Independent Legal Advice (ILA)

Independent legal advice is a common requirement in the conveyancing process. It is impartial advice on property law given to you before signing up to something and/or signing something away. It is given to you by a different solicitor’s firm to those representing the other parties involved in the transaction and common examples include a company director personally guaranteeing company borrowings or a spouse transferring their interest in a jointly-held property to their spouse’s sole name. Independent legal advice avoids a conflict of interest, meaning the solicitor must advise on your best interests and how the transaction affects you personally.

The purpose of independent legal advice is to make sure you fully understand any legal document before you sign it and that you sign it of your own free will without ‘undue influence’ from anybody else. That means there are no other involved parties present when you receive advice and no one is pressuring you into signing. It’s your solicitor’s job to ensure you understand your legal obligations before signing and the consequences if things go wrong. Advice must be given face-to-face and communicated clearly without technical jargon. The meeting with the solicitor usually takes quite a long time because they must go through everything in detail with you. It is a common myth that it is a quick formality. It is not.

Sometimes banks protect themselves from financial risk by requiring people to seek independent legal advice. Anyone who has received such advice before entering into an agreement will find it difficult to avoid negative consequences later by claiming they were pressured into signing by another person.

When to Seek Independent Legal Advice

You might seek independent legal advice if you are:

  • Involved in a Joint Borrower, Sole Proprietor mortgage application. That’s when a buyer cannot afford a mortgage to buy a property, so they do so with the help of a joint applicant who won’t be a registered legal owner of the property.
  • Transferring property equity between family members. You might wish to transfer equity into joint names or change to sole ownership. 
  • Transferring equity from a property in order to raise funds to purchase a buy-to-let. If the property is jointly owned this ensures you both understand the risks.
  • Required to sign an Occupiers Waiver form. If someone has purchased a property but you live in it instead of them, the mortgage company will ask you to sign this form so you can’t prevent a repossession.
  • Requiring a directors’ personal guarantee. If you purchase a buy-to-let property through a limited company, your mortgage company will require each director to sign a personal financial guarantee against the loan.
  • Securing your property against a corporate loan. You and co-owners of your property will be required to seek independent legal advice by your bank. 
  • A personal guarantor. If you guarantee someone else’s mortgage, the mortgage company will require that you seek independent legal advice first.

 

Independent Legal Advice Certificate

An Independent Legal Advice Certificate proves you have received independent legal advice with respect to an arrangement before you enter into that arrangement. 

Your solicitor can only sign the certificate if their advice has been given in accordance with strict set guidelines. In order for the advice to be regarded as independent, It must be given face-to-face with no other parties involved in the arrangement or transaction present. As well as looking at your individual situation, your solicitor will also take into account the personal and financial circumstances of all parties involved and the details of any mortgage or loan.

What to Bring to your Appointment with your Solicitor

We will always require photo evidence of your identity (a driving licence or passport) and two documents proving your address (such as your driving licence (this cannot be used to prove both your ID and address), utility bills from the last 3 months, a bank statement or an HMRC letter).

When you book an appointment, your solicitor will specify if there are additional documents you need as this varies between transactions, for example, you may need to bring personal financial information with supporting documents, such as mortgage offer or loan agreement.

Do you Need Independent Legal Advice?

At Lockings Solicitors we appreciate that it’s critical you understand all implications before signing documents. Without taking independent legal advice, you could be waiving important rights and/or agreeing to personal liability without understanding the risks.

We know that obtaining independent legal advice is usually time-sensitive, which is why we work quickly and efficiently. We always confirm our advice in writing after your appointment.

For a Free Initial Chat call 01482 977 925.

 

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