“The tenant is under an obligation to surrender the lease in the circumstances mentioned therein”

The above statement is sometimes found in the Property Register of a leasehold title beneath the details of the lease.

When it does appear, it is usually the first indication that the lease may be a shared ownership lease.

Some mortgagees, especially when they are taking a second charge on a property, instruct its solicitors that they do not need to check the lease when certain criteria are met.

Indeed, some mortgagees do not even use solicitors when securing an advance by way of a second legal charge and again, they do not insist on seeing a copy of the lease.

The above statement should therefore act as a warning.  I have seen many smaller lenders make seemingly sound second charge advances only to discover that when the first mortgagee repossessed and sold, there were insufficient funds to pay the second charge.  This was because the lease was owned on a shared ownership basis with 50% of the sale proceeds payable to the housing association.

Therefore, whatever the lender’s policy, if you see the above statement or notice that the original landlord was a housing association, check the lease to make sure.  Sometimes the Land Registries do fail to register the above statement even when the lease is owned on a shared ownership basis but this is quite rare.

It is always advisable to instruct a solicitor to check the lease in any event.