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Residential Conveyancing – Updates on CML, Mortgages and Revised Local Authority Search Forms
CML Changes to Buildings Insurance Requirements for Those Buying under Mortgage
Effective from 1st December 2015, a conveyancer has a duty to make reasonable enquiries of a borrower that they have suitable insurance in place, which is satisfactory to their lender amd which will continue until their mortgage is redeemed. Although this is already part of our thorough notes to clients, the obligation will now be formally imposed on all conveyancers to enquire, and purchasers will be required to confirm that their insurance meet the complex specifications of their mortgagees in this respect in order to not put themselves at risk of breaching the terms of their mortgage.
Buyers should be aware of the increased emphasis on this insurance element, which tends to favour the insurance provided by the mortgagee themselves (or their agents), with busy purchasers unwilling or unable to spare the additional time required to cross-check the individual mortgagee’s specifications against the schedule of their own, proposed insurer.
Buyers should be particularly careful to note that this obligation is an ongoing one throughout the term of their mortgage, and any change to their household buildings insurance policy during the term of their mortgage needs to remain subject to the very strict and detailed requirements of their mortgagee. Equally, any remortgage or change of mortgage provider may effect the validity of the insurance in place.
Cooling-Off Period for Mortgage Sales
From 21st march 2016 borrowers will now be required to confirm acceptance of their mortgage offer after a 7/10 day ‘cooling-off’ period. Submission by your solicitor of the Certificate of Title, under your instruction to proceed with exchange of contracts, can also equate to this acceptance.
Acceptance can be made before the end of the reflection period, but this will be subject to the mortgagee’s own requirements, and systems. Those moving swiftly through a purchase, keen to exchange as soon as the offer is received from their mortgage company, need to beware of this new system, as it may affect their timetable for exchange.
Revised CON29 and CON290 Forms
The new CON29 and CON290 forms for Local Authority Searches available from 4th July 2016 will now include the following as standard(amongst other changes and additions) :
- listed buildings;
- public rights (eg footpaths) across the property;
- Sustainable Drainage System Agreements in force or required on the land;
- any proposed railways;
- details of any Community Infrastructure Levy & Assets of Community Value which apply; and
- whether the property is affected by a Green Deal.
The new forms should provide a more comprehensive set of responses for your basic search fee. Detailed searches and comprehensive Title investigations – along with a full survey – remaining the most essential investments for a thorough Buyer to ensure that they expose all potential issues with a property prior to purchase.
For further guidance on any of the above, or any other property related matters, please contact Judith Bleetman or Nikki Salih at our Cockfosters office on 020 8441 1556