We do not consider it necessary at this stage to amend the CML Lenders’ Handbook for England and Wales to take this change into account. Although early completion may alter the order of events the actual process remains the same. Conveyancers are protected as far as subsequent registrations are concerned and this is a welcome move for both lenders and conveyancers. In connection with the Handbook, the Land Registry has stated that:-
"Completing the applications to register the transfer and new charge subject to the existing charge would not appear to affect the obligations of any party in relation to that existing charge.
Early completion will not prevent the new charge taking effect as a first legal charge; it can never become a first charge until the existing charge is discharged. This is so whether or not the new charge is entered in the register. The entry of the new charge under early completion simply protects the priority of that new charge as against any other interest whose priority is not protected at the time of registration."
The changes will not alter the requirements set out in paragraph 14.1.1.1 of the Handbook which require the conveyancer to register the mortgage as a first legal charge at the Land Registry. Lenders do not regard the retainer as being complied with until this is achieved.
We assume that the conveyancing professional bodies will be issuing guidance but in the meantime conveyancers may want to ensure they have appropriate measures in place to check compliance with this requirement.
More information on this can be found on the Land Registry's website.
© Council of Mortgage Lenders 2006