ID1 For Deed Of Postponement?

I am seeking to switch mortgage lender. My parents have a 2nd charge on the house, and the new lender's legal team have prepared a deed of postponement for my parents to sign, so that the mortgage lender's charge has priority of theirs. In addition to signing a consent form for this, the legal team are requesting that my parents each complete the ID1 certificate of identity as well, which seems an unnecessary inconvenience (my parents live in quite an isolated place, and are unwell, and this is quite a difficult thing for them to get done). According to the Land Registry site, it would appear that ID1 is only necessary for the registration of charges. My parents' charge is already registered - this is just a deed of postponement. The new charge to be registered is by the mortgage lender, so surely the new ID to be proved is theirs? Also, I may wish to change mortgage lenders again in the future (to get better rates), and having to do this each time would be difficult. Any advice on this would be gratefully received.

2 Answers

Hi,

Thanks for your question. I'm afraid I have to agree with the lender's solicitors. They will need to submit form AP1 to register the new charge and postponement. On that form they will need to confirm one of 3 things: 1. That your parents are represented by a solicitor, in which case they will need to enter the solicitor's details or 2. That sufficient steps have been taken to verify their identity (which they cannot do because they do not act for your parents) or 3. That evidence of identity, in the form of an ID1 form for each of them, is enclosed. I realise that the list of applications caught by the requirements does not mention postponement but not is this mentioned in the list of exceptions. The Land Registry might argue that postponement is covered by "release/discharge of charge" because in effect your parents' charge is to be removed albeit it temporarily and re-registered after the new mortgage. The ID requirements are an anti-fraud measure therefore any transaction has the potential to defraud anyone with a financial interest in the property should be caught by the provisions. Although it may not be so in this particular case, a person might for example replace the existing first mortgage with one for a substantially higher amount thus reducing the value of the second charge (by reducing the equity available to settle it).

I'm sure this isn't what you want to hear but I hope it helps.

Best regards

Admin

The solicitors are correct. Once the current first mortgage is repaid your parents are entitled to hold the 1st charge. That's why the deed of postponement is needed and the ID1 is to ensure that an imposter is not fraudulently signing the documents so as to deprive them of the 1st charge.