Solicitors' Guide Welcome to the Gatehouse Bank Solicitors' Guide. This resource has been prepared for the use of conveyancers engaged to act for Gatehouse Bank's customers in relation to Home and Buy-to-Let Purchase and Refinance Plans. Handbook Document Downloads

15. SEARCHES 15.1 Does the Bank accept search insurance and, if yes, what are the Bank's specific requirements? Purchases You must commission full searches including local search, LLC1, environmental, drainage and water, highways, flood, chancel and any others flagged by the search provider due to the location of the property (e.g., Crossrail, HS2, Mining, etc.). These searches should be no more than 6 months old on completion other than the local search and LLC1 which should be no more than 3 months old on completion. Search validation insurance will be accepted, if the previous searches were satisfactory and are not more than 3 months beyond the dates specified above for purchases. The indemnity insurance will need to be sent to the Bank's solicitors for approval. Please note the insurance conditions contained below, under the heading Search Insurance Criteria. No search insurance is NOT acceptable for purchases. Refinance/Release of Equity Search validation insurance is acceptable, if the previous searches were satisfactory and they are no more than 12 months old or, in the case of the local land charges search 9 months old, on completion, subject to the policy meeting the insurance conditions contained below, under the heading Search Insurance Criteria. No search insurance is acceptable subject to the policy meeting the insurance conditions contained below, under the heading Search Insurance Criteria. Search Insurance Criteria Where search insurance is acceptable to the Bank as per above, the following conditions must be met: i. the Bank's contribution is less than £1 million for refinances. ii. the Property value is less than £500k for purchases. iii. the Bank is a beneficiary of this indemnity insurance until the bank’s charge is settled; iv. the Client's Solicitor and the Bank’s Solicitor are satisfied that the Bank's interests are adequately safeguarded (at Client's risk); v. the insurance covers all usual searches that would be undertaken (local, land charges, drainage, chancel, environmental, highways, etc.); vi. the insurance provider is authorised by the PRA/FCA to provide such insurance; vii. the sum insured under the policy is an amount that is at least equal to the open market value of the property; viii. the Client’s Solicitor certifies that the title is good and marketable and provides a clear and unqualified Certificate of Title without any disclosures (save with respect to the searches covered by the policy); and ix. all indemnity insurance will need to be sent to the Bank's solicitors for approval. 15.2 Does the Bank accept personal searches? Yes, the Bank will accept personal searches. The search provider must have appropriate professional indemnity insurance in place to cover the value of the property. Back to Contents

