GENERAL CONDITIONS TO SOLICITORS (NORTHERN IRELAND)

Transcription

1 DANSKE BANK GENERAL CONDITIONS TO SOLICITORS (NORTHERN IRELAND) EFFECTIVE DATE 1 JANUARY 2019 Danske Bank is a trading name of Northern Bank Limited and is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Registered in Northern Ireland Number: R568. Registered of fice: Donegall Square West, Belfast BT1 6JS. Northern Bank Limited is a member of the Danske Bank Group.

2 INDEX GENERAL CONDITIONS Contents INTRODUCTION 3 1. ACTING FOR THE BANK 3 2. IDENTIFICATION 4 3. FIRST LEGAL MORTGAGE 4 4. CONTEMPORANEOUS PURCHASE or REMORTGAGE 5 5. INVESTIGATION OF TITLE - GENERAL 6 6. SEARCHES/ENQUIRIES PURCHASE 7 7. SEARCHES/ENQUIRIES REMORTGAGE 8 8. STATUTORY CONSENTS AND APPROVALS 9 9. ROADS AND SEWERS - ADOPTION ACCESS AND EASEMENTS VACANT POSSESSION - THIRD PARTY INTERESTS - GIFTS NEW DWELLINGS HOME WARRANTY SCHEMES CONSENT, RECEIPTS AND NOTICE TO LESSOR APARTMENTS AND DWELLINGS WITH SHARED FACILITIES AND/OR COMMON AREAS MANAGEMENT COMPANIES TRANSACTIONS AT AN UNDERVALUE/INSOLVENCY CONSIDERATIONS INVESTMENT HOUSING LOAN FACILITY VALUATION REPORT MARRIAGE INDEMNITY INSURANCE INSTALMENTS NORTHERN IRELAND CO-OWNERSHIP HOUSING ASSOCIATION LIMITED CERTIFICATE OF TITLE COSTS AND OUTLAYS, SDLT AND REGISTRATION POST-COMPLETION YOUR RECORDS AND DATA PROTECTION 18 2

3 INTRODUCTION These General Conditions are issued to solicitors to be used in conjunction with any Letter of Instructions issued by us relating to the proposed offer of finance to the Borrower named in the Letter of Instruction. You will have received our Letter of Instruction and specific instructions ( the Special Conditions ) in relation to the particular transaction. Our General Conditions and Special Conditions must be read together but in the event of a conflict our Special Conditions will prevail. We will accept the Law Society of Northern Ireland approved Certificate of Title for Home Loans. The specific instructions referred to in the Preamble to the Certificate of Title are the Bank s Letter of Instruction, the Special Conditions and these General Conditions. Throughout these General Conditions any references to the Bank, we, our and us shall mean Northern Bank Limited and references to the Borrower are to each Borrower named in the letter of instructions and the offer of mortgage. The Property is the Property referred to in the letter of instruction. References to the Mortgage shall also mean the Charge where appropriate. The headings used in these General Conditions are for reference purposes only and do not form part of the General Conditions or in any way limit or affect the nature and scope of each condition. Where you are reporting a matter to us you should provide a concise summary of the issue and any associated risks, and your recommendations. Our staff are not legally qualified and you should take this into account when preparing your report. The Bank will rely on you as its sole legal adviser in this transaction. These General Conditions are effective in relation to letters of instruction dated on or after 1 January ACTING FOR THE BANK (a) You must only accept our instructions if you hold a current practising certificate and you have sufficient current professional indemnity insurance cover for the transaction. (b) If there is any conflict of interest you must not act for us. If you cannot act for us then you must return our instructions immediately together with all documentation that we have sent to you. (c) In addition to the normal conflict of interest considerations, you must report to us if you or any other individual in your firm or any spouse, partner, child, parent, brother or sister of such a person has or will have a legal or beneficial interest in the Property (whether alone or jointly with any other). (d) It is acknowledged and hereby authorised that you may make disclosures of information you consider are relevant and necessary to the Borrower which may include information about the property, or financial information or other information. 3

