Mortgaged ownership
Where a lender has a charge, unable to be satisfied before transfer, additional parties become involved. The transfer of property to a new legal owner will require the mortgage lender to at best assign the borrowing but more likely redocument and possibly reassess the lending proposition.
Their approvals and documentation team as well as their own solicitors being willing, will add time to the transaction and may give the ceding Sipp operator reason to believe the property transfer could not complete within 30 days.
More complex arrangements
Property ownership can be in many forms. A long leasehold may require the approval of the superior landlord before a transfer of lease can take place. Some property ownership is fractional through syndicates where transfer may require documentation to be completed by other syndicate members. Such situations may also lead to the transfer extending beyond 30 days.
It can be seen then, that the number of parties required to participate in the transfer process – and their willingness and speed to act – will have a direct bearing on the decision as to whether a transfer can meet the FCA’s 30-day deadline.
What the industry needs is a consistent approach – perhaps with some degree of guidance. From who this guidance might come is as yet uncertain. It is unlikely to come from the regulator and the divergence of treatment within the industry is also unlikely to yield a common consensus opinion.
Martin Tilley, director of technical services, Dentons Pension Management
