Why should borrowers pay for Deed of Release?

THE EDITOR: When a property owner has completed all of the required payments in a mortgage agreement, the lending bank issues a Deed of Release which is a registerable confirmation that all the borrower’s responsibilities have been met and that there are no more encumbrances on the property. Up until now, banks have charged the borrowers for the cost — attorney’s fee and stamp duty — of preparing the deeds of release.

I am challenging the right of the lending institutions to ask borrowers to take any part of the responsibility for providing confirmation of payment. In every other type of business transaction, it is the receiver of the funds who bears the responsibility for providing the receipt and the cost thereof (you will recall that, until recently, the receiver also stood the cost of the stamp duty on all receipts). It goes against all business principles (and possibly the law) that the person who pays must provide proof of his own payments. I have heard the argument that the cost of preparing the Deed of Mortgage is also passed on to the borrower. This is quite in order, since in that case, although legal fees and stamp duty are also involved, the cost is for the preparation of an agreement — not a receipt, as is the case with the Deed of Release. I have also heard the argument that banks have always charged the borrowers for the Release. This does not support a case for continuing a practice which is wrong, at least in principle. My suggestion is that all borrowers should refuse to pay any cost for preparing or providing Deeds of Release. Clearly, this is the responsibility of the lenders, and they must be made to meet this responsibility. It would also be interesting to hear other views on this issue, since I have not yet heard a single logical argument in defence of the banks’ action.

PETER POPPLEWELL
Diego Martin