4 (e) These General Conditions do not affect any responsibilities you have to us under the general law or any practice rule or guidance issued by the Law Society of Northern Ireland. (f) These General Conditions are not intended to be exhaustive and you are expected to deal with any other matters relevant to the transaction but not specifically provided for herein. The standard of care which we expect of you is that of a reasonably competent solicitor acting on behalf of a mortgagee. 2. IDENTIFICATION a) You must follow the guidance published by the Law Society of Northern Ireland on mortgage fraud, money laundering and undertakings and, to the extent that they apply, comply with the Proceeds of Crime Act 2002 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended. b) If you are not familiar with the vendor s solicitors you must verify that they are currently on record with the Law Society of Northern Ireland as practising at the address they have provided to you. 3. FIRST LEGAL MORTGAGE General a) On completion, we require a fully enforceable first and only legal mortgage over the Property. All existing mortgages and charges must be redeemed on or before completion, unless we agree that an existing mortgagee may be postponed to rank after our Mortgage. Please refer to our Special Conditions where relevant. b) If during the course of the transaction you become aware that a second or subsequent mortgage is to be created over the Property and no reference has been made to this charge in the Special Conditions then you must report this immediately to the Bank and await further instructions from the Bank before proceeding. c) The Legal Mortgage is to be taken in the Bank s standard form, which is available online. The most up to date version of the Bank s mortgage documentation must be used and therefore the document versions available online must be downloaded for each particular transaction. No amendment is to be made to the form without the prior written consent of the Bank. Please advise us of any alterations sought and confirm the reason they are required and the implications for the Bank s security. Any approved alterations must be initialled by all signatories to the Mortgage. d) You should complete the Mortgage and have it executed by the Borrower and witnessed by a solicitor or two independent witnesses. You should advise the Borrower and any other person required to sign, on the terms of the Mortgage. Please complete the Schedule to the Mortgage using the appropriate format as suggested in our Schedule to Mortgage (available on-line) (and amended as necessary). e) The Mortgage should be registered in the Registry of Deeds or Land Registry (as appropriate) as soon as possible after completion. If the Mortgage is being taken contemporaneously with the purchase of the property then the Mortgage Deed should be registered contemporaneously with the Conveyance/Lease/Fee Farm Grant/Assignment/Transfer to the Borrower. 4

5 f) You must obtain any consents required for the registration of the Mortgage. g) If the Mortgage is to be executed under a power of attorney you must let us know why the Borrower is unable to execute the Mortgage personally. You should ensure that the power of attorney is valid and the attorney is duly authorised to execute the Mortgage. If there are co- Borrowers then one joint borrower cannot appoint the other as attorney for the purposes of this transaction. If the power of attorney is a general power of attorney and was completed more than 12 months before the completion of our Mortgage, you must obtain a statutory declaration to confirm that it has not been revoked. We will rely on you to ensure the Mortgage has been properly executed, and any applicable Land Registry requirements have been met. The original or certified copy power of attorney (together with the statutory declaration if applicable) must be placed with the deeds. Land Registry Title h) The Bank s Charge should be prepared and submitted in duplicate for registration and Certificate of Charge in the shortened form taken up from the Land Registry. i) You must obtain a Priority Search for the Bank s Charge and maintain such a Search until the Bank s Charge has been lodged for registration in the Land Registry. j) If the property is subject to compulsory first registration in the Land Registry the Charge must be registered within the prescribed period. 4. CONTEMPORANEOUS PURCHASE or REMORTGAGE a) Where the amount of the loan is to be paid to you to enable you to complete a purchase or remortgage of the Property by the Borrower, it will be made available to you on the express condition that the loan is used for no purpose other than the completion of the particular transaction unless the Bank has otherwise agreed in writing. In remortgage transactions the amount of the Bank s loan may have been rounded up and therefore any surplus loan funds not exceeding 1,000 (one thousand pounds) may be released to the Borrower. b) In the case of a contemporaneous purchase of the Property you must notify the Bank if: the purchase price for the Property is not the same as set out in our instructions; there is any variation to the purchase price; an incentive or a discount is offered by the vendor; the deposit has been paid direct to the vendor (other than an amount not exceeding 1,000 which has been paid as a holding or reservation fee to the vendor or the vendor s agent); a sub-sale is involved; or the purchase appears to be at an undervalue. c) Unless otherwise referred to in the Bank s Special Conditions, the Property must be acquired in the name of the Borrower, or if the transaction is a remortgage the title to the Property must be in the name of the Borrower. Any discrepancy in this should be reported to the Bank. 5