4. LEASEHOLD QUERIES 4.1 Notices to Landlord/Management Company Where required, any notice of transfer, sublease and charge are to be served pursuant to the Superior Lease (meaning the lease (if any) by which the Property is vested in the Bank) by the Client's Solicitor once completion has taken place. You must provide copies of the receipted notices to the Bank's solicitors. The Bank's solicitors will provide you with template notices during the transaction for you to complete and submit along with the required fee. 4.2 Shares in the Freehold/Management Company The Client's Solicitor is required to confirm if there is a management company and whether a 'purchaser' (i.e., the Bank) is required to become a member or shareholder of the management company. The Bank would prefer your Client to become a member or shareholder of the Management Company but acknowledges that this may not always be possible. If your Client becomes a member or shareholder, the Bank will require a signed, but undated, stock transfer form to allow transfer of the management share(s) to the Bank if required. Please liaise with the management company and/or freeholder to confirm whether your Client can become the member of the management company. If that is not possible, please confirm whether the Bank must become a member and what is required for the Bank to become a member and provide the forms for completion. If the Bank is required to become a member or shareholder, please confirm with the Management Company and/or freeholder if your Client can be appointed as the Bank’s Proxy, as that would be the Bank’s preference. 4.3 Energy Service Agreements Where the lease requires the leaseholder to enter into an energy service agreement, you should ensure that the Client can enter into this instead as the underlesee. 4.4 Alienation Restrictions in the Superior Lease Please ensure you review the alienation provisions and restrictions in the Superior Lease as soon as possible and liaise with the relevant third parties urgently to obtain any consents and/or licences and/or deeds of covenant required for the transaction. Please note that where any licences, deeds of covenants or Leases need to be executed by the Bank, we expect these documents to be fully vetted by your firm as the certifying solicitor. Any unusual terms must be reported to us in an addendum to the Certificate of Title for consideration. All costs associated with any such documents and notices must be borne by the Client. For ease, please note that there are multiple stages to this facility including: a) the transfer of the property to the Bank from either the seller or Client; b) the Lease from the Bank to Client; and c) the charge granted from the Client to the Bank. Please note, the Lease (between the Bank and the Client) is drafted so that it terminates on the Final Completion Date (as defined in the Diminishing Musharakah Agreement) at which stage the Bank has promised to sell the property to the Client and the Client has promised to buy the property from the Bank. Therefore, the Lease does not provide security of tenure which may assist in analysing whether consent is required under the Superior Lease. Please also note that the Lease requests the Client to give the following covenant in the Schedule, paragraph 6: "To observe and perform and comply with the lessee's covenants in any Superior Lease (if any) to the extent that those covenants are not already required to be complied with under the provisions of the Lease". If the landlord and/or management company have confirmed that a requirement in the Superior Lease is waived in light of the financing structure, you must provide the Bank's solicitors with written evidence to be relied upon. 4.5 Ground Rent limits You must flag to the Bank's solicitors whether the current or future ground rent will exceed 0.2% of the value of the property. The Bank's solicitors will report this to the Bank and valuer for consideration. The Bank will not accept ground rent reviews that are reviewed more frequently than every 5 years against RPI or equivalent index. 4.6 Seller/Developer unwilling to transfer to Bank If the developer and/or seller does not agree to directly grant the lease of/sell the property to the Bank, the structure will be as follows: a) the lease/sale from the developer/seller to the Client; b) the transfer of the property from the Client to the Bank; c) the Lease from the Bank to the Client; and d) the charge granted from the Client to the Bank. All four stages (a) to (d) above will take place simultaneously. The Bank will not take an assignment of the contract. The contract must have been entered into only by the Client. 4.7 Lease Term The minimum unexpired lease term for any leasehold property must be 70 years from the date of completion, subject to 40 years remaining at the end of the finance term. The Superior Lease must not contain any onerous or unusual covenants or restrictions. There must be no outstanding disputes in relation to any breach of provision and all sums due under the Superior Lease must be paid up to the date of completion. Where the Superior Lease term is shorter than the valuer has indicated in their valuation, this should be flagged to the Bank's solicitors to refer back to the valuer for consideration. 4.8 Leasehold Interest with Freehold Charge Where the client holds/is purchasing the leasehold and the Client also owns/will own the freehold interest in the property, the Bank will require (in addition to holding registered leasehold title as per the diminishing Musharakah structure) a charge over the freehold interest as well. Where a leasehold is being financed and your Client or the ultimate beneficial owner of your Client owns or controls (whether through shareholding, directorship or otherwise) the freehold, the Bank will require a charge over both the leasehold and freehold. 4.9 Enfranchisement Following completion, the Bank will become the registered proprietor of the title to the Property and this could affect your Client’s ability to make an application to extend the lease or acquire an interest in the freehold/superior title. The Bank would prefer not to be involved with any such application and so your Client should arrange for any such transaction to take place before completion. 4.10 Building Safety Act 2022 If the Property is leasehold, you must determine whether the property is located in a ‘relevant building’ as defined in the Building Safety Act 2022. If the Property is impacted by the Act, you must procure and confirm: a) Confirmation as to whether the building has been or will be remediated under the Building Safety Act 2022. b) Copies of any Landlord’s Certificates, signed by the Landlord in the form set out in the Building Safety (Leaseholder Protections) (England) Regulations 2022. c) Copies of any executed Leaseholder Deed of Certificate (in the form set out in the Building Safety (Leaseholder Protections) (England) Regulations 2022) and confirmation that they have been submitted by the relevant leaseholder to the landlord. d) The developer has signed a Developer's Remediation Contract with the Government. If any of the above cannot be confirmed, please refer to the Bank for further instructions and comments from the valuer. In all cases, you must advise your client of the consequences, including any unavailability of a cap on a financial contribution to remediation costs through the service charge levied by the freeholder and your client’s liability to the Bank for those costs under the Purchase Plan terms and conditions. Back to Contents

