The implications of signing an occupiers’ consent

Where 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 it is possible that we are acting for your spouse or partner, or it is possible that we are acting for you.  We will remind you whether this is the case when sending you 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).

Where a lender is making a mortgage loan available to a borrower, they want to be able to ensure that they can recover possession of the property without a hitch if the borrower fails to pay or they breach the other terms of the mortgage.  For this reason lenders usually insist that all adult occupiers sign an occupiers’ consent of 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 re-possess 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, and other rights or interests that you may have or may acquire in the property.

There are a number of 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 that 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.