6 5. INVESTIGATION OF TITLE - GENERAL a) You must examine the title of the Property to ensure that the Borrower will obtain a good and marketable title to the Property and any appurtenant rights free from prior mortgages or charges (unless otherwise agreed by the Bank) and free from encumbrances (other than ground rent) and any onerous or unusual covenants and restrictions which at the time of completion might reasonably be expected to materially adversely affect the value of the Property or its future marketability. In doing so, you must raise all enquiries and requisitions of the vendor and/or the Borrower as appropriate. b) If the Property is held (or to be held) under a lease the Bank will not regard the title as good and marketable if there is any provision for forfeiture on bankruptcy or insolvency or other analogous event of the Borrower or any superior tenant. A right of re-entry for non-payment of reserved yearly rent is acceptable to the Bank. (The right of re-entry and termination provision in the standard form of Lease from the Northern Ireland Co-Ownership Housing Association Limited is acceptable to the Bank.) c) You must ensure that the Borrower will be registered with absolute title (if freehold) or, if leasehold, with a good leasehold title with not less than seventy five years of the term of the Lease still subsisting. d) A Possessory title will be acceptable to the Bank if you are satisfied in the case of lost title deeds that there is a satisfactory explanation of the loss by way of an acceptable statutory declaration and defective title indemnity insurance will be in place at completion. e) In cases where the Possessory title has been acquired by adverse possession the Bank will require defective title indemnity insurance unless you are satisfied that there are satisfactory statutory declarations evidencing the possession, that the land with possessory title has no building erected on it, the Borrower has confirmed that it is not proposed to have buildings erected on the land and the land with possessory title is not used for access or the provision of services. f) A Qualified title will be acceptable to the Bank if defective title indemnity insurance is in place or you are satisfied that the qualification will not prejudice the Bank s security. g) You must satisfy yourself that the Vendor is the beneficial owner or the registered owner of the Property (save where the sale is being carried out by a mortgagee or personal representative). h) You must make enquiries as to whether there is any breach of any covenants affecting the Property and inform us immediately of any breach of an enforceable covenant. Defective title indemnity insurance will be required unless you are able to confirm in writing that the breach has continued for 20 years or more, there is nothing to suggest that there is any pending action or action threatened in respect of the breach and that the Bank s security is not prejudiced. 6

7 i) You must report to us if the Property purchase is in relation to a back to back sale or if the vendor has not owned the Property for at least 6 months. You must advise: the name and address of the person who sold, or will be selling, the Property to the Borrower s vendor; the amount paid or to be paid for the Property by the vendor; details of any known connection between the original vendor and the Borrower s vendor, or between the vendor and the Borrower; and details of any work carried out to the Property between the two transactions. You do not need to report to us if the vendor is a personal representative of the registered owner, an institutional mortgagee, a receiver, trustee-in bankruptcy or a liquidator/administrator. j) You must ensure that the Property is adequately identified by a map. k) You must advise the Bank if there is any covenant prohibiting any disposition, assignment, subletting etc. of the whole of the Property without the consent of any third party, or there is any restriction on resale e.g. options/pre-emptions/right to buy charges or similar arrangements that will affect the Bank s security. The Bank will accept a restriction on the owner s ability to mortgage/charge or assign/transfer the Property only where it is not possible to have the restriction removed or varied and the restriction is confined solely to obtaining the lessor s/transferor s consent. If consent is required then provision must be made in the transfer/lease /assurance that such consent cannot be unreasonably withheld. (The restriction on assignment in the standard form of Lease from the Northern Ireland Co-Ownership Housing Association Limited is acceptable to the Bank.) Where the Property is a former NIHE property you must ensure that the repayment of discount/option to purchase conditions will be fully complied with and/or that the NIHE charge is cancelled. l) If any part of the Property comprises or is affected by a flying freehold you must ensure title to the Property incorporates (or will incorporate prior to completion of the Bank s mortgage) satisfactory and enforceable rights of support, protection, repair and maintenance together with appropriate rights of entry. You do not have to report the flying freehold to us. The Bank will not generally accept freehold flats as security. m) If the Property is leasehold or held under a fee farm grant you must satisfy yourself that the provisions of the Property (Northern Ireland) Order 1997 have been observed and that the creation of that lease and/or fee farm grant is not prohibited by the Order. 6. SEARCHES/ENQUIRIES PURCHASE You must make all usual and necessary Searches and enquiries. All acts or adverse matters appearing on the property certificates and searches should be satisfactorily explained or removed if they could materially adversely affect the property value or its future marketability. Your enquiries and searches should include:- Local Authority Property Certificate DOE Property Certificate* NIHE Property Certificate (where appropriate) 7

