Waiving the Family Home Protection Act

C

Covey

Guest
In an unusual position.

I'm with my partner about five years and she lives in my house and rents hers.

I've just got a mortgage in my name only for just over 10% of the value of my house (original mortgage repaid) and my solictor won't release the funds unless my partner waives all rights under the Family Home Protection Act.

I don't want to put my partner in this embarrassing situation. Anyone know the ins and outs?

Thanks
 
Is your partner a joint borrower and/or contributing to the repayments?

The property is not a family home as a married couple do not reside there.

I think what your solicitor may be insisting on is that she waives all third party rights in favour of the lender which is common practice and is most probably a condition of the letter of offer.
 
Is your partner a joint borrower and/or contributing to the repayments?

NO

The property is not a family home as a married couple do not reside there.

Legally correct. But it IS our family home and I don't want to do this unless it's absolutely neccessary.

I think what your solicitor may be insisting on is that she waives all third party rights in favour of the lender which is common practice and is most probably a condition of the letter of offer.


As the loan is so small, why should she be forced to waive ALL of her rights? Surely something recognising the priority of the loan should suffice?
 
A family home is where a married couple reside. In your case its your primary residence.

The lender must be in a position to sell the property should you default on repayments. They cannot do this with a sitting tenant and therefore make it a condition that all third party rights are waived before they release funds ie who would buy a property with your partner living in it?
 
Thanks a lot.

So, would I be right in saying then that no lender will give a loan to a sole borrower that is cohabitating, without this waiver?
 
I can't say if every lender will require this but would find it unusual if this was not the case where they are aware that somebody else also resides in the property.

From your partners viewpoint when she agrees to the waiver, she receives independent legal advice in doing so. This means she is aware of additional borrowing on the property and this is seen as protection of her interests.
 
Really sorry for going on here

"This means she is aware of additional borrowing on the property and this is seen as protection of her interests."

As she is being asked to waive all of her rights I don't see how it protects her interest?

In the scenario where I was to get the mortgage today ( as a single person) and move someone in tomorrow, there would then be no waiver and they would retain all their rights? And the bank would then have a so called "sitting tenant" to deal with !

Sounds daft.
 
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The fact that she has been asked to sign the waiver means the bank are ensuring that she is aware of additional borrowngs which means that you cannot borrow without her agreement. Therefore you cannot build up a lot of debt on the property of which she has no knowledge. As she is signing a waiver agreeing to waive her rights for the borrowings, she receives independent legal advice so is fully aware of what she is signing.

You have made the lender aware that there is somebody else living in the property. Otherwise they would not have requested a waiver. The fact that they are aware means that they will cover their own interests ie ensure the property is saleable and all third party rights are waived.

You are right in that you could borrow and move someone in tomorrow. However in that instance the bank will already have full priority when it comes to selling as you will have agreed to that when you took out the mortgage.
 
PM1234 said:
However in that instance the bank will already have full priority when it comes to selling as you will have agreed to that when you took out the mortgage.
Click to expand...

I would gladly agree to that here. It seems patently unfair that for a lein of 10% on a property they request someone to cede 100% of their interest.

Anyway, has this any further implications for my partner aside from this Mortgage?

Thanks again.
 
It is standard procedure when a lender is aware that somebody else is living in the property as their primary residence. The property must be saleable and waiving a percentage only isn't viable for this to be the case.

When your partner signs the waiver she is agreeing that the lenders interests come before hers. She will have to sign in the presence of a solicitor and full implications should be explained by the solicitor when she is doing so.
 
Is it possible that your Solicitor thinks you are married. You say that she needs to sign a waiver under the Family Protection Act but this doesn't make any sense. The Lender will usually require ( as will your Solicitor) a Declaration stating that the property is or is not a family home. If it is not a family home then only you declare so (unless your partner is on the Title Deeds) if it is a family home then you both have to sign. If you are not married then it is not a family home it doesn't matter if you are both living there 20 years with 7 children it is still not a family home and if she is not on the Title Deeds then she doesn't have to sign a Family Home Protection Act Declaration.

Perhaps she does need to sign some waiver but I don't think it has anything to do with the Family Home Protection Act. If your Solicitor mentioned this act I suspect he/she believes you are married and the property is a family home.
 
Hi Covey,
You talk about your partners interest in the house. She is not on the deeds, you are not married and she does not contribute to the mortgage. Therefore, legally she has no interest in the house.

If the bank repossess your property, she will be kicked out.
 
Thanks all.

It's not a family home in the legal sense. I am also of the opinion above that this waiver seems unneccessary.
 
Where a cohabiting couple reside and only one name on the title deeds if the partner not named on the title deeds but has made contributions to the mortgage, the purchase price, deposit or upkeep of the house they may have a beneficial interest in the property which may be enforced in court. Lenders will request that such third party interests are waived in favour of the lender.

If you are married and unnamed on the title deeds then a Consent of Spouse is required.
 
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