DS3 and Deed of Substitution for mortgage company to split garden

Pernah

Hello all

I completed TP1 and sent to mortgage provider Santander along with Title Plan requesting part of my garden to be registered under seperate Title and they are insisting I use a solicitor from their approved panel as they also require a Deed of Substitution - Land registry confirmed they don't require this and no solicitors involvement required on my behalf providing mortgage company grants approval of land being discharged on form DS3. However, Santander insist on Deed of Substitution for their records and I believe its similar to what I've traced on Google:

This [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Deed of Substituted Security [/FONT][/FONT]is made the day of

[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]

Between

[/FONT][/FONT]

(1) of
(‘the Borrower’)
(2) [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Nationwide Building Society [/FONT][/FONT]whose Head Office is at Nationwide House, Pipers Way, Swindon, SN38 1NW (‘the Society’)

1 This Deed is supplemental to the principal deed(s) (‘the Deed(s)’) referred to in the First Schedule charging (Insert property address or lease details and property as appropriate)

(‘the original security’)

to secure payment to the Society of the principal monies interest and other monies therein mentioned.

2 The benefit of the Deed(s) is now vested in the Society which releases the original security from the Deed(s) for the purpose of taking substituted security.
3 The Borrower hereby charges as substituted security with full title guarantee the property described in the Second Schedule hereto (‘the substituted security’) with the payment to the Society of all principal money interest and other money secured by the Deed(s) so that all the provisions in the Deed(s) shall apply to the substituted security as if the substituted security had been charged by the Deed(s).

THE FIRST SCHEDULE

Date Document Parties

THE SECOND SCHEDULE

Signed as a Deed and Delivered by the
Borrower in the presence of:-

)
)
)

The Seal of [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Nationwide Building Society

[/FONT][/FONT]

was hereto affixed by order of the Board of Directors in the presence of
Authorised Officer

M 276 (11-1999)


Any help with the wording in the First Schedule and Second Schedule would be really appreciated, even though I've read somewhere that the wording would be identical to the Mortgage charge in original Title Deed.

Thank you all and hope this post serves a purpose for those in similar position in future and apologies if already covered in a post elsewhere - happy to be redirected...

Thrugelmir

Santander will wish this to be handled by and the form to be filed by a solicitor on their behalf.

Land_Registry

Many lenders will insist on the use of a solicitor in any circumstances relevant to their security, other than a straightforward redemption (discharge).

However the circumstances as outlined do seem a little peculiar as a Deed of Substituted security has been traditionally used to move an existing registered charge from one title to another. You refer to a TP1 and DS3 which suggests that you are simply seeking to split the existing title and leave the charge in place but end up with a piece of garden ground which is uncharged i.e. not part of the original security.

If that is the case then you may wish to have a further discussion with your lender as they may not have appreciated your intentions but may still have an issue, especially if the remaining title is deemed of a lesser value than the current security registered against it.

The use of a form TP1 also begs a few questions as your intentions in splitting the title are unclear - for example if you intend to build on the land and then sell the new property you may wish to consider simply getting the land released (form DS3) and then completing a TP1 as and when the new property is completed and sold.

Apologies if I have misunderstood the post but clarifying the need for a Deed of Substituted security might be warranted before trying to complete it - did you choose this route based on own investigations or have you received advice from Santander or some other party? Sending them a form TP1 may have caused some uncertainty here for example.

Pernah

Hi and many thanks for replies.

I only sent form DS3 to Santander with Title Plan showing area of garden I wish to have discharged; I would like to split my garden as its 160ft long and I'm trying to landscape it on a budget as may consider selling house and only want to keep approx. 80ft garden as the last 80ft of neighbours garden is a jungle and I've got ivy, bramble, weeds, firethorn and all sorts shrubs/trees overgrowing into my garden from both sides, which is a nightmare to maintain and very unattractive.

The second reason is as you've guessed for potential development as its next to highway with strip of land between, however, development only possible if another 2 neighbours gardens added to have sufficient depth and I'm aware that planning dept are currently against development in back gardens but may change in future?

So my reason is 2 fold and I was advised by Land Registry that all thats need is TP1 with DS3 giving Lenders consent with no need for Deed of Substitution as original charge will remain in Title Deeds. However, Santander state they have their own requirements for a Deed of Substition for security and if thats all they require it would save me having to pay solicitors £500-£1000 to act on my behalf as its just one more form to fill in. Santander returned my DS3 form requesting £75 fee and solicitor and I'm inclined to send payment with DS3 and Deed of Substitution to see if they will proceed without solicitor if thats all they need, hence seeking some help in completing the 1st and 2nd schedule of Deed of Substitution. Santander also think the valuation of property may be affected by splitting the garden, which is not the case as majority of houses in area have gardens between 40-80ft, except mine and 3 neighbours to the left.

Any help/advice would be highly appreciated unless the only way is to go down the solicitor route but won't know until I try...

holly_hobby

The value of the property as assessed for mge purposes, would have included all the land pertaining to it.

If you are essentially removing part of the land from the title deed, the total area of the property and lenders security, obviously reduces, which will ordinarilly affect the market value - unless you are saving that your propety is valued the same/ballpark to those neighbouring houses with gardens some 120ft to 80ft shorter than your own as you claim.

This is (TBH) quite rightly Santanders current concern re the exercise, and any negative impact the splitting of deed and loss of land (potentially affecting the market value) will have.

Saying that, I totally do not understand why you want to split the deed simply because you have a messy end of garden which is hard on the up keep ...... why not just hide it with a 6ft fence and access gate - then any new owners can do what they want with it when the time comes.