8 Statutory Charges Search Enforcement of Judgments Office Search against the Vendor and the Borrower** Bankruptcy Search against the Vendor and the Borrower** Registry of Deeds Search against all parties who appear on title for a period of not less than twenty years up to and to show registration of the assurance to the Borrower (if applicable) and our mortgage registered as a first mortgage and, where applicable, the Land Registry CFR certificate Land Registry Folio Search and Priority Search Land Registry map search where any of the Property is unregistered Search in Companies House against the vendor/management company where appropriate. * Where a reference to sewers traversing the property appears on the DoE property certificate you must obtain a map from NI Water. ** In the case of sales by personal representatives the bankruptcy and EJO searches should be against the deceased. Date of Property Certificates and Searches - Subject to the proviso for new dwellings below, all property certificates and the statutory charges search must not be more than 6 months old at the date of completion fixed in the contract and should be placed with the title deeds for forwarding to the Bank. All other certificates and searches must not be more than 3 months old at the date of completion fixed in the contract. New dwelling - where the Property is a dwelling house under construction within a building development the Bank is prepared to accept the statutory charges search and property certificates obtained by the developer/vendor for the whole site at the time the entire development site was purchased by the developer/vendor provided written confirmation is also obtained that nothing of a material or significant nature has occurred and no notices have been served which would result in any material change to the replies in the search and property certificates. The Bank will also accept a Certificate of Search against the developer/vendor. 7. SEARCHES/ENQUIRIES REMORTGAGE You must make all usual and necessary Searches and enquiries. All acts or adverse matters appearing on such Searches should be satisfactorily explained or removed if they could materially affect the Property value or its future marketability. Your enquiries and searches should include:- Statutory Charges Search Enforcement of Judgments Office Search against the Borrower Bankruptcy Search against the Borrower Registry of Deeds Search against all requisite parties for a period of not less than twenty years up to and to disclose registration of the Bank s Mortgage Land Registry Folio Search Land Registry map search where any of the Property is unregistered It will not be necessary for you to obtain Property Certificates from the local authority, DOE and NIHE provided: 8

9 a) Where the property was constructed and any alterations or additions thereto were completed more than 10 years prior to the date of these instructions, satisfactory property certificates were obtained when the property was purchased by the Borrower and are with the documents of title. b) Where the property was constructed or any alterations or additions thereto were completed within 10 years from the date of these instructions, any requisite Planning Permission, Building Control Approval, NHBC Ten year Notice or Architect s Certificate of Satisfactory Completion are with the title. The statutory charges search (and property certificates where appropriate) must not be more than 6 months old at completion and should be placed with the title deeds for forwarding to the Bank. All other certificates and searches must not be more than 3 months old at the date of completion. 8. STATUTORY CONSENTS AND APPROVALS a) If the Property is a dwelling house under construction or constructed within the past 10 years, or any building or conversion work has been carried out to the Property within the past 10 years, you must ensure that all appropriate consents and approvals (for example, Building Control Notice of Passing of Plans and Completion Certificate, Planning Permissions and Discharge Consent under the Water (Northern Ireland) Order 1999), have been obtained and are placed with the title deeds. If there has been a change of use of the Property which would require Planning Permission then copy of same should be obtained and placed with the title deeds. b) You must also ensure that any conditions attached to said Consents and Approvals have been complied with. In particular, you must ensure that the Grant of Planning Permission does not contain a restriction (either a condition or limitation) limiting occupation to a specific person or type of person for example, to a person employed or last employed in agriculture or forestry. You must report any such condition to the Bank as the Bank would not normally accept a property the subject of such a restriction as security. c) If Building Control Approval and/or the Building Control Completion Certificate have not been obtained for building or conversion works carried out to the Property within the period of 10 years from the date of our instructions, a Regularisation Certificate should be obtained. If there is no evidence of Building Control Approval or a Regularisation Certificate for building or conversion works carried out to the Property more than 10 years after the date of our instructions then you should report the matter to us so that we can refer to the Valuer (where one has been appointed). You should also advise the Borrower of the risks in proceeding with the transaction without evidence of Building Control Approval or a Regularisation Certificate and recommend, where appropriate, that a structural survey is carried out to confirm the works are structurally sound. 9

