Nationwide uses the Electronic Discharge or ED process to redeem our residential registered charges in England and Wales. Here is how the EDs system works and how it might affect you.
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What is an ED?
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 and if everything is in order, it cancels the charge entries.
In most cases, the charge entries will be cancelled immediately and automatically on receipt of the discharge.
How does an ED differ from an electronic notification of discharge ("END")?
An END is an electronic message to Land Registry authorising the cancellation of the charge entries.
It does not, of itself, cause the charge to be cancelled. It must be combined with a formal application to Land Registry to discharge the charge.
When that application is received, Land Registry's staff cancel the entries relating to the charge being discharged.
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 also does not require manual intervention – it is a computer to computer, system driven process.
Why has the Land Registry introduced EDs?
A system for discharging registered charges automatically is required for e-conveyancing.
Although EDs can operate effectively solely for discharges, it will also form part of an integrated e-conveyancing system.
EDs will also overcome some of the problems associated 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 you should 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 are being redeemed and pay off the charge in the normal way.
Provided the correct payment is received, and it is a case to be discharged by an ED, we will send an ED to the Registry.
If accepted, the charge entries will be cancelled 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 to allow for the electronic discharge.
What you should do if you act for a buyer?
You should proceed with the transaction in the same way as you would with any other except that you will need to allow for the different method of discharge by agreeing on a revised form of undertaking.
For example, that 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.
What sort of undertaking should I use?
A suggested form of undertaking can be found on both the Law Society for England & Wales' website‚ and Land Registry's e-conveyancing website:
How quickly will you deal with redemptions?
We will send an ED to Land Registry within five working days of receiving the redemption moneys.
All parties are determined to ensure that delays experienced with DS1s and END are not repeated with EDs and 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.
This would have to be completed first before the charge entries could be cancelled.
In this situation, Land Registry will accept the ED but the charge entries will not be cancelled 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 small number of situations when an ED is rejected. If Land Registry cannot accept an ED, they will inform us immediately.
Land Registry will then investigate the reason why the ED has been rejected and use an alternative method for discharging the charge.
Nationwide will send an END. It is not necessary for you to send us and END form for these charges.
Will other lenders be allowed to 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 to make sure that their charge data matches with the Land Registry's; and they will have to guarantee that they will deal with redemptions within five working days.
How secure is the system?
All EDs are sent via secure "virtual private networks". A number of security features have been incorporated to ensure that an ED can only be sent by an authorised lender.
Furthermore, we can only discharge our own charges or charges for other lenders if they have been authorised to do so.
How do I get more information about EDs?
Land Registry has published a Practice Bulletin (No.6 – Electronic Discharges) which is available on their website https://www.gov.uk/government/organisations/land-registry (opens in a new window) or from any Land Registry office.