CML updates instructions on disclosing incentives
Published: 10 August 2011 | Author: Bernard Clarke
The CML is bringing out an updated version of its disclosure of incentives form, which must be filled in by all builders or developers if they are planning to sell a newly-built property requiring a mortgage. The changes are being implemented in response to the introduction of new marketing practices by developers, and to make the wording clearer.
The CML already requires conveyancers working on behalf of lenders to complete a 'disclosure of incentives' form when working on transactions involving newly-built, renovated and converted property. The form is intended to make sure that any incentives offered to buyers by the developer are clear to lenders, so they have a reliable view of what is being paid for the property in net terms.
The new form should only be used for instructing conveyancers after 1 October. Conveyancers should continue to use the existing form for any transaction where it has to be filled in for the first time before the end of September.
Lenders will need to make sure that their own staff – and the valuers and conveyancers they work with – know about changes to the form. As before, conveyancers working for a builder or developer selling a property need to ensure that the completed form is forwarded to the conveyancer acting for the lender.
Valuers will be instructed by the lender to ask for a copy of the form when visiting the property to undertake a valuation. If the site visit takes place before 1 October, the valuer should complete the existing form, which will then be used until the transaction is completed – even if the date of completion is after 1 October.