Property - quick fire cards

Question 1

What is the Law Society Conveyancing Protocol?

Answer 1

• (residential only!!!)Standardises the residential conveyancing procedure for those firms that adopt it
  • Set of instructions to conveyances as to the procedure of sale
  • Instructions are accompanied by a series of standard documents under the ‘TransAction’ brand

Question 2

Can a solicitor act for joint buyers?

Answer 2

• Usually okay!
• Must still comply with para 6.2 conflicts
• May be necessary to advise residential buyers separately about how they wish to hold equitable interests in the property, particularly if they are not married or in a civil partnership

Question 3

Can a solicitor act for a borrower and lender?

Answer 3

• Possible unless there is a significant risk of conflict
• RISK IS HIGH IF:
  
  • mortgage is not on standard terms
  • mortgage is on standard terms, but you do not use the approved certificate of title
  • LARGE COMMERCIAL → likely to be more negotiation so HIGH RISK of conflict
• Duty of confidentiality to one client might conflict with duty of disclosure to the other

Question 4

Can a solicitor act for joint borrowers?

Answer 4

• Usually okay! provided no conflict of interests exists or is likely to arise
• EG husband and wife mortgaging the home
  
  • ISSUE OF UNDUE INFLUENCE
    
    • Etridge guidelines:
      
      • Lender should provide the solicitor with the following information:
        
        1. the purpose for which the loan is being made available;
        2. the current amount of the husband’s indebtedness;
        3. the amount of the current overdraft facility;
        4. the amount and terms of the new loan; and
        5. a copy of any written application made by the husband for the loan
      • Solicitor should:
        
        1. explain to the wife the purpose for which the solicitor has become involved;
        2. explain that the lender will rely on the solicitor’s involvement to counter any suggestion that the wife has been unduly influenced or has not fully understood the nature of the transaction; and
        3. obtain confirmation from the wife that she wishes the solicitor to act for her in the transaction, and to advise her on the legal and practical implications of the transaction.
  • BEST PRACTICE:
    
    • face-to-face meeting with the wife in absence of husband
    • explain everything in non-technical language
    • check the wife wishes to proceed
    • If the solicitor thinks that the transaction is not in the wife’s best interests, they should give reasoned advice to that effect.
    • If it is ‘glaringly obvious’ that the wife is being ‘grievously wronged’, the solicitor should decline to act

Question 5

Can a solicitor give advice on financing?

Answer 5

1. Rule: if solicitor is carrying out a regulated activity in relation to a regulated mortgage contract, then they must be authorised
   
   • regulated activity = arrange or advising, or arranging the execution of a mortgage
     
     • NOT generic advice eg differences between types of mortgages
   • regulated mortgage contract = borrowed is an individual + lender takes a first legal charge over the property in the UK + at least 40% of the property is intended for occupation by the borrower or their immediate family
2. EXCEPTION: If the firm is not authorised, solicitor can arrange or advise relying on s327 exemption for professional firms:
   
   • Requirement: the regulated activity is INCIDENTAL to the provision of legal services
3. CANNOT - give recommendations
4. CAN - give generic advice re. different types of mortgages