A home reversion plan is one of the most common forms of equity release that gives pensioners the opportunity to release equity from their home thus allowing them to obtain an additional income source. A home reversion provider will purchase a percentage of or the entire home. In most cases, homeowners will not receive the full value of their home. They will only receive a percentage of the current market value of the home. This is normally between 20 and 60%.
In order for the home reversion process to be finalized, a lifetime tenancy agreement must be signed allowing homeowners to remain in their homes until they die. This is the main reason why the home reversion company does not pay the full market value of the property. During this process the applicant of the home reversion plan as well as the home reversion company require legal representation.
In most cases, legal representation comes in the form of equity release solicitors. These solicitors must apply the rules and regulations laid down by the Safe Home Income Plans or SHIP. The equity release solicitors also need to sign a certification on completion of the home reversion plan.
This certificate is a confirmation that the application is fully aware of the agreement they are entering into. It is to confirm that they are aware of the benefits, impacts, and consequences of the home reversion plan.
In most cases, homeowners are allowed to appoint their own solicitor. The only restriction is that the solicitor of the homeowner cannot be appointed by the home reversion company. The applicant and the lender cannot use the services of the same solicitor. Having legal representation during a home reversion process is very beneficial. Homeowners will not only have someone to give them legal advice but they will also have someone to explain the meaning and implications of all related legal terms thus allowing them to fully understand what it is that they are getting involved in. Some solicitors are not members of SHIP and are not recommended. Only equity release solicitors who are members of SHIP are recommended since that this is the only way to ensure that the solicitor will be able to best represent you.
