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Registered Providers - five easy steps to charging

When considering further debt finance, RPs are often concerned about the time and effort required to charge properties. But by following the below steps it should make the process of charging portfolios of housing stock to lenders more efficient and easier to manage:

Property selection

Selecting appropriate stock to put into charge can be the key to avoiding difficulties and delays in the charging process. Circumstances will be different every time, but where possible, some simple tips to use would be:

  • select well established residential stock as this is likely to be far easier and quicker to charge that stock under construction or recently constructed stock;
  • try to oversize your proposed portfolio (say by 10-15%) so that if difficulties do arise on certain schemes these can be dropped without the whole exercise being jeopardised; and
  • at the outset ask your legal team to carry out an initial summary title review to highlight any obvious difficulties with the proposed stock which could otherwise cause issues further down the line.  

Know your lenders requirements

It is an obvious point, but you need to be clear on what your lender's charging requirements are. What are the Conditions Precedent to charge and are you able to satisfy all of these conditions? Examples include the lender's requirements in relation to:

  • board resolutions;
  • officer's certificates;
  • valuation; and
  • certificates of title.

How old can the valuation and searches be on completion and what signatures will be required on the various documents? If these matters are known and understood from the outset they will help prevent delays and prevent problems arising at completion.

Use publicly available documents

It’s worth finding out if the required documents are available from the Land Registry or the local planning authority. This will save RPs having to root through old development files on each scheme for copies of transaction and planning documents

The Land Registry and local authorities will charge minimal fees for providing copy documents. This is usually a small price to pay for the hassle it can take out of the due diligence process. 

Housing management enquiries

As an internal process, you should try to line-up availability with each of the people within your organisation with particular knowledge about the schemes going into charge. Lenders will want to know about all material issues with the proposed security including property specific issues such as building guarantees, third party rights, disputes and boundaries, etc. The details of such matters are often only known by key people within each organisation who have day to day knowledge about such matters. In order to avoid delays you should therefore circulate the relevant lender enquiries to these people as early as possible.

Search indemnity insurance

The lender's search requirements should of course be discussed at the outset. You can ask your lender to agree that, for speed and simplicity, you will put in place search insurance in lieu of carrying out conveyancing searches across the portfolio. Some lenders are amenable to this for certain types of properties or where there is a particular urgency.

Search insurance is invariably cheaper than carrying out suites of conveyancing searches and policies can be put on risk with immediate effect. If your lender will agree to proceed on the basis of search insurance rather than carrying out searches, this will reduce your overheads and speed up the process.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2015. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

TLT LLP is a limited liability partnership registered in England & Wales number OC 308658 whose registered office is at One Redcliff Street, Bristol BS1 6TP England. A list of members (all of whom are solicitors or lawyers) can be inspected by visiting the People section of this website. TLT LLP is authorised and regulated by the Solicitors Regulation Authority under number 406297.

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