We use the Electronic Discharge (ED) process to redeem our registered charges in England and Wales.
An ED is a discharge of a registered charge sent electronically by a lender direct to Land Registry. Land Registry's computer system makes a number of checks. If everything is in order, it cancels the charge entries. In most cases, the charge entries will be instantly and automatically cancelled on receipt of the discharge.
The difference between an ED and an electronic notification of discharge (END)
An END is an electronic message to Land Registry authorising the cancellation of the charge entries. To cancel the charge you must combine it with a formal application to Land Registry to discharge the charge. When the Land Registry receive the application, their staff will cancel the entries relating to the discharge.
An ED cancels the charge entries automatically and, in most cases, immediately. It does not require a separate formal paper application to discharge the charge. It is a computer to computer, system driven process so does not require manual intervention.
The reason Land Registry introduced EDs
For e-conveyancing, there is a requirement to have a system of discharging registered charges automatically. Although EDs can operate effectively solely for discharges, it will form part of an integrated e-conveyancing system.
EDs will overcome some of the problems related with DS1s and ENDs, especially the inherent delays. We have introduced new processes, which automate and speed up the way we deal with redemptions.
What to do if you act for a borrower
We will tell you in the redemption statement that we intend to discharge a charge by an ED. You must tell us which charges you will be redeeming. You will need to pay off the charge in the normal way. Provided we receive the correct payment, and it is a case to be discharged by an ED, we will send an ED to the Registry. If accepted, the registry will cancel the charge entries automatically. We will then write to you to confirm that the charge has been successfully discharged.
If there is another party involved, you will need to agree on a revised form of undertaking. This is to allow for the electronic discharge.
What to do if you act for a buyer
You should proceed with the transaction in the same way as you would with any other. The only exception is that you will need to allow for the different method of discharge by agreeing on a revised form of undertaking. For example the seller's conveyancer will send the moneys required to discharge the charge and to inform you when the charge has been discharged. Or to provide you with a DS1 if the lender has been unable to transmit an ED or an END. The arrangements for completion should be no different from normal, except for the modified undertaking.
The undertaking you should use
On both the Law Society for England & Wales' website‚ and Land Registry's e-conveyancing website you can find the suggested form of undertaking:
How quickly will you deal with redemptions?
We'll send an ED to Land Registry within five working days of receiving the redemption moneys. All parties are determined to ensure that you don't get the same delays experienced with DS1s and END with ED. We have agreed to adhere to specified time standards for transmitting an ED.
Are there any situations when Land Registry's computer will not cancel the charge entries?
There may be occasions when it would be wrong to cancel the charge entries automatically. For example, there might be an application pending at Land Registry against the title concerned. Before cancelling the charge entry, you would have to complete it first. In this situation, Land Registry will accept the ED. However, they won't cancel the charge entries until the prior application has been completed. We will tell you if this situation occurs.
Will an ED be accepted on all occasions?
There may be a few situations when they may reject an ED. If Land Registry don't accept an ED, they will inform us instantly. Land Registry will then investigate the reason why the ED has been rejected and use an alternative method for discharging the charge. The Mortgage Works will send an END. It is not necessary for you to send us and END form for these charges.
Can other lenders use this system?
Other lenders will be allowed to discharge their charges by EDs. Before they can do so, they will have to go through a process called Data Synchronization. This is to make sure that their charge data matches with the Land Registry's. They'll need to guarantee to deal with redemptions within five working days.
Is the system secure?
All EDs are sent via secure "virtual private networks". There has been a number of security features included to ensure that only authorised lenders can send EDs. We can only discharge our own charges or charges authorised for other lenders.
Need further information
Land Registry has published a Practice Bulletin (No.6 – Electronic Discharges). This is available on their website www.landregistry.gov.uk or from any Land Registry office.
