Acting for Lender

Question 1

What is the lender’s interest?

Answer 1

Whether the property has sufficient value and marketability to repay their loan

Question 2

Conduct issues acting for a lender (residential)

Answer 2

• Residential transactions - same solicitor usually acts for both buyer and lender
• This is under the substantially common interest exception - where there is a clear and common purpose and a strong consensus on how it is to be achieved
• risk of conflict is low as a high street lender will have standard non-negotiable mortgage terms and conditions

Question 3

Conduct issues acting for a lender (commercial)

Answer 3

Most lenders in commercial transactions will instruct their own solicitors as there is greater potential for conflict

Question 4

What does the lender’s solicitor in commercial transaction do?

Answer 4

• specify what enquiries and searches are needed
• ask buyer solicitor to send copies of searches and replies to enquiries
• review them
• draft the legal charge and other security documents
• either draft the certificate of title or ask buyer’s solicitor to provide it

Question 5

What are lending documents?

Answer 5

• Mortgage offer: formal offer by lender to lend. Sets out terms and conditions of the loan
• Facility letter: commercial equivalent of a mortgage offer

Question 6

What is the certificate of title

Answer 6

Confirms to the recipient matters relating to the property through series of statements of facts and disclosures

• solicitor certifies that the title to the property is satisfactory for lending purposes

Question 7

Legal charge

Answer 7

The deed that creates the security interest and is registered at the Land Registry

• security is a charge by way of legal mortgage

Question 8

CCLS Certificate of Title

Answer 8

Certificate of title for commercial property which has prescribed form - City of London Law Society