Independent Legal Advice
29/10/2020
15,272
8 min read
Independent Legal Advice is a mandatory requirement during a transaction where a party is placed at risk but doesn't get a direct benefit from. The advice is provided by a solicitor who is independent to the transaction and the meeting is held face to face; historically in the same room however Skype is a more common practice.
The most common transactions requiring independent advice from a solicitor are:
- Director Mortgage Guarantee
- Joint Mortgage Sole Proprietor
- Transfer of Equity
- Occupier Waiver
- Property Settlement Agreements
- Employment Settlement Agreements
independent legal advice is often obtained toward the end of the transaction (purchase or transfer) with a focus on needing the advice quickly - which we can help with as we provide next day appointments via Skype.
It can often be difficult to find a solicitor who provides the requisite legal advice as many see the work as too high risk, especially following the court case Padden v Bevan Ashford Solicitors where the solicitor was ordered to pay the client £67,000 for not providing adequate legal advice. At SAM Conveyancing we can help with a wide variety of advice service near you or over Skype.
Get a Quote for independent legal advice
Our experienced solicitor can help with face to face or Skype legal advice. We offer ILA for Joint Mortgage Sole Proprietor, Director Guarantee and occupier waiver and are rated Excellent on Trustpilot.
- Fixed Fee - Up to 1 hour of legal advice with a 14 years qualified solicitor
- Skype calls with availability next day
- Flexible meeting times 9am to 7pm
- Need it ASAP? Ask about our same day or up to 10pm service
- We work with all mortgage lenders including Barclays, Natwest, HSBC, Paragon, Precise and Metro Bank
Instant Online Quote | No Obligation | Available today
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What legal advice is given?
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What advice is required?
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Directors Guarantee
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Directors of a company are required to get legal advice when obtaining a mortgage - known as independent legal advice for guarantors. The guarantee makes the director personally liable to pay back the mortgage if the company defaults on the mortgage. You can read more here - Directors guarantee
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Joint Mortgage Sole Proprietor
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For parents helping their children buy a home or even unmarried couples where one party already owns another property so as to avoid second home stamp duty. They are on the mortgage but not the legal title so the lender needs the solicitor to advise of the risk of being liable for the mortgage debt. You can read more here - Joint Mortgage Sole Proprietor Mortgages
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Occupier Waiver Form
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For occupiers over 18 the mortgage lender requires them to sign a waiver to waive any rights to the live in the property if the lender needs to repossess. You can read more here - Occupier Consent Form
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Second Charge
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Where a party is liable for a mortgage/second charge and the money is being used for something hey don't benefit from, the mortgage lender requires them to get legal advice of the risk.
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Deed of Trust
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Where joint owners draft a deed and require a solicitor to provide legal advice to one of the beneficiaries about the terms.
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Employment settlement agreements (Compromise Agreements)
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An employer often contributes pay up to £350 toward a review of a settlement agreement by a solicitor to ensure you fully understand and accept the terms ot the agreement.
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Separation agreements (such as divorce)
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A review of the separation agreement at the end of a break-up.
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Why do you need Independent Legal Advice?
It is important to note that all legal advice should be independent. The reason you need further independent advice is when you are completing a joint transaction where you both want the same transaction to complete, however you have potentially conflicting interests that need further explanation in order to help you fully understand the implications on you individually when the transaction completes.
In conveyancing transaction, once the ILA has been provided, the solicitor issues a Certificate of Independent Legal Advice to the acting solicitor for the transaction or directly to the mortgage lender.
ILA example - Transfer of Equity
John and Mary jointly own a property and they are separating so only John will own the property. Although the transaction to transfer the property from John and Mary to John solely is the end result for both, Mary will be advised to seek separate Legal Advice so that she is has legal advice from a solicitor who is acting solely in Mary's best interests. This advice could include explaining that Mary will no longer be a legal owner of the property, or support in understanding how much Mary is to be paid for her share of the property and whether this equates to her.
ILA example - Joint Mortgage Sole Proprietor ('JMSP') Mortgage Condition
With a JMSP mortgage product up to four people can be on the mortgage deed however the legal owners of the property may comprise only some of those on the mortgage. It is a required legal advice mortgage product often used by parents helping their children buy their first home as the child's salary combined with their parent's salaries makes the mortgage product more affordable.
For this type of mortgage product, the mortgage lender will always require the party/ies who are liable for the mortgage, but who aren't legal owners to seek legal advice.
The instruction from the bank might be similar to this: "The legal adviser must explain the content and effect of the first legal mortgage over the Property to CLIENT NAME and arrange for it to be executed. The legal adviser must also complete the attached standard letter confirming that legal advice has been given. The borrowers must pay any fees relating to this matter."
The legal advisor will then complete a Certificate of Independent Legal Advice which will contain the following: "I confirm that I act for CLIENT NAME. I have explained the nature of the Legal Charge and the consequences of signing the first legal mortgage over the property in conjunction with the proposed mortgage application. CLIENT NAME wishes to proceed with this mortgage. I have explained that you require confirmation that I have given this advice so that CLIENT NAME may not dispute being legally bound by the mortgage and I confirm that I have the authority of CLIENT NAME to give this confirmation".
Frequently Asked Questions
Independent legal advice near me or online?
Independent advice always used to be completed physically face to face in the solicitor's offices because the advisor needs to verify that the person they are providing the advice to is independent and to the appropriate person. With advances in technology, forward thinking legal advisors can now provide legal advice adopting other face to face means, such as Skype or face time*.
Using Skype, the solicitor will identify the client they are giving legal advice to via a visual review of the client's passport or driving licence; a digital copy of this is also stored. The client will also need to be alone in the room at the time of the meeting.
Not all solicitors adopt this type of technology so make sure to check as you may be forced to work with a local solicitor if you can find one who is able to help.
Does the meeting have to be face to face?
Part of the solicitor's job is to check that the party getting the legal advice is doing so without undue influence and they were not misled as to its nature or the implications of signing it (the mortgage deed). In order to do this they must:
- compare the person they are speaking to the photo ID (such as a passport or driving licence)
- ensure the person is on their own and not being influenced
Nowadays a the majority of mortgage lenders allow for a face to face meeting to take place via video conferencing such as Skype or Zoom.
Who can provide Legal Advice?
The requirements vary depending on the ILA, however the solicitor will most commonly be a practising Solicitor, Licensed Conveyancer or a Fellow of the Institute of Legal Executives. They might well be a specialist solicitor.
Cheap independent legal services?
Quotes for £180 INC VAT often only offer a 15 minute meeting and for extra time you are charged more. With this mortgage product you'll need more than 15 minutes to talk to your solicitor to make sure you fully understand the mortgage terms, future risks and what you can do to protect yourself. Read how rushing an ILA meeting caused the client to lose their home - Royal Bank of Scotland PLC v Etridge. This case changed how solicitors provide legal advice and the detailed advice they need to provide.
Our solicitor offers a full 1 hour to answer all your questions and uses her extensive knowledge to explain the small print in the mortgage lender's terms that you may not know and we do this for one fixed price, with a 5 star Excellent rating on Trustpilot. You may find a solicitor to offer cheap legal advice however with the personal risk you are taking on through the transaction it is better to pay a reasonable fee and get a quality service spending the time to answer all of the questions you have.
Free independent legal advice?
Most clients were never told that they needed to get advice and of course would like free advice. For some they may even feel the process to be a 'form filling exercise'. For the solicitor providing the legal advice, the risk is too great to offer free legal services and they are also duty bound to charge a fee for the legal advice they provide.
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