Changing banks or making a finance application?

15 August 2017

Property aspects you need to know. There are a number of considerations you need to be aware of particularly if your borrowings are going to be secured by way of a legal charge over property.

A solicitor will be instructed by the landowner and the bank; this is usually the same solicitor. A valuation will be prepared by the bank confirming how much the property is worth so they can decide the amount of borrowings they are prepared to make available.

The solicitor will carry out searches and enquiries on the property and report back to the bank, confirming if the title to the property is good and marketable (Report on Title). If the solicitor discovers anything that might reduce the value of the land, and subsequently the borrowings, this must be reported. The solicitor will need to check, amongst other things, that:

  • the property has the benefit of all required rights over other land e.g. rights of way and rights for services from the public highway. Informal arrangement may need to be formalised and registered at the Land Registry;
  • there are no onerous restrictions and covenants on the title to the property which will affect the valuation;
  • the buildings have insurance;
  • there is no chancel repair liability;
  • any leases or licences on the land are reviewed and reported to the bank; and
  • there are no environmental issues.

If there are any legal charges already on the property that need to be discharged, the solicitor will contact your previous bank in order to find out how much is needed to redeem the borrowings and release the charge. Once the solicitor has submitted the Report on Title and the bank has confirmed that they are happy, the legal charge document will be completed and funds released. The solicitor will then deal with any post completion requirements.

If you require any advice in relation to this topic, please contact a member of the agriculture team.

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