1. INTRODUCTION AND PURPOSE 2. DEFINED TERMS AND INTERPRETATIONS (a) Definitions (b) Interpretations 3. DIMINISHING MUSHARAKAH STRUCTURE AND ADVICE 3.1 How will the Bank's financing operate? 3.2 Acquisition Payment Profile 3.3 Ability to Advise the Client on the Finance Documents 3.4 Legal Advice to the Client 3.5 Legal Advice to Interested Parties (Guarantor, Donor or other) 3.6 Independent Legal Advice Letter for Guarantors, etc. 3.7 Subordination of Shareholder/Director Loans 3.8 Joint Applicants 4. LEASEHOLD QUERIES 4.1 Notices to Landlord/Management Company 4.2 Shares in the Freehold/Management Company 4.3 Energy Service Agreements 4.4 Alienation Restrictions in the Superior Lease 4.5 Ground Rent limits 4.6 Seller/Developer Unwilling to Transfer to Bank 4.7 Lease Term 4.8 Leasehold Interest with Freehold Charge 4.9 Enfranchisement 4.10 Building Safety Act 2022 5. THE DOCUMENTS 5.1 Original Documents 5.2 Additional Documents 5.3 Amendments to Agreements 5.4 Witnessing Documents 5.5 Offer Letter 6. FUNDS FLOW 6.1 Finance of Deposit/Balance – Gift/Second Mortgagee 6.2 Funds Held in Joint Account 7. STAMP DUTY LAND TAX (SDLT) AND CAPITAL GAINS TAX (CGT) 7.1 Submitting Returns and Paying SDLT 7.2 SDLT Additional Relief 7.3 SDLT Rebates 7.4 Capital Gains Tax (CGT) 7.5 Tax Planning 8. INSURANCE 8.1 New Home Warranty Schemes 8.2 Indemnity Insurance 8.3 Absent or Insolvent Landlords 8.4 Buildings Insurance 9. CERTIFICATE OF TITLE (COT) 9.1 Why do you need to provide a COT? 9.2 Who is required to sign the COT? 10. DISCLOSURES 10.1 Disclosures to the COT 10.2 Disclosure of Incentives 10.3 Environmental Reporting 10.4 EPC Ratings 10.5 Licences 10.6 HMO Licenses – Refinance 10.7 Title Guarantee 10.8 Unencumbered Title 10.9 Flying Freehold Conditions 10.10 Crisscross Leases (Sometimes known as “Tyneside Leases”) 11. COMPLETION 11.1 Offshore Seller 11.2 Notice of Completion to the Bank 11.3 Funds Remittance – when will they be available? 12. POST COMPLETION 12.1 Registration 12.2 Removal of Security 12.3 Legal Representation on Redemption 13. PROCESS AGENT 13.1 Process Agent 14. CORPORATE FAQs 14.1 Board Minutes and Director's Certificate 14.2 Copies of the Corporate Authorisations 15. SEARCHES 15.1 Does the Bank accept search insurance and, if yes, what are the Bank's specific requirements? 15.2 Does the Bank accept personal searches? 16. POLICY EXCEPTIONS

9. CERTIFICATE OF TITLE (COT) 9.1 Why do you need to provide a COT? One of the Bank's conditions precedents (CPs) for completion is for the Client's Solicitor to provide a signed COT in the form that has been sent to you by the Bank's solicitors. As you are aware, in a conventional setting, you would have the same firm representing client and bank. In the usual way, you would submit a COT to the conventional bank to request drawdown of funds. In Home Purchase Plans and Buy-To-Let Purchase Plans structures, due to the involvement of a lease and the landlord and tenant relationship between the Bank and the Client, each party must be separately represented to avoid any conflicts of interest. Essentially, this is a form of hybrid representation whereby the Bank’s solicitor's involvement is required to ensure compliance with the SRA Code of Conduct as well as monitor satisfaction of the finance CPs in favour of the Bank. The COT will be reviewed by the Bank's solicitors who will prepare an overview report on the security to the Bank including reference to the other documents requested from you. The Bank's solicitors do not undertake any property due diligence nor are they instructed to do so and therefore they cannot and will not provide the COT. 9.2 Who is required to sign the COT? The COT must be signed by a solicitor or Licenced Conveyancer (being a partner employed in your practice) who will be deemed authorised to sign it. Back to Contents

13. PROCESS AGENT 13.1 Process Agent If the Client or any Guarantor is based overseas, the Bank will require the Client/Guarantor to appoint a process agent to receive service of process in respect of any proceedings commenced by any party in the courts of in England and Wales arising out of or in connection with each Agreement to which the Client/Guarantor is a party. The form of process agent letter will be provided by the Bank's solicitors during the transaction. The process agent can be a corporate entity or an individual. The only requirement is that they must have a registered or have a residential address in England and Wales and the address and an email address will need to be noted on the letter. The Client/process agent must advise the Bank immediately if there are plans to change the process agent. In case of joint applicants, the first applicant cannot act as a process agent for the second applicant or vice versa. Back to Contents

2 DEFINED TERMS AND INTERPRETATIONS (a) Definitions i. "Bank" means Gatehouse Bank PLC of The Helicon, 1 South Place, London, EC2M 2RB; ii. "Client" means the corporate entity or individual(s) to whom the Offer Letter is addressed; iii. "Client Solicitor" or "You" mean the solicitors or licensed conveyancers appointed to act for the Client; and iv. "Diminishing Musharakah Agreement" means the diminishing musharakah agreement to be entered into between the Client and the Bank as provided to you. (b) Interpretations i. Unless otherwise defined in this deed, a term defined in the Diminishing Musharakah Agreement has the same meaning when used in this document. ii. The guidance contained in this information sheet is intended to assist you in satisfying all conditions with the Bank and the Bank's solicitors and does in not in any way limit or reduce your responsibilities either to the Bank or the Bank's solicitors. iii. You must be regulated by the Solicitors Regulation Authority or the Council for Licensed Conveyancers and have professional indemnity insurance. If your professional indemnity insurance is less than the Bank's Contribution, please advise the Bank's solicitors immediately. iv. You must advise the Bank's solicitors immediately upon any matter arising which may adversely affect the good and marketable title to the Property and in your professional opinion will be considered to affect the Bank's interest in the Property. v. In any case where you are unable to continue to act for the Client, you must advise the Bank's solicitors immediately and return all documents held by you. Back to Contents

