Acting for the lender and certificates of title Flashcards
What is the lenders interest in a property transaction?
Whether the property has sufficient value an marketability to repay their loan.
Can a solicitor act for a residential buyer and lender? If so, why?
Yes because they have a substantially common interest.
The risk of a conflict arising is low because a high street lender will have standard non-negotiable mortgage terms and conditions.
Additionally, the solicitors discretion in acting for a high street lender is limited by standard instructions (CML Handbook).
Can a solicitor act for a buyer and lender in commercial property transactions?
Most lenders in commercial transactions will instruct their own solicitors, as there is much more potential for conflict.
In commercial transactions what will the lenders solicitor do?
- specify what enquiries and searches are needed
- ask the buyer’s solicitor to send copies of all searches and replies to enquiries
- review them and ask the buyer’s solicitor to make such additional enquiries as the lender’s solicitor requires
- draft the legal charge and other security documents
- either draft the certificate of title or ask the buyer’s solicitor to provide it
What is a mortgage offer?
A formal offer by the lender to lend. It is subject to the lender being satisfied with the transaction and security.
What is a certificate of title?
A document which a solicitor certifies that the title to the property is satisfactory for lending purposes.
What is a facility letter?
Roughly the commercial equivalent of a mortgage offer.
What is a legal charge/mortgage deed?
The deed that creates the security interest and is registered at the Land Registry.
It gives the lender the right to repossess.
What is the CLLS certificate of title?
Similar to the report on title but for commercial property and will follow a prescribed format.
The certificate is a series of statements that would be given if the property title is in perfect order. The solicitor completing the certificate must give a disclosure after a statement if any of these statements are incorrect.
Can a lender sue if there are any material errors are omissions to the CLLS certificate of title?
Yes, they can.
