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Last Updated: Saturday, 21 May 2005, 13:47 GMT 14:47 UK
Homeowners must keep deeds safe
By Paul Lewis
BBC Radio 4's Money Box

If documents are lost it could cause problems when people sell

Two major mortgage lenders are returning vital documents to homeowners about the properties they have lent money on.

C&G, part of Lloyds TSB, started returning documents this month and will send them back to a million mortgage customers in England and Wales by the end of the year.

Nationwide is returning documents to all customers who have borrowed money since 1999.

Lenders no longer need to keep the title deeds for properties in England and Wales.

Legal ownership in those countries now depends only on the information held by the Land Registry electronically.

There are some title deeds that don't have their contents put onto the land register
Philip Freedman, solicitor
But Philip Freedman, a property partner with solicitors Mishcon de Reya, told BBC Radio 4's Money Box programme the documents can contain vital information:

"Information at the Land Registry is sufficient to show that you own the property and that they have a mortgage over the property.

"But there are some title deeds that don't have their contents put onto the land register.

"So for example you might have agreed when you bought the property to pay something towards drainage or to maintain fences, and not all of those obligations are put onto the land register."

Sale delay

The documents can relate to works, searches and guarantees
Mr Freedman also warned that many other documents which lenders are now returning must be kept, such as guarantees from builders, details of building regulation, or planning approval for alterations, and he continued:

"You'll be asked for all these things if you do come to sell the property. Even if the building society doesn't think they need them, you do need them.

"Solicitors are very keen nowadays to check that any alterations that were carried out were done properly, and if they can't show that they were, they will have to report it.

"Surveyors have to look into it, special insurance may have to be taken out, and that can delay your sale.

It enables them to save a huge amount in storage costs
Mr Freedman
"So for you to be ready to sell your property you have to have those bits of paper ready."

And he said it was good news for the lenders rather than borrowers.

"It's a good idea for them because it enables them to save a huge amount in storage costs."

Improved procedures

Michael Coogan, Director General of the Council of Mortgage Lenders, said that was not the reason for the huge mail-out.

"I don't think cost is a driver but clearly one of the benefits for lenders is that they aren't holding as many documents," he said.

What do you think of the big property document mail-out?
"The reason it's being done is that the information that used to have to be kept by lenders for their own security is no longer needed because of improvements in the conveyancing process.

"And that's likely to continue as we move to more and more being done electronically rather than with paper."

The change currently applies only to England and Wales. Registers of Scotland and Land Registers of Northern Ireland will move to electronic registration in the future.

Any home owner who is sent documents by their mortgage lender should keep them safe.

The solicitor who did the conveyancing on the property may hold them but may charge a fee.

BBC Radio 4's Money Box was broadcast on Saturday, 21 May, 2005, at 1202 BST.

The programme was repeated on Sunday, 22 May at 2102 BST.

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