Charge on a property

[REM2112]

I have lent a friend some money. I would like to secure it on a share of a property she owns, which is fine by her. Can I sensibly DIY, or do I need a lawyer?

[anonymous-user]

Sensible to use a solicitor and ensure that your friend has also taken legal advice too.

[Louis Balfour]

REM2112 said:

I have lent a friend some money. I would like to secure it on a share of a property she owns, which is fine by her. Can I sensibly DIY, or do I need a lawyer?

Why do you want to go to that trouble, out of interest?

[REM2112]

I suppose if she snuffs it and I’m an unsecured creditor of her estate.

[Louis Balfour]

REM2112 said:

I suppose if she snuffs it and I’m an unsecured creditor of her estate.

Ah ok.

[Welshbeef]

Isn’t there an issue here that the first charge on the property is mortgage company and isn’t it the case they can reject any other charges on the property.

[p4cks]

Indeed. Presuming that there's sufficient equity and presuming they aren't too arsed about it not being a FCA regulated business

[Simpo Two]

Welshbeef said:

Isn’t there an issue here that the first charge on the property is mortgage company and isn’t it the case they can reject any other charges on the property.

But life insurance would pay off any mortgage.

The only snag I see is timeframe - if the friend can't or won't repay, the OP has to wait for them to move or die before he gets his money back.

When I lent some money to a friend a few years ago he insisted on a written contract agreeing the repayment terms. Hence, had he decided to play silly buggers, I could have sued the arse off him

[REM2112]

There’s no mortgage

[NickCQ]

REM2112 said:

Can I sensibly DIY, or do I need a lawyer?

I think your chances of drafting something that would survive litigation by other heirs are probably quite low. If recovering from the estate is a real possibility it's probably worth socialising this with the other beneficiaries.

[anonymous-user]

REM2112 said:

There’s no mortgage

Then yes, you can take a legal charge to protect your position.

• Both parties will need proper legal advice. (To avoid, "I didn't know what I was signing".)
• It needs a sensibly written legal document to record what interest (if any) is payable, when the loan is to be repaid and the consequences of breach etc.

[REM2112]

Thanks everyone. Lawyer it is.