Mortgages: Undue Influence Flashcards
To ensure that the bank ranks in priority to freehold ownership, what must the bank do?
The lender must write to the party who is granting the mortgage not for their benefit explaining that the bank needs confirmation from an independent solicitor that he/she has explained the transaction to him/her.
*The bank will ask that party to nominate an independent solicitor
*Provide all the information to that independent solicitor
*And the bank must not proceed to lend until confirmation received from the independent solicitor that the transaction has been fully explained.
What must the independent solicitor do?
*Meet the party who is entering into the mortgage not for their own benefit face to face, on their own.
*Explain why they have arranged the meeting i.e. to stop them from being able to claim UI later.
*Explain the documents and transaction using non-technical language
*Point out the risks
*Emphasise they have a choice
*Keep a detailed attendance note and confirm everything in writing
*Send the certificate to the bank
When should these steps be taken?
These steps should be taken in EVERY NON -COMMERCIAL CASE where A PRIVATE INDIVIDUAL OFFERS HIS PROPERTY AS SECURITY FOR ANOTHER PERSON’S DEBTS.
State the relationships where there is an irrebuttable presumption that one party has influenced the other
- Solicitor and client
- Trustee and Beneficiary
- Parent and Child
- Doctor and Patient
