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Buachaill
Buachaill, Barrister
Category: Law
Satisfied Customers: 10623
Experience:  Barrister 17 years experience
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I purchased an end of terraced house with a plot of land to

Customer Question

I purchased an end of terraced house with a plot of land to the side in 2007 with a mortgage from Northern Rock.I have built a separate new house on the land with N/R permission. The mortgage now with Engage credit will need to be redeemed in 2017 (interest only) I will have to re-mortgage to pay off Engage and will need to separate the property title from one to two before I put in for a new mortgage or can it be done simultaneity?
Submitted: 2 years ago.
Category: Law
Expert:  Buachaill replied 2 years ago.
1. The answer to your question depends on whether you want to offer only one or the two houses as security when you get your new mortgage. If you only want to give the original house as security for the new mortgage - which would be the preferred option - you should split the overall site into two folios in the Land Registry before you seek a new mortgage. Otherwise, if you only want to mortgage one of the properties and give that as security, this is only possible if you have split the Folio before you get the new mortgage. Otherwise, the bank will seek to get the greatest asset possible as security, with the result that both your houses would be subject to the mortgage. It is better if only one of the two houses is subject to the mortgage, as then you can sell the other one without seeking the permission of the bank. You are better off owning one asset which is not subject to a mortgage, as then you can do what you want with this property. Only give the bank the minimum necessary security, namely, one house. Don't give the bank both houses as security. Divide the folio before you go getting a new mortgage.
Customer: replied 2 years ago.

Thanks for being so prompt.I do appreciate your thoughts but I already had mortgaging the original property in mind.My concern is will the land registry allow me to split the one into two with out Engages permission?

Regards

Expert:  Buachaill replied 2 years ago.
2. You don't need Engage's permission to split the folio, but the mortgage will continue to apply to both folios. Engage will merely be notified by the Land Registry of the splitting of the Folio. You will also have an obligation under the terms of your security with Engage to notify them of any changes in the security. So you personally, have a free standing obligation to notify Engage that you are splitting the Folio. It is only on a remortgage that you can give only part of the divided property as security.
Customer: replied 2 years ago.

Hi I have looked on the land registries web page but cannot see which part would relate to my enquiry. Could you give me the exact legal terminology for what I am trying to do. Many Thanks

Expert:  Buachaill replied 2 years ago.
3. The exact legal terminology is called a division of the folio. I have looked at the land Registry guides here https://www.gov.uk/topic/land-registration/practice-guides but none of them relate to Division of the Folio. Essentially, you are subtracting one part of the Folio from the remainder. It is the same as a transfer of part of a Folio. Here is the first of the Forms you use https://www.gov.uk/government/publications/change-the-register-ap1. Here is the second of the forms you use https://www.gov.uk/government/publications/registered-titles-part-transfer-tp1. In the forms you will find a guide on how to effect the transfer and how to register it. You can do it yourself as there is nothing occuring other than the Folio being divided.4. Please RATE the Answer. This is how the Expert gets paid from the money you have deposited with the website. No Rating, no payment and no incentive to answer any further questions.
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Customer: replied 2 years ago.

Hi One further question. Do I have to use a professional to survey booth properties (measure) to accompany the land registry forms?

Many Thanks

Expert:  Buachaill replied 2 years ago.
5. there is no requirement to use a professional survey, but normally one would be used so as to make the map accurate.
Customer: replied 2 years ago.

Hi I know this is a new question.After I have changed the land registery and remortgaged, I would like to put the remaining property

(Mortgage free) in a trust for my Grand children with the income coming to me until my death would this be posable. Perhaps you could give me an estimate of cost? Regards

Expert:  Buachaill replied 2 years ago.
6. Essentially, you need to put the property in a trust whereby the trustees hold the property with a life interest for you, so that you will get the income from the property for the remainder of your life with a remainder over to your grandchildren who will inherit it upon your death. The setting up of this would involve the drafting of a Trust Deed (£1500) as well as the conveyance to the trust of the property (£850). So you should get it done for £2300 in total.
Customer: replied 2 years ago.

Thanks for that. Would there be a problem for my children to be the trustees or would I need a Bank or Solicitor to be trustees or some other professional. Regards

Expert:  Buachaill replied 2 years ago.
7 . Given that this is going to be a family trust, it is not really appropriate to use professional trustees. This would involve fees of £1000-2000 per annum. So you should instead use your grandchildren or someone else within the family. There is very little to being a trustee of a family settlement such as this. A little advice if there is some difficulty is sufficient.
Customer: replied 2 years ago.

Hypothetically, If I wanted instead of my Grand children to be the reciprocant of the trust, I wanted my Great Grand children to be the beneficiaries would their be a problem setting up the same trust?

Expert:  Buachaill replied 2 years ago.
8. No, there would not be any problem if you wanted your great grandchildren and not your grandchildren to benefit under the trust. The setting up of the trust would be no different, in a legal sense.
Customer: replied 2 years ago.

Thank you. One further question, If I were to become mentally incapacitated would the state have any recourse on the trust (The Property) other than the income. Regards

Expert:  Buachaill replied 2 years ago.
9. No, the STate would only have recourse to the income from your life interest in the property. The remainder would not go to the State as you would not own it. Additionally, no one would want to buy a life interest where the life of the person involved (you) needed healthcare. So, it would only be the income that would be in issue. AFter you died, the property would then revert to your grandchildren or great grandchildren.
Customer: replied 2 years ago.

Good Morning. One final question can you personally or your practice do any of this work in real time?

Expert:  Buachaill replied 2 years ago.

10. Dear Bob, I regret that I cannot as I am not resident in the UK.