Deed of Postponement: What It Is and When You Need Advice

What does a deed of postponement actually do?

When more than one party has a financial interest in a property, the law puts them in an order of priority. Broadly, whoever registered first gets paid first out of the proceeds if the property is sold to repay debts. A lender advancing new money almost always wants to be at the front of that queue, and will make it a condition of the loan.

A deed of postponement is how the existing interest holder agrees to move down. Nothing is given up outright — the interest still exists, and the person keeps whatever rights they had — but it now ranks behind the new lender's charge. In practice that means if the property is sold at a loss, the new lender is repaid in full before anything reaches the postponed interest. That is exactly why the postponing party is usually told to take independent legal advice first.

The situations where one is usually required

Four scenarios account for most of the deeds of postponement we see:

• Remortgaging with a Help to Buy equity loan. The equity loan is secured by a second charge. When you remortgage, the new lender wants first position, so the equity loan administrator has to agree to postpone behind it. This is the single most common reason people search for the term.
• A Right to Buy discount charge. Where a property was bought at a discount, the local authority normally registers a charge to protect the repayable discount. Further borrowing usually requires that charge to be postponed.
• An existing second charge behind new first-charge borrowing. Where a second-charge or secured loan already sits on the property and the homeowner remortgages, the second lender is asked to postpone behind the incoming first charge.
• A private or family interest. Where a parent, partner or other family member contributed to the purchase and holds a beneficial interest — often recorded in a declaration of trust — the lender will normally require that interest to be postponed behind its charge before it will lend.

It is the fourth situation that most often generates a request for independent legal advice from a private individual. The first three are usually handled between institutions, though the borrower still has to sign.

Why independent legal advice is required

If you are postponing an interest of your own, you are agreeing to something that reduces your protection and benefits somebody else — usually the lender, and indirectly the borrower. You are not the one receiving the money. That imbalance is precisely the situation in which lenders worry about undue influence: the concern that you signed because a relative asked you to, or because you did not fully grasp what postponing meant.

So the lender asks for evidence that a solicitor independent of the transaction explained the document to you and satisfied themselves that you signed freely. That evidence is the independent legal advice certificate. Without it, most lenders will not complete. Our guide to undue influence and the Etridge guidelines explains where the requirement comes from.

What the appointment covers

The solicitor advising you reads the deed itself, then works through what it means for you specifically: what interest you currently hold, what the new lender is borrowing against, where you will sit if the property is sold at a loss, whether the postponement is limited to the new loan or extends to future borrowing, and what happens if the borrower falls into arrears. You will be asked whether anyone has pressured you, and given the chance to ask anything without the borrower present.

The appointment is a private 30-minute video call, one person at a time, with nothing to print or post. Upload the deed and the related paperwork when you book, complete the online identity check, and your signed certificate is emailed the same working day as the appointment.

Deed of postponement, occupier consent or deed of trust?

These three documents turn up in similar circumstances and are easy to confuse, so it is worth being clear which one you have been sent:

• A deed of postponement moves an existing interest or charge behind a new lender. The interest survives; its priority changes.
• An occupier consent form is signed by an adult living in the property who is not on the mortgage, postponing their right to occupy so the lender can take possession if it ever needs to. See occupier consent forms.
• A declaration or deed of trust records who owns what share of a property in the first place. It creates the interest rather than reordering it. See deeds of trust.

Some lenders bundle two of these into one document — an occupier's consent and postponement deed is exactly that combination — and the appointment covers every part of whatever you have been sent.

How quickly, and what it costs

Fees are fixed and charged per person: Standard £150 for an appointment within two to three working days, Fast Track £250 from the next working day, and Priority Same-Day £350 for the earliest available slot, including today. On every tier the certificate is emailed the same working day as the appointment — the fee changes only how soon the appointment happens. Full detail is on the pricing page, or book your appointment and pick a time that suits you.