Independent Solicitor's Certificate

[Puppeteer]

I'm buying a house through a trust and the bank is insisting on an independent solicitor's certificate.

I don't have a problem with this, or with paying a solicitor for it, but upon talking to a solicitor's firm it's become apparent that solicitor's are very reluctant to sign these because of professional indemnity issues.

In fact many firms have a policy, not to do these at all.

I've solved my immediate problem, but am interested in other people's experience here.

What happens when banks insist on filling them in, and solicitors insist on not signing them?

 

[duncan_m]

What happens when banks insist on filling them in, and solicitors insist on not signing them?

I haven't that happen for over 5 yrs now.. but one solicitor I rang told me to call the bank back and tell them "I've tried very hard to get this done, but I cant find a solicitor willing to help me.. Do we really need this certificate? I've rung a couple of other banks and they are happy to do the loan without it..".. the bank I was dealing with at the time dropped the requirement on the spot.. so perhaps just call their bluff (if it is that).

 

[Puppeteer]

Thanks Duncan,

It begs the question then, what benefit to the banks get in having these things filled out? I guess you can't use the excuse that "I didn't know what I was getting into, signing the document", but I can't imagine that would be much of a legal defence, in any case.

It's basically a document that says "I have read and understood the 2 inches of documents that you have just given me"

 

[duncan_m]

Thanks Duncan,

It begs the question then, what benefit to the banks get in having these things filled out? I guess you can't use the excuse that "I didn't know what I was getting into, signing the document", but I can't imagine that would be much of a legal defence, in any case.

It's basically a document that says "I have read and understood the 2 inches of documents that you have just given me"

I suspect you've signed a Guarantee personally against the loan to the Trust? there was all sorts of trouble a few years ago with Guarantors crying foul when they were called on to repay a delinquent debt.. you've just been caught up in the fallout from that..

It wasn't really aimed at investors who used trusts.. more at Mums (especially frail ones) guaranteeing loans for their children.

 

[Puppeteer]

Spot on. Guarantee to the trust.

I guess I can understand the logic behind that. I'd be pretty damn reluctant going guarantor for anything I didn't have complete control of. Even with family, I'd like to have some modicum of control and some contingencies in place.

Thanks again for the insight Duncan

 

[Chev]

Some solicitors are reluctant to sign those documents especially as they confir legal liability on the solicitors themselves directly. However some lawyers are prepared to sign those for a fee. You just need to shop around more.

Having said all that, in my experience all major financial institutions are able to waive the requirement for an independant solicitor's certificate or to reduce the requirement down to an abridged and reduced/minimal liability certificate for solicitors to sign. There is also a form that states that you are given an opportunity to have a solicitor review the documents but voluntarily chose not to engage a solicitor.

You should simply put your foot down and tell the person responsible for your file matter that they either relax that requirement or you're getting the loan from another institution.