Are you going to build your own house?
Are your parents going to give you a hand, by way of a site or some financial assistance?
If you are borrowing money from a lender and you are in receipt of a benefit from, for example, a parent you will be required to have a Deed of Confirmation executed by your parents.
Deed of Confirmation
A Deed of Confirmation is a deed which, in short, confirms the priority position of the mortgage to the bank.
Let me explain by way of an example: suppose you are being given a site by your parents to allow you build a house. The bank has agreed to loan you the money to build the house and will want to secure its loan on the site of your newly built property.
The bank will be concerned that if they were ever obliged to try to enforce their security that your parents will claim to have an equal right in the property as a result of the gift of the site to you. The purpose of the Deed of confirmation, then, is to reassure the bank that their security will take priority over any beneficial interest your parents might claim, and the bank will be able to go ahead and enforce its security.
What’s in a Deed of Confirmation?
Each lender’s Deed of Confirmation, supplied in its loan pack to the borrower’s solicitor, will contain similar provisions. These will include:
- The Deed of Confirmation must be executed (signed) by any person who may have a beneficial interest in the property
- The Deed of Confirmation will further assure the mortgaged property to the lender and confirm and ratify the security created by the Mortgage, and its conditions
- The Deed also states that all the rights, powers and entitlements that the lender has in respect of its mortgage can be exercised without any notice to the beneficiary (the parent in this example)
- The beneficiary cannot exercise any of its rights or entitlements against the mortgaged property or the mortgagor (borrower)
- The beneficiary confirms that any right he/she/they have is postponed and will rank after the mortgage to the bank
- The lender can assign or transfer the benefit in the Deed of Confirmation
- The governing Law-Ireland-will be stated
There will also be a consent of spouse form to be signed by the spouse where the mortgaged property is the family home/shared home, and the spouse is not a joint owner and is not executing the Deed of Confirmation.
This form will confirm the full and free consent of the spouse and state that he/she does not and will not have any beneficial interest in the mortgaged property.