10 d) In relation to the installation and/or conversion of central heating systems, if there is no evidence of Building Control Approval for the system and the system was installed or converted more than 5 years from the date of our instructions then you do not need to provide a Regularisation Certificate for the system. You should, however, recommend to the Borrower that the system is checked to confirm that it is properly operational. e) The Consent to Discharge of Effluent for any septic tank serving the Property should be obtained and placed with the documents of title. If the Consent has not been obtained you should refer the matter to the Bank enclosing a map of the property indicating the site of the septic tank and soakaway and advise the Bank of the steps to be taken to rectify the matter. f) A valid Energy Performance Certificate for the Property should be obtained and placed with the title deeds. g) If you are on notice that any part of the Property is built over or in the vicinity of a pipe vested in the relevant water/sewerage undertaker you must obtain evidence that the relevant undertaker has consented to same. The Bank will accept a suitable Indemnity Insurance policy in the absence of such consent. 9. ROADS AND SEWERS - ADOPTION a) You must confirm that the roads and sewers immediately serving the Property have been adopted, or alternatively that they are covered by a suitable agreement and bond. b) If the Property is in a development and the road fronting the Property is not or will not be adopted then you must report this to the Bank. We will require confirmation that there is no breach of any statutory requirement in respect of the roadway, that adequate rights of way are in place for access to and from the Property, the road has been or will be made up to an acceptable standard prior to completion and that there are suitable arrangements for the repair and maintenance of the road. The Bank may seek further information from you or the Borrower and may also refer to the Bank s valuer where appropriate.. You should ensure the Borrower is aware of their potential liability for repair and maintenance costs. c) You must confirm that the sewers serving the Property have been adopted, or alternatively that they are covered by a suitable agreement and bond. If the sewers will not be adopted we will require confirmation that the sewage system is fully functional, there are suitable arrangements for the repair and maintenance of the system and that there have been no disputes regarding servicing and maintenance of the system. 10. ACCESS AND EASEMENTS a) You must confirm that the Property has the benefit of all necessary rights of access with or without vehicles at all times to and from adopted roads. Where such access is over, through, and along lands in the ownership of a third party, you must obtain satisfactory written evidence of the existence of such easement and send it to the Bank with the documents of title. We expect you to 11

11 approve the written evidence on behalf of the Bank. If you consider that there is any risk to our security then you must effect a suitable indemnity insurance policy. Please refer to the section on indemnity insurance for further guidance. b) Where the route of any services to the Property (such as water, electricity, sewage) is over, through or along lands in the ownership of a third party, you must confirm that the Property has the benefit of all necessary rights, easements and wayleaves in respect of all such usual services and obtain satisfactory written evidence of the existence of all appropriate easements for those services and send it to the Bank with the documents of title. We expect you to approve the written evidence on behalf of the Bank. In relation to soakaways, you must comply with the Law Society s Home Charter Scheme Practice Direction 2015/2. For all other services, if you consider that there is any risk to our security then you must effect a suitable indemnity insurance policy. Please refer to the section on indemnity insurance for further guidance. c) All such rights must be enforceable by the Borrower and the Borrower s successors in title. d) Where access to the Property from adopted roads, and/or the route of any services to the Property (such as water, electricity, sewage), is over, through, and along other lands in the ownership of the Borrower ( the servient lands ) not mortgaged to the Bank, you must ensure that the Borrower grants the Bank all necessary powers to create easements for such access and services to the Bank in the Mortgage and such powers are registered as a burden against the servient lands. e) You must advise us of any rights. easements or wayleaves which are required over the Property to be mortgaged to the Bank in favour of other lands owned by the Borrower and not to be mortgaged to us. You will need to provide full details including a draft schedule of the rights required including plans as appropriate. 11. VACANT POSSESSION - THIRD PARTY INTERESTS - GIFTS a) If the Borrower already owns the Property he must be in sole possession of all of it. If the Borrower is purchasing the Property the Borrower must obtain clear vacant possession of all of the Property on completion unless the facility is an Investment Housing Loan and the Property is already occupied by a tenant in which case you should refer to the relevant section on Investment Housing Loans. b) If the Bank is aware of the identity of any person(s) (other than the Borrower) who will be occupying the Property after completion of the mortgage then such person(s) will be listed in the Special Conditions and you should refer to the Special Conditions for further instruction. c) You should ask the Borrower for confirmation that the information, if any, about occupants given in our Special Conditions is correct. If it comes to your attention that any person aged 17 or over (other than the Borrower) will be in occupation of the Property after completion of the Bank s mortgage/charge or that any other person has or may have a legal or equitable or financial interest in the Property (e.g. by providing part of the purchase monies), and such person(s) is/are not listed in the Special Conditions hereto then you must inform the Bank immediately. 12

