The States of Jersey have passed a law to make major changes to the registration of mortgages, known locally as hypothecs, which should reduce work for borrowers and lenders.
Under the current law, mortgages must be re-registered in the public registry every 10 years, despite the majority of mortgages being for a term of 25 or 30 years. The current system, which has long been seen as out-of-step with modern lending practices, has been amended with the result that a mortgage will only require re-registration after 30 years.
This means that, with effect from the end of this week, the vast majority of new and existing mortgages will never need to be re-registered. The change will be welcomed by borrowers who, at present, must pay all re-registration costs, including both the lender’s and the borrower’s legal fees. The change in the law is also good news for lenders as the current system places a significant administrative burden on them.
Jane Needham of Bedell Cristin’s Property team said: “This change in the law is terrific news for both lenders and borrowers. Lenders will see a huge reduction in administration time and, perhaps more importantly, borrowers will no longer be faced with two sets of legal fees as well as Court fees, totalling hundreds of pounds.”