possible that a non-owning occupier could be made homeless, as the lending company will have the right to remedy any breaches of the mortgage arrangement, and the occupier cannot stop this from happening.
Lenders should be careful to explain the conditions of the consent form, as it must be clearly explained and it needs to be clear that there was no undue influence when it came to the signing of the forms.