12 d) Where the Bank is on notice that a third party has provided funds to the Borrower which will be used by the Borrower to part fund the purchase of the Property we will advise you what steps you need to take in the Special Conditions. If it comes to your attention that any third party not referred to in the Special Conditions is making any such contribution then you must report this matter to the Bank and await further instruction. In all cases you must be satisfied that the third party will not acquire any interest in the Property on foot of the contribution (e.g. the contribution is an absolute gift without condition to the Borrower). e) You must ensure that all persons presently in occupation of the Property (other than the Vendor(s)) complete a consent to the sale of the Property to the Borrower. f) You should advise the Borrower that any letting of the property is prohibited without the Bank s consent. This condition does not apply to the Bank s Investment Housing Loan product. g) You must report to the Bank immediately if you become aware that the Property is subject to any form of Lease or Licence agreement in respect of solar PV panels installed on the Property. 12. NEW DWELLINGS HOME WARRANTY SCHEMES a) If the Property is a dwelling house under construction or constructed within the last 10 years, we require the work to the Property to be covered under a new home warranty scheme acceptable to us. The following schemes are acceptable: NHBC; Zurich Municipal (provided there is already a warranty in place or the Property is in a development which has already commenced in both cases, Zurich must confirm that it will honour the warranty); CRL Management Ltd (CRL); Global Home Warranties Ltd; International Construction Warranties Ltd (ICW); Premier Guarantee; and Ark Insurance Group Ltd. If cover is provided by the NHBC and the property is a flat or maisonette with common parts, the Common Parts Ten Year Notice should also be placed with the deeds. b) For all new build properties which have the benefit of a new home warranty you must ensure that you have in your possession the warranty issuer s cover note stating that the Property has received a satisfactory final inspection and that a full new home warranty will be in place on or before legal completion. You must also ensure that the builder is registered with the relevant home warranty scheme at the date of completion. c) All appropriate warranty documentation (including notices of assignment where appropriate) must be obtained and placed with the title deeds. d) If the Property is not covered by a home warranty scheme the Bank may be prepared to accept a Certificate of Completion from a suitably qualified Architect/Chartered Surveyor which must be obtained and placed with the deeds. 13

13 13. CONSENT, RECEIPTS AND NOTICE TO LESSOR a) You must obtain any necessary consent to or prior approval of the assignment/transfer to the Borrower. b) A clear current ground rent and service charge receipt must be obtained on completion. c) If the Property is leasehold then on completion of the Bank s mortgage, notice thereof should be served on the lessor, and any other appropriate party e.g. management company, whether or not this is required by the Lease. The Bank s standard form Notice to Lessor should be used (available on-line). d) Any consents and receipted notices must be placed with the title deeds. 14. APARTMENTS AND DWELLINGS WITH SHARED FACILITIES AND/OR COMMON AREAS a) You must ensure that there are satisfactory easements created in favour of the Borrower in particular for access, support, shelter and protection and all other easements for the use and enjoyment of the Property (including any garage or parking space). b) There should also be adequate covenants for the insurance of the building and maintenance and repair and upkeep of the whole building or estate of which the Property forms part including the common structure, foundations, main walls, roof, common parts, common services and grounds. c) The lease should confirm that all of the residential leases in the building are in a common form and contain suitable provision for the mutual enforceability of lessees covenants. If these do not exist you must report to the Bank. d) If a block insurance policy is in place then a copy of the up to date insurance policy should be obtained. If there are any specific insurance requirements in the lease then these should be advised to the Bank prior to completion. e) You must report to us if you are made aware of a potential significant increase in the level of the service charge in the three year period after the date of our instructions. f) Conversion of an existing property into flats may constitute a breach of a covenant to use the Property only as a private dwelling house and in such circumstances written consent of the Lessor/Grantor must be obtained and placed with the title. 14

14 15. MANAGEMENT COMPANIES a) If the property is held subject to a covenant requiring membership of a management company, then you must place with the title deeds the Share Certificate in the name of the Borrower together with an undated stock transfer form signed by the Borrower. b) You should satisfy yourself that the management company is in existence and operational and is complying with all relevant legislation. c) Any regulations made by the management company in addition to the covenants contained in the Lease must be obtained and placed with the deeds. 16. TRANSACTIONS AT AN UNDERVALUE/INSOLVENCY CONSIDERATIONS a) You must advise us immediately if you become aware of any bankruptcy proceedings in relation to the Borrower. b) If the Property has been the subject of a gift or a transaction at an apparent undervalue you must ensure that you have a clear bankruptcy search against the donor, and if the gift was made within the past 5 years that the search is also clear as at the date of the Bank s mortgage. You must also be satisfied that the Bank will acquire our interest in good faith and that the Bank will be protected by virtue of the statutory protections set out in the Insolvency (Northern Ireland) Order 1989 and the Insolvency (No 2) Act If you cannot be satisfied that the Bank s interest under its mortgage will be protected by the statutory protections then you must arrange defective title indemnity insurance. c) The Bank must be advised if any part of the purchase price is to be deferred or left outstanding as a loan. 17. INVESTMENT HOUSING LOAN FACILITY a) If the facility is an Investment Housing Loan and it is the Borrower s intention to let the Property, or the Property is subject to pre-existing tenancy which is to continue, then you should forward a copy of the proposed lease, or if the lease is already in existence, a copy of the lease itself, to the Mortgage Processing Unit. It is important to note that the Bank will not advise the Borrower on any property investment decision or the legal obligations to be discharged by the Borrower acting as a landlord (including the requirement to be registered with the Landlord Registration Scheme). b) You should confirm to the Bank that the terms of any tenancy agreement (whether proposed or pre-existing) does not create a tenancy under which the rent recoverable would be restricted by statute or in respect of which the tenant would by statute or otherwise enjoy security of tenure after expiry of the contractual term. You must ensure that if a new tenancy is being created the 15

