This article discusses the procedures required to be followed by the buyer when buying a property sold by a lender.
Title investigation of registered land sold on discharged mortgages
Once the mortgage on the concerned registered land is discharged, the entry will be registered from the charges register and hence the buyer need not concern himself with this in the future. As far as the seller’s existing mortgage is concerned, the buyer should raise a request for this to be removed on or before completion of the transaction. Such a discharge on a registered land is affected by submitting Form DS1 at the Land Registry or by use of ED or e-DS1 system.
Title investigation of unregistered land sold on discharged mortgages
The buyer’s conveyancing solicitor should check that the discharge of the unregistered land has taken place. When the land is sold by a lender by exercising his power of sale, the mortgage deed will not bear a receipt.
Building society mortgages
A discharge receipt that is endorsed on the mortgage deed, in the format prescribed by the Building Societies Act 1986 and signed by the authorised person of the particular society can be considered as a valid discharge on a mortgage.
Other mortgages
A discharge on the mortgage is considered valid when it is endorsed on the deed and signed by the lender, along with the names of the people making the repayment. Sometimes, it may happen that the person making the repayment is not the borrower mentioned in the mortgage, or his trustee or personal representative. The receipt should make a clear mention of this.
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