Guidance

Practice guide 30: Approval of mortgage documentation

Updated 17 June 2024

Applies to England and Wales

Please note that HM Land Registry’s practice guides are aimed primarily at solicitors and other conveyancers. They often deal with complex matters and use legal terms.

1. Introduction

Throughout this guide, the word ‘charge’ is used to mean the document creating a legal charge on registered land which is to be registered as a legal charge under section 27 of the Land Registration Act 2002, and which is executed as a deed by the borrower (or all the borrowers, if there is more than one). For the purposes of this guide, the terms ‘charge’ and ‘mortgage deed’ are interchangeable.

Unless otherwise indicated, what is said below about charges applies also, with all necessary changes, to deeds of variation/priority/postponement. Please note that whereas the application form for the approval of a legal charge is form ACD, for all other deeds it is form ADD. Where reference is made in this guide to form ACD this should be read as being form ADD if approval is being sought for a deed of variation/priority/postponement.

The questions addressed are those that we expect to be most often asked by lenders and their representatives.

2. The advantages of applying for approval of charges

Each approved form of charge is given a reference that allows staff at HM Land Registry offices to access the lender’s details from a computer database. This speeds up registration and reduces the incidence of clerical errors.

We give the lender a computer code that generates its name and address in the register with guaranteed accuracy. This cuts out typing errors.

Standard restrictions may be applied for in an approved charge. A standard restriction is a restriction in a form set out in Schedule 4 to the Land Registration Rules 2003. Form P in Schedule 4 is the relevant restriction where the consent of the proprietor of a charge is required. The normal requirement for an application in form RX1 is waived.

An application to register a restriction contained in an unapproved charge not in form CH1 will be ignored unless it is accompanied by an application in form RX1.

You may apply in an approved charge for notice of an obligation to make further advances to be entered in the register. Unapproved charges not in form CH1 must be accompanied by a form CH2.

3. Apply for approval

Send 2 copies of the charge, with a completed application in form ACD, to:

HM Land Registry Croydon Office
Commercial Arrangements Section
PO Box 2079
Croydon CR90 9NU

or

HM Land Registry Croydon Office
Commercial Arrangements Section
DX 8888
Croydon 3

Or you can email the application to [email protected]

You will need a separate form ACD for each charge.

We will give the charge a reference that will have to appear in the charge itself, so please remember to apply for approval before the charge is used.

Please remember also that form ACD contains important undertakings that must be complied with.

We will approve forms of charge within 20 working days.

If you are applying for approval of a digital mortgage, see Digital mortgages.

4. Amend a charge after it has been approved

Generally, the amended document will have to be lodged at HM Land Registry Croydon Office for reapproval with a form ACD. But, if the amendments are very minor, we may waive this requirement.

Never assume that reapproval will be unnecessary, no matter how minor the amendments seem. Before you print the document, telephone HM Land Registry Croydon Office to find out whether or not a form ACD application will be needed.

Form ACD contains an undertaking that if you amend either the charge or any separately held but incorporated mortgage conditions, the amended conditions and charge must be lodged for reapproval with a form ACD. Where an approved deed of charge is changed without an application for reapproval we will register the charge on the basis of the approved version. This could lead to entries being made in the register which are different to those in the amended charge and the withdrawal of approval for the charge.

5. After the charge has been approved

HM Land Registry Croydon Office gives each approved form of charge a unique reference beginning with the letters ‘MD’. This reference allows staff at HM Land Registry offices to access details of the document on a computer database. The ‘MD’ reference must also clearly appear on any scanned image of the charge that is lodged for registration.

After the charge has been approved, one copy will be returned to you with any amendments shown in red.

The charge and any separate but incorporated mortgage conditions must not then be changed.

If HM Land Registry Croydon Office is not notified of any proposed changes to the approved charge, the details on the database may be wrong and incorrect entries may be made in the register.

6. Criteria for approval

To qualify for approval, a charge must contain or provide for (as the case may be):

• a date
• the names and addresses of the borrower(s)
• the name and address of the lender, including its company registration number, if any
• a description of the property being mortgaged, including its title number
• a valid charging clause
• a valid execution clause with provision for attestation

We would not approve any charge that failed to satisfy one or more of these criteria. We would also not approve any charge that contained an application to register a restriction not in a standard form.

When we approve a form of charge, we will look at the execution clause. If we identify an issue with that clause we will let you know at same time as approving the form of charge. However, the execution clause does not form part of the approval. This is because:

• different execution clauses will be required depending on the type of borrower or whether, for example, it is executed under a power of attorney, and
• execution of the charge as a deed will need to comply with the law current at the time it is executed.

We can only assess whether the form of execution used on an approved form of charge is valid once it is submitted for registration. It is the parties’ responsibility to ensure forms of execution are appropriate on all documents, including approved forms of charge.

A deed of variation/priority/postponement must contain or provide for (as the case may be):

• a date and the names and addresses of the parties
• a description of the property, including its title number
• identification of the charge or charges affected by the deed
• a clause setting out the terms of the variation/alteration in priority/postponement
• a clause permitting valid execution in accordance with the following paragraph

A deed of variation must provide for execution by the borrower(s). A deed of priority or postponement must provide for execution by the proprietor of any charge of equal or inferior priority prejudicially affected by the alteration in priority or postponement.

7. Form of charge

At present, charges, unlike transfers, do not have a mandatory form. Lenders may use form CH1 if they wish.

8. Fee

There is no fee for approval of forms of charge.

For the assessment of fees for the registration of charges, refer to the current Land Registration Fee Order, see HM Land Registry: Registration Services fees.

9. Withdraw of approval from a form of charge

If a lender failed to keep to its undertakings in panel 6 of form ACD or panel 5 of form ADD, we might withdraw approval from its charges.

10. Digital mortgages

Digital mortgages rely upon a template of a mortgage deed that has been created by HM Land Registry. This is based upon content that has been provided by a lender and approved at HM Land Registry. A digital mortgage template is approved by granting an ‘e-MD’ reference. To apply for a digital mortgage template you will need to complete form e-ACD and send this to HM Land Registry by email to the address given in the form.

The digital mortgage template will follow the standard format set out in form e-ACD. The digital mortgage contains a standard charging clause. If you need to further define the monies secured by the charge, you can use the additional provisions panel within form e-ACD to do this.

Once the content has been approved, we will create a digital template. This can then be accessed by a conveyancer who has been given the e-MD reference to create individual digital mortgage deeds. The allocated e-MD reference will automatically appear on the face of the deed.

Approval of a digital mortgage also requires the creation of a digital template. Because of this, we aim to complete the approval process within 20 working days. Any subsequent amendment of the digital mortgage template will require completion and approval of a new form e-ACD.

11. Things to remember

Before you lodge your application for approval make sure:

• you have completed and signed form ACD
• you have enclosed a draft copy of each document you want approved
• the documents you have lodged meet the criteria for approval
• you have allowed 20 working days for the approval to be completed before the documents are brought into use

Before you use the approved form of charge, make sure you have:

• entered the MD references as shown on the approved document
• made the other changes (if any) which we have prescribed

We only provide factual information and impartial advice about our procedures. Read more about the advice we give.