15 provisions of the lease/tenancy agreement will not come into force until after completion and registration of the Bank s Mortgage. c) You should obtain the written approval of the Bank to the terms of the proposed/pre-existing lease/tenancy agreement before completion, save that the Bank s consent shall not be required to a letting at a rent which is the full open market rental value of the Property and is not restricted by statute or in respect of which the tenant would by statute or otherwise enjoy security of tenure after expiry of the contractual term. d) If the Property, or any building within which the Property is situate, is in multiple occupation (as defined by the Housing (N.I.) Order 2003 and any amending legislation) you must confirm that the Property is registered pursuant to the statutory registration scheme for houses in multiple occupation. 18. VALUATION REPORT a) We will inform you in our Special Conditions if you will be provided with a Valuation Report on the Property. b) If you receive a Valuation Report from the Bank you must advise the Borrower that the Valuation Report obtained by the Bank is not a structural survey and is based upon a limited inspection and that the Borrower should not in any way rely on this Report when deciding whether or not to proceed with the purchase. If a fuller Report has not already been obtained then the Borrower should be advised that the Bank recommends that the Borrower should obtain a structural survey report based on a fuller inspection of the Property. This advice should be given irrespective of the age of the Property and whether or not the Bank has obtained a written valuation report. c) Where we have confirmed that we are to provide you with a Valuation Report you must not complete the transaction until you have had sight of the Valuation Report and you can confirm that your Certificate of Title is unaffected. d) We do not expect you to assume the role of a professional valuer but if you consider that the Valuer has not valued the Property based on materially correct assumptions or information or there is any material discrepancy between the description of the Property in the Valuer s report and the title deeds and documents please let us know and we will refer to the Valuer. 19. MARRIAGE In the event that the Borrowers inter-marry between date of receipt of these instructions and completion of the Bank s mortgage, a certified copy of the Marriage Certificate should be obtained and placed with the title deeds. 16

16 20. INDEMNITYINSURANCE You must effect an indemnity insurance policy whenever these General Conditions identify that this is an acceptable course to us to ensure that the Property has a good and marketable title at completion. The draft policy should not be sent to us unless we ask for it. Where an indemnity insurance policy is already in place you should examine the policy terms to confirm that it is suitable for the Bank s purposes or whether a new policy is required. The policy should be on risk as at the date of completion and the original policy documentation should be placed with the title deeds. Where indemnity insurance is effected: You must approve the policy terms on our behalf and ensure that it is for our benefit and for the benefit of the Borrower and any subsequent owner or mortgagee; and The policy cover must be for an amount not less than the market value of the Property at completion; and You must ensure or seek satisfactory assurance s that all relevant information is disclosed to the insurer; and The policy must not contain conditions which you know would make it void or prejudice our interests; and You must provide a copy of the policy to the Borrower and explain why the policy is required and that a further policy may be required if there is further lending against the security of the Property; and You must advise the Borrower to comply with any conditions of the policy and to notify the Bank of any potential claim in respect of the policy. 21. INSTALMENTS If the Property is to be constructed (or is in the course of construction) under a building contract and the building costs are to be paid by instalments as the work progresses then the Bank will advance the loan in instalments on the following conditions:- a) the Bank s mortgage must be completed at the time the first instalment of the advance is paid over and the legal estate in the Property must be vested in the Borrower at that time. b) you should request a payment for the amount of the first instalment only and not for the full amount of the loan. c) further instalments should be requested by letter to the instructing Branch and these will be made available subject to any necessary re-inspection. d) where re-inspection is required than at least 10 clear business days notice should be given when requesting release of subsequent instalments. 17

