1. Conducting an Official Title Search
Before any charge can be registered, a thorough title search is essential. This step involves reviewing the property’s title to:
- Verify Ownership: Confirm that the person initiating the charge is the rightful owner.
- Identify Encumbrances: Determine if any existing liens, mortgages, or other restrictions affect the property.
2. Drafting the Instrument of Charge
Once the title has been verified, the next step is to prepare the Instrument of Charge. This legal document details the terms of the charge and forms the basis of the agreement between the parties involved. The document must be drafted accurately to reflect the terms agreed upon by both the lender and the property owner.
3. Execution of the Charge
The execution process requires the participation of all relevant parties:
- The Chargor: The property owner initiating the charge.
- The Chargee: The lender providing the funds.
- Additional Signatories: In situations where the borrower is different from the property owner, all parties must sign to validate the charge.
4. Obtaining Necessary Consents and Clearances
Before registration, several consents and clearances must be secured depending on the property type and its location:
- Leasehold Properties: Consent from the lessor is required, along with a Land Rent Clearance Certificate.
- Agricultural Land: Approval from the Land Control Board is necessary.
- Municipal Properties: If the property is within a municipality, a Land Rates Clearance Certificate from the local authority must be obtained.
5. Stamp Duty Assessment and Payment
The next step is the assessment of stamp duty, which is calculated at 0.1% of the loan amount. Once the duty is assessed, prompt payment is required.
6. Lodging and Stamping at the Lands Registry
After the stamp duty is paid, the Instrument of Charge must be lodged at the Lands Registry. Here, the document is officially stamped, a process that further authenticates its legal standing.
7. Final Registration of the Charge
The final step involves registering the charge at the Lands Registry:
- Standard Registration Fee: A fee must be paid to complete the registration process.
- Title Document Endorsement: The original title document of the property is submitted alongside the Instrument of Charge, allowing the registrar to make an official endorsement. This endorsement serves as a public record of the charge, ensuring transparency and legal recognition of the lender’s interest.