New Build Conditions If required, please use the certificate of compliance template below. Download

16. POLICY EXCEPTIONS Any exceptions to this policy must be approved by MCIC. Exception requests should comprise a clear rationale and support from the Banks solicitors. Additionally, these requests should be vetted by Risk and Legal Counsel, before being considered for MCIC submission. Back to Contents

14. CORPORATE FAQs 14.1 Board Minutes and Director's Certificate The Bank's solicitors will provide you with template Board Minutes and Director's Certificate for your review. You must review your client’s articles of association (and memorandum) and amend the templates accordingly. In particular you must amend the provisions relating to any conflicts of interest. 14.2 Copies of the Corporate Authorisations You must provide the Bank's solicitors with a certified copy of the Board Minutes (dated and signed) and the original Director's Certificate. The latter will be dated on completion. Back to Contents

10. DISCLOSURES 10.1 Disclosures to the COT If the Client's Solicitor wishes to disclose any issues, then the Client's Solicitor should set out such issues in a disclosure letter appended to the COT. The Bank's solicitor will then refer these matters to the valuer for confirmation that the valuation remains unaffected considering the disclosures. 10.2 Disclosure of Incentives Please ensure you report on all incentives and provide a disclosure form substantially similar to the UK Finance Disclosure Form to be referred to the valuer. 10.3 Environmental Reporting If the contents of the environmental report or contamination report you have commissioned is likely to affect the Bank's security, the Bank's solicitors will require a copy to be provided to them as a disclosure to the COT. 10.4 EPC Ratings All the security properties must meet minimum EPC rating threshold of ‘E’. 10.5 Licences a) Buy-to-Let Purchase Your Client is responsible for ensuring any mandatory, additional/discretionary, selective or other licence required to let the Property is in place before the Property is occupied by tenants. b) Buy-to-Let Refinance You must satisfy yourself that either: i) Any licence required to let the Property is in place on completion, or ii) Where a licence other than an HMO licence is required but is not currently in place, you are satisfied an appropriate application for the required licence has been made by your Client before completion. 10.6 HMO Licenses – Refinance Bank solicitors will require a confirmation that the property has a valid HMO license before completion. 10.7 Title Guarantee The Property must be transferred to the Bank with full title guarantee. Limited title guarantee is acceptable in some instances whereby the seller cannot provide full title guarantee (e.g., where probate sale or the seller lacks capacity or is a mortgagee in possession), provided an indemnity policy in place protecting the Bank's interest. 10.8 Unencumbered Title On completion, the Bank must obtain unencumbered title to the property and to any other Bank's interest forming part of the Bank’s security under the Transaction. Accordingly, any existing charge affecting the property (including under a debenture, or a fixed or floating charge) must be released on or before completion. Mere confirmation of non-crystallisation of an existing charge and/or an arrangement for the Bank to jointly hold the title or interest (even if in priority to a third party), is not acceptable. 10.9 Flying Freehold Conditions If the Property is a flying freehold, please advise the Bank's solicitors immediately. The Bank will require the following conditions to be met: a) the Client's solicitor or the valuer should confirm what percentage of the floor area will be affected by the flying freehold – this will determine whether the Bank can agree to lend or not; b) assuming the Property is not yet split, the transfer of the freehold property must have all necessary rights of support, protection, and entry for repair. The Client's solicitor must also provide confirmation of how the Property is accessed, i.e. does it have a separate access way, etc.; c) the Property must have enforceable restrictive and positive covenants that are also such that subsequent buyers are required to enter into covenants in identical form (since positive covenants do not run with the land). This will include ensuring that there is an adequate restriction placed on both freehold titles for Deeds of Covenant to be entered into by successors in title; d) the Client's solicitor should provide flying freehold indemnity insurance to the Bank's solicitors for approval; and e) the Client's solicitor will need to certify that the Property has good and marketable title. 10.10 Crisscross Leases (Sometimes known as “Tyneside Leases”) In circumstances where the Bank is financing one of two leasehold flats in a building where the Client holds the leasehold to one flat and the freehold reversion of the second flat and the other leaseholder owns the leasehold to the other flat and the freehold reversion in the Client’s flat, we require both the leasehold and freehold titles held by the client to be transferred to the Bank. Back to Contents

SDLT Please download, completed and return the SDLT Declaration signed by your client(s). SDLT Declaration (non-corporate clients only) SDLT Declaration (corporate clients only) Download Download