Buy to Let remortgage - rent charge issues

KatyMorag

Hi
I'm trying to get a buy-to-let mortgage with Birmingham Midshires.  It appears that our solicitor is also working on their behalf (suspect!) and has indicated that because we have an annual Ground Rent (rent charge) the lender needs a Deed of Variation and Certificate of Title to exempt them from "remedies available to the Rentcharge Owner under the Rentcharge Act".  Has anyone else come up against this?  Birmingham Midshires get a slating on Trust Pilot, so I am hoping that I have just picked the wrong lender!  They want over £750 to do this work so I'm trying to find out (by various routes) if this is essential and I'll just have to get on with it.
Thanks

davidmcn

KatyMorag said:

It appears that our solicitor is also working on their behalf (suspect!)

What's "suspect" about that? The lender needs a solicitor, and it would be pretty unusual in a remortgage for you and the lender to use separate solicitors (and not in your interests as you'd probably end up paying for both of them).

AdrianC

KatyMorag said:

I'm trying to get a buy-to-let mortgage with Birmingham Midshires.  It appears that our solicitor is also working on their behalf (suspect!)

You could choose a solicitor who isn't on your lender's panel... then pay extra for a second solicitor for the lender.

Birmingham Midshires get a slating on Trust Pilot, so I am hoping that I have just picked the wrong lender!

So, umm, why go with them?

Or you could shrug and go with the theory that a slating on TP simply means that they aren't astroturfing their own reviews...

(BTW, the identity of the lender is almost certainly irrelevant to the query, because the rentcharge itself will be the same with any lender)

MaryNB

KatyMorag said:

Hi
I'm trying to get a buy-to-let mortgage with Birmingham Midshires.  It appears that our solicitor is also working on their behalf (suspect!) and has indicated that because we have an annual Ground Rent (rent charge) the lender needs a Deed of Variation and Certificate of Title to exempt them from "remedies available to the Rentcharge Owner under the Rentcharge Act".  Has anyone else come up against this?  Birmingham Midshires get a slating on Trust Pilot, so I am hoping that I have just picked the wrong lender!  They want over £750 to do this work so I'm trying to find out (by various routes) if this is essential and I'll just have to get on with it.
Thanks

It's generally recommended you use the same solicitor as your lender. Otherwise you incur costs of your lender having to engage a different solicitor. I did it when I got my residential mortgage last year. When I went for quotes I made sure they could represent my lender. Your lender's agenda should somewhat align with yours (don't want to make a bad financial investment). Sometimes your lender's rules can in a way protect you e.g. you won't get stuck with spiraling ground rent. This is very different to using a developers' solicitors (frequently discourage on this forum) which can be problematic because a developer wouldn't act in your interest if it didn't suit them and this could have a negative influence on your solicitor. 

nyermen

1) Same solicitors for yourself and the bank - this is a good thing, otherwise you'd have to pay again for the bank's solicitors.  (Note: Same solicitor as the property vendor, definitely not a good thing)
2) I assume this is an estate rent charge.  Sorry if you know this already - but these are not coming to an end in a couple of years unlike other rent charges, they continue as current.  And if a payment is missed, the rentcharge owner has a right (with no appeal) to get an immediate 99 year lease on the property, rendering it essentially worthless.  Hence the bank will only lend if there is an exemption, as anyone who defaulted on a mortgage and decided to just forgo the property, would inevitably not care about any rentcharges, and the bank's recovery asset would be worth nothing.