17 22. NORTHERN IRELAND CO-OWNERSHIP HOUSING ASSOCIATION LIMITED Where the Borrower is a participant in the scheme operated by the Northern Ireland Co-Ownership Housing Association Limited (Co-Ownership) ( NICOHA ) and the Borrower is acquiring a leasehold estate in a percentage of the Property, the Bank s interest must be protected by a Master Mortgage Agreement between the Bank and NICOHA to be put in place at completion and placed with the title deeds. In those cases where the Bank s advance is to be used to refinance a loan which was granted to finance the Borrower s original purchase, a fresh Master Mortgage Agreement between the Bank and NICOHA must be in place at completion and placed with the deeds. 23. CERTIFICATE OF TITLE a) You should not submit the Report on Title unless it is unqualified or the Bank has authorised you in writing to proceed notwithstanding any issues you have raised with us. b) The Bank s standard form of Report on Title should be completed and submitted to the Mortgage Processing Unit at least FIVE clear business days before the date of completion or TEN clear business days if the property has to be re-inspected before the loan is made available. c) Unless the loan is being made under a Danske Re:pay Facility, it will be made available by CHAPS transfer to your firm s Bank on the business day prior to the proposed completion date as stated in your Report on Title. d) Under no circumstances will the loan be made available until a satisfactory Certificate of Title has been received by the Mortgage Processing Unit and, in the case of newly constructed property, until the Bank has received and is satisfied with the final inspection report on the Property. e) The Report on Title must be signed by a partner of your firm or other authorised signatory and, if required by the Bank, evidence of the authority of the signatory must be made available. You must notify us in writing if any matter comes to your attention before completion which would render the Report On Title untrue or inaccurate and, in those circumstances, you must defer completion pending our authority to proceed and you should contact the Mortgage Processing Unit for directions on returning the funds to the Bank. f) If specified in the Offer Document the Bank s fees will be deducted from the loan. g) The Borrower will be charged interest from the date the loan is made available to you. If the transaction does not proceed to completion you should contact the Mortgage Processing Unit for directions on returning the funds to the Bank. 18

18 h) You should note that although your Report on Title will be addressed to the Bank, we may at some time transfer our interest in the mortgage. In those circumstances, our successors in title to the mortgage and persons deriving title under or through the mortgage will also rely on your Report on Title. i) If we have issued a Binding Offer letter then this section applies. Where the proposed completion date is less than 7 days after the date of the Binding Offer letter (a copy of which you should ask for before submitting the Certificate of Title) you should advise the Borrower on the consequences of proceeding and in particular you should ensure that the Borrower is aware that the purpose of the reflection is to compare offers, assess their implication and make an informed decision. By proceeding before the end of the Reflection Period the Borrower is confirming acceptance of the mortgage offer without the need for further reflection and has decided to bring the Reflection Period to an end by this conduct. 24. COSTS AND OUTLAYS, SDLT AND REGISTRATION Your costs and outlays in connection with this transaction (including VAT thereon as appropriate) are payable by the Borrower and you should recover these direct from the Borrower. You must ensure that you hold an SDLT return signed by the Borrower and that you have collected the SDLT registration fees from the Borrower before completion. Failure to do so will not relieve you of your obligation to the Bank to submit the SDLT return, pay the SDLT and complete all necessary registrations (including Compulsory First Registration(if applicable) within the required time limits). 25. POST-COMPLETION a) As soon as possible after completion and registration of the mortgage, an updated copy of the Folio (if applicable) containing all entries on the Folio up to and including registration of the Bank s mortgage and an up to date Land Registry map for the Folio should be obtained and placed with the documents of title and all documents of title together with the Bank s mortgage (or original Certificate of Charge in Land Registry cases) should be forwarded to the Mortgage Processing Unit. For new building developments it is acceptable for the vendor s title to be recorded on CD. b) The Bank will confirm in writing that it has received the documents of title. The deeds and documents will not be examined by legally qualified staff. It is your responsibility to ensure that all deeds and documents are enclosed in accordance with these instructions and your Undertaking to the Bank and to keep us informed of any undue delay in sending the deeds and documents to us. c) You agree to provide, on request, a copy of the Land Registry acknowledgement of the application for registration of the Bank s mortgage and advise the Bank in the event of the mortgage being returned to you unregistered and not re-lodged promptly. 19

19 26. YOUR RECORDS AND DATA PROTECTION You must keep your file relating to the transaction for a minimum of 6 years from the date of our mortgage. You should retain on file our instructions, the signed long-form Certificate of Title (if you did not submit it to us) and any other documents and correspondence which a reasonably competent solicitor would keep. Storage by microfiching or data imaging is acceptable. You should not part with your file or any documents or correspondence comprising the file without our consent. Where you are processing personal data (as defined in the Data Protection Act 1998) on our behalf, you must; take such security measures as are required to enable you to comply with obligations equivalent to those imposed on us by the seventh data protection principle in the 1998 Act; and process such personal data only in accordance with our instructions. In addition, you must allow us to conduct such reasonable audit of your information security measures as we require to confirm your compliance with your obligations in this section. 20