Of course, if the driving factor is to subsequently sell or build on this bit of land (to which Santander must remove their charge), I do understand the splitting exercise - and it would make more sense.

Hope this helps

Holly
Of

Land_Registry

Very useful further information and explanation, Holly hobby's comments seem eminently reasonable and I do wonder if you really need to be trying to split the title now if simply for landscaping purposes with the possibility of selling the land off in the future.

However, if you have chosen your route to go then the completion of the DofSS should be quite straightforward as the 1st and 2nd Schedules simply identify identify the original charge (mortgage) accurately and the property being charged. I would expect these to be as follows but you should clarify/confirm this with your lender or a legal adviser if unsure
Schedule 1 should simply refer to the details of the original charge i.e it's title (mortgage deed, charge as stated in the document itself), the date and the actual names of each party e.g. Abbey National Plc, the full names of the borrowers
Schedule 2 should simply refer to the property e.g. 1 Acacia Avenue........registered under Title Number......

Future plans - as mentioned previously the use of form TP1 is likely to only be required if you intend to transfer ownership to someone else. You cannot do a Transfer from yourself to yourself and I suspect the advice given was based on the understanding that you wished to Transfer the land to a third party.
If you are simply wishing to split the existing title then this can be applied for (although Land Registry can refuse to actually split the title, albeit rarely) OR the DS3 will in effect do this in so far as the title will be amended to reflect that the existing charge is only over part of the title - from what you have said it seems that Santander simply want the DofSS for record purposes and would not seek to have it registered.
As and when the uncharged part is then sold or transferred to a third party it can be removed from the title, thus effecting the split you seem to want to achieve now.

Finally, whilst I have a better understanding of the circumstances I would still recommend revisiting the matter with Santander or a legal adviser. Whilst not using a solicitor clearly reduces any costs involved the question still remains as to whether what you are trying to do is actually necessary in the circumstances - if it is not then there is no cost at all other than your landscaping and then dealing with the sale/transfer of the garden ground as and when you decide to do so

loubel

Pernah wrote: »

Santander returned my DS3 form requesting £75 fee and solicitor and I'm inclined to send payment with DS3 and Deed of Substitution to see if they will proceed without solicitor if thats all they need,

That's not all they need so they will just return it again. They don't mind you not having a solicitor, but they want one. You cannot confirm to them that the documents you are drafting give them legal security as you are not a solicitor. It is highly unlikely to cost you £1000. Call up some of the firms on Santander's panel and ask them what they would charge.

Pernah

Hi, thanks for further replies - I'd like to think I'm forward planning and thinking ahead, of course its difficult for anyone to see my intentions... If I put the house up for sale I don't want buyers to say they want end of garden as condition of sale in case they realise the potential; if the house isn't going on the market then there's always the opportunity to sell end of garden off to neighbour or sell ends off together to a builder/developer/via agent, preferably with outline planning if nothing else and I'd rather have this sorted now than trying to do all this when it comes to the crunch as buying/selling property is always a stressful task. I can then just get on with landscaping what will affect the value and sale of my house.

Quote I had from a solicitor was starting from £600, depending upon how complicated it becomes, which is what I'm trying to explore also - just want to have back of garden split from property and instead of joint names transferred into my name only.

Loubel - i hear what you saying, however, a document with the correct wording and signed by both parties becomes legally binding and lenders would normally have their internal or acting solicitors/conveyancers check things over (£75 fee, Title Plan, DS3 and letter explaining circumstances along with Deed of Substitution for their security)

I suppose going through this only adds to my knowledge as well as learning the process and hopefully being able to share it with others, even if it means telling someone to use solicitor to start with as lender won't deal with in any other way...

Thanks once again

holly_hobby

Pernah wrote: »

Hi, thanks for further replies - I'd like to think I'm forward planning and thinking ahead, of course its difficult for anyone to see my intentions ...

Not really, you want to have the future opportunity to sell a part of your land (end of garden) to a developer

Pernah wrote: »

If I put the house up for sale I don't want buyers to say they want end of garden as condition of sale in case they realise the potential

Well if it forms part of the deeds, there is NO negotiation - it forms part of the property sale. I hear what you're saying though, if you don't have the opportunity to sell for profit, you don't want any subsequent owner to be able to either.

Pernah wrote: »

I suppose going through this only adds to my knowledge as well as learning the process and hopefully being able to share it with others, even if it means telling someone to use solicitor to start with as lender won't deal with in any other way...

Thanks once again

A lender will always want anything to do with their suriety overseen by their own (or appointed) solicitor.

Its not a generally an option, but a requriement.

Hope this helps

Holly

Land_Registry

Pernah wrote: »

Quote I had from a solicitor was starting from £600, depending upon how complicated it becomes, which is what I'm trying to explore also - just want to have back of garden split from property and instead of joint names transferred into my name only.

Loubel - i hear what you saying, however, a document with the correct wording and signed by both parties becomes legally binding and lenders would normally have their internal or acting solicitors/conveyancers check things over (£75 fee, Title Plan, DS3 and letter explaining circumstances along with Deed of Substitution for their security)

If you are going to transfer the garden ground from joint names to a sole name then the TP1 will come into play - I don't recall you mentioning the joint to sole name part before but apologies if you did as now explains why TP1 referred to.

The DS3 would release the garden ground from the existing security and you should get a new title for the then mortgage-free garden ground.

Only remaining issue with regards the legal title would seem to be agreeing with Santander.

jamieball_2

Pernah, how did you get on. We are with Santander and would like to sell a plot attached to our house, so looking for some guidance!!