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Showing posts from September, 2014

A Solicitor’s Dual Duty

When instructed in a purchase transaction in which a client is seeking to rely on the aid of a mortgage, it is important to note that a Solicitor owes a duty not only to their client, but also to the client’s lender. Does a Solicitor, however, owe a general duty to report any information which may materially affect the valuation of the proposed security for the Lender? 
The answer to this question is evident in the recent High Court judgement of E.Surv Ltd v Goldsmith Williams Solicitors, published on April 10th 2014, which saw a conveyancing firm ordered to pay costs of £100,000.00 for failing to disclose information on the value of a property to their client’s lender. This article examines the decision of E. Surv Ltd v Goldsmith Williams Solicitors, which is likely to be of particular interest to lenders.
The case centres on Mr Gayler – the client – who bought a property in September 2005 at a cost of £390,000.00. The client sought to remortgage the property and consequently instructe…

Mortgage Valuation Report

Your solicitor may ask to have sight of the valuation report used by your lender to assess your eligibility for a mortgage. In this article I look to explain why your solicitor needs to see a copy of the valuation. 
The CML handbook ( which governs your solicitors relationship with your lender )  requires  your solicitor to check the property valuation report. 
Your lender may not have  provided your solicitor with a copy of this document and because of this your solicitor will seek from you a copy of the valuation report which should have been sent to you direct.
Why does  your solicitor need to see this particular document?
Your solicitor must check that the correct property has been valued (by checking the address on the valuation against that on the contract or title) and that any assumptions made by the valuer, such as tenure, restrictions on use, availability of parking etc are correct.
Your solicitor must report any errors or omissions to the lender so that they can ask the valuer w…

Gifts and buying a home

More and more property transactions are being funded in part by gifts from parents and other members of the family.The involvement of a gift has implications which your solicitor is obliged to address and which will normally involve additional work.
In this article I examine the obligations on your solicitor when you are purchasing a property with a mortgage and where you are receiving a gift to assist in the purchase of your home. 
The CML handbook ( which governs your solicitors relationship with your lender )  requires your solicitor to enquire of you as to how you intend to fund the balance monies - that is to say the difference between the purchase price and the amount borrowed under the mortgage. If your solicitor becomes aware that the balance is coming from somewhere other than your own savings or the sale of an asset (such as another property), for example a loan, or gift or second charge, then this must be reported to your lender.  
Your solicitor  will require your consent to…