Changing the folio of a mortgaged property

Greetings,

As the title suggests we want to change the folio of our mortgaged property to provide our neighbors with planning permission for entrance to their house. Their house is old and has a history of mismanagement, so in order for them to get retention planning permission for the house their entrance has to be relocated.

The new boundary wall has been drawn up by an engineer and conforms to the requirements so that our neighbors should get retention for their house.

We are putting our property up for sale soon so we want this to go as smoothly as possible.

My concern is, should we and how do we notify the bank of the change in the folio?

Thank you in advance for any pointers.

By "change your folio" do you mean you want to transfer some land to your neighbours (so that they will be able to construct a planning-compliant entrance)?

If you're transferring even a small amount of land to your neighbours you don't "notify" they bank; you ask for their agreement. You won't be able to effect the transfer without it.

I thought as much, I just wanted to get more information on what is involved.

The bank has the title and your solicitor has to

a) ask them for the title deeds
b) get permission from the bank to do the change

If this adversely affects your title and brings down your value the bank might not agree. Your neighbor should pay all legal costs.

But if you are selling you are presumably repaying the mortgage? Then your solicitor will be getting the title deeds and this can be sorted out then.
It doesn't seem to be a legal/title problem for you, but it's nice to be nice.

Yes we are selling and will be repaying the balance on the mortgage, so it makes sense that all this can be put in place before the folios are changed at the point of sale.

But you'll have to make it clear, obviously, to intending purchasers that they will not be getting the whole of the current folio, and your contract of sale will have to address this point.

This could spook prospective purchasers — they might think they would be buying into some kind of boundary dispute. So if you can get this dealt with and out of the way before offering the (slightly reduced) property for sale, it might be no harm to do that.

You need a deed of partial release from the bank. They may or may not want you to pay a lump sum to them before they'll give you one. You'll certainly need a solicitor to get the title deeds from the lender and act on your behalf in the sale (I'm assuming it's not a charitable donation) of that portion of the folio to your neighbours.

Unless you have a particularly close relationship with your neighbours or you're getting a particularly good price for the part of the folio you're transferring I'd be inclined to just sell up and leave this for the new owners to deal with if they want. Aside from anything else, sale of part of the property plus a planning application for retention could be a red flag for planning issues. It signals unauthorised development next door in the past, and if your neighbours have a track record of ignoring planning laws....