Implications of signing an occupiers’ consent

If you are going to be living in a property but are not one of the mortgage borrowers, a lender will usually ask you to sign an occupiers’ consent or waiver.  These notes briefly explain the occupiers’ consent or waiver that you are being asked to sign.

If you have been sent these notes, we may be acting for your spouse or partner, or we may be acting for you.  We will remind you of this when sending these notes.

If we are not acting for you, these notes are for your information only and do not constitute legal advice.  You may wish to consider taking independent legal advice (and in some instances a lender may insist that you do so).

When a lender makes a mortgage loan available to a borrower, they want to ensure they can recover possession of the property without a hitch if the borrower fails to pay or breaches the other terms of the mortgage.  For this reason, lenders usually insist that all adult occupiers sign an occupiers’ consent or waiver.  Unless and until that consent is signed, they may not release the mortgage funds.

In signing the consent or waiver form, you are acknowledging that the property where you will be living has a mortgage secured against it.  In short, this means that the lender can repossess the property if the loan repayments are not made or if there are any other breaches of the mortgage conditions.

In acknowledging that there is a loan, you are effectively agreeing to surrender any rights that you have to live in the property should the lender obtain an Order from the Court for sale.  You are also postponing, in favour of the bank, any other rights or interests that you may have or may acquire in the property.

There are several circumstances where an adult occupier of a property may acquire rights in that property even if they are not on the title.  Signing a consent or waiver form does not make those rights disappear, but it makes those rights rank lower in priority than the lender’s rights to repossess.

You should sign an occupiers’ consent or waiver only if you are entirely sure that you understand what it means.