What is a Deed of Release
05/09/2019
70
3 min read
The Leasehold and Freehold Reform Act 2024 was passed on the 24th May 2024, but is not yet in effect and the date for this is not yet clear. We will update our content as and when the finalised legislation is published. Read more - Expected changes
A Deed of Release is a legal document which removes a previous claim on an asset. You typically come across one in the conveyancing area when your mortgage lender transfers the title of your property to you once you've fully redeemed your mortgage.
The deed, sometimes known as a Deed of Reconveyance, documents your release from the previously binding agreement you signed which obliged you to pay back the monies you borrowed originally to pay for your dwelling.
Your lender had a charge on your property (a right to be paid out of any monies realised from a repossession sale of your property) and this document formally removes the charge.
This article examines:
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How does a Deed of Release work?
As referred to above, when you borrow money from a lender to buy a home, the lender takes a legal claim against the house as collateral and holds the title to the property until the loan is paid off.
Once you've met all the mortgage payment terms or fully repaid your loan, your lender's legal team draws up the deed of release form and in it reports that:
- you've repaid the loan in full under the terms required; and
- the lender has removed its charge or 'lien' and has transferred full title to you.
The lending account is then closed.
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What other uses of Deeds of Release are there?
Restrictive covenants - also known as deed restrictions - are written into leases to limit what an owner can do with a property. They might, for example, enforce quiet hours during certain times or forbid the keeping of pets .
If your landlord agrees to the removal of such a restrictive covenant, your solicitor can draw up a Deed of Release of Restrictive Covenant to be signed by the landlord which formally removes the restriction. This might be a Deed of Release Right of Way if the focus of the restriction was a landlord's right of way, for example.
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Is a Deed of Release the same as a Deed of Relinquishment?
No, although the terms are fundamentally the same.
Deeds of Relinquishment (or reliquishment deeds) are legal documents by which a person can give up on his or her legal rights over a property to someone else with their consent.
A relinquishment deed can only be executed towards a member of the family or a co-owner of the property and no-one else in most cases.
This transfer of rights however is only lawful if the person to whom the deed of relinquishment transfers property to actually has an interest in taking the property and completely consents to taking it up in its entirety, otherwise the deed is void and unenforceable.
Release deeds also specifically need a consideration - i.e. money changing hands from one side to the other - to be valid, whereas a consideration may or may not feature in a relinquishment deed.
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