Independent Legal Advice
- If you're involved in a transaction where you are put at risk, without getting any benefit from it, you must get an independent legal advice certificate from a solicitor, attesting that you fully understand the risks.
- The legal advice must be given by an independent solicitor, in order to avoid conflicts of interest.
- In the past, legal advice used to be given in person, during a face-to-face meeting. However, you can now get independent legal advice online, via video conference. This is a service we can help with.
- Skip to our Frequently Asked Questions for other details or a breakdown of costs.
What is independent legal advice?
Impartial advice provided by a solicitor who is independent of you (the client) and any other interested parties. They must have no conflict of interest and act solely in your best interest.
Why do I need Independent Legal Advice (ILA)?
ILA is a mandatory requirement in a transaction where a party (that's you) is placed at risk by the transaction but doesn't get a direct benefit from it.
It is required to make sure that you understand the agreement you are making and its risks and responsibilities.
Lenders require a certificate of independent legal advice from the solicitor to confirm that they have explained the details, they're satisfied that you understand the terms, and are not being pressured or coerced to agree to them by anyone else.
Personal guarantees
If you're personally guaranteeing a debt for another person or a mortgage for a shareholder or company mortgage, you need to understand the risk you're taking on.
Family law
You may need independent legal advice on financial statements, settlements or child custody agreements, usually during a divorce or dissolution.
Property transactions
You will need professional legal advice on certain property transactions and mortgage products, as we explain further below.
Wills and estate
Legal advice may be required when creating or modifying a will or trust, and in general estate planning, particularly where an individual is being assisted in their estate planning by a relative or connected party.
Employment agreements
When negotiating employment contracts, severance agreements, and settlement agreements, legal advice may be required to protect the rights and interests of the employee to ensure they understand the terms in order to agree they are fair. The employer may have to pay for the employee's advice, but the employee can choose their own solicitor.
How does our Independent Legal Advice work?
During a meeting with your independent legal advice solicitor, the risks and terms of your transaction will be explained to you. The process is as follows:
Book a meeting with a solicitor and send your documents for review.
During the meeting, the solicitor will verify your identity and explain the risks to you.
An independent legal advice certificate is provided as proof.
At the solicitor's discretion, the certificate can be sent directly to your acting conveyancer/solicitor.
- Arrange a free call today with a member of our ILA team to discuss your needs
- Advice appointments available from 22/11/2024*
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What advice is covered in the meeting?
Your solicitor will discuss any responsibilities you are agreeing to and the risks involved, including:
Terms
The terms of the transaction or agreement and what they mean.
Rights & responsibilities
Your legal rights, obligations and duties under the transaction or agreement. You must understand these fully, as failing to meet them may have serious consequences.
Implications
The legal implications and ramifications of proceeding or not proceeding with the transaction or agreement.
Potential risk
Risks, liabilities and potential legal challenges arising from the transaction or agreement, with an informed perspective against the benefits.
Alternative options
If the terms are not in your favour, the solicitor will identify other legal options or points no negotiate.
Legal compliance
Ensuring that the proposed transaction or agreement is aligned with the law, and applicable regulations and legal standards.
T&Cs
The terms, conditions, and clauses of the contract(s), agreement(s), or document(s) and their significance.
Tax and Finance
The tax liability and financial implications of the transaction or agreement.
Timescales
The steps involved in completing the transaction or executing the agreement and the timeframes for each.
Privacy
Confidentiality and privacy assurances regarding the details of your ILA meeting, in accordance with legal and ethical obligations.
Your Questions
Answer any questions or concerns.
When should you seek independent legal advice?
The most common transactions requiring independent advice from a solicitor are:
Service | What advice is required? |
| Directors Guarantee | Directors of a company are required to get legal advice when obtaining a mortgage. The guarantee makes the director personally liable to pay back the mortgage if the company defaults on the mortgage. You can read more here - Directors guarantee |
| Joint Mortgage Sole Proprietor | For parents helping their children buy a home or even unmarried couples where one party already owns another property to avoid second home stamp duty. They are on the mortgage but not the legal title so the lender needs the solicitor to advise of the risk of being liable for the mortgage debt. You can read more here - Joint Mortgage Sole Proprietor Mortgages |
| Borrower and Proprietor | When you are the borrower and the proprietor of the property on which the loan is secured, and you will not personally benefit from the loan; the loan is for your registered business or another person. |
| Occupier Waiver Form | For occupiers over 18, the mortgage lender requires them to sign a waiver to waive any rights to live in the property if the lender needs to repossess. |
| Second Charge | Where a party is liable for a mortgage/second charge and the money is being used for something they don't benefit from, the mortgage lender requires them to get legal advice on the risk. |
| Deed of Trust | Where joint owners draft a deed and require a solicitor to provide legal advice to one of the beneficiaries about the terms. |
| Deed of Postponement | Where one charge or mortgage is being 'postponed' to place another loan or charge as first priority. You only need ILA on a deed of postponement under specific circumstances:
|
| Separation agreements (such as divorce) | A review of and advice on the separation agreement at the end of a break-up. |
| Bridging Loan | A review of the loan agreement is required to ensure you understand the terms due to the higher interest rates and other risks. |
Equity Release | A review of the lifetime mortgage details and explanation of the risks and costs. Read more - Equity release solicitor costs and process. |
This legal advice is often obtained toward the end of the transaction (purchase or transfer) with a focus on needing the advice quickly - which we can help with as we provide next-day appointments via online video call.
It can often be difficult to find a solicitor who provides the requisite legal advice as many see the work as too high risk, especially following the court case Padden v Bevan Ashford Solicitors where the solicitor was ordered to pay the client £67,000 for not providing adequate legal advice. At SAM Conveyancing we can help with a wide variety of independent legal advice near you or remotely via video call.
What do I get from Independent Legal Advice?
Transparent, legally compliant advice to protect your rights, interests and well-being:
Make informed decisions
Avoid conflicts of interest
Meet legal compliance
Protection from coercion or duress
Establish accountability
Court recognition
It is important to note that all legal advice should be independent. The reason one of you needs further independent advice is that even when you are completing a joint transaction where you both want the same transaction to be completed, you have potentially conflicting interests that need further explanation, to fully understand how you will be affected independently of the other party.
In a conveyancing transaction, once the ILA has been provided, the solicitor issues a Certificate of Independent Legal Advice to the acting solicitor for the transaction or directly to the mortgage lender.
ILA example - Transfer of Equity
John and Mary are separating. They jointly own a property and are transferring Mary's share to John, who will become the sole owner of the property.
Although they share this common goal, Mary will be advised to seek separate Legal Advice from a solicitor who is acting solely in Mary's best interests.
This advice could include explaining that Mary will no longer have a legal claim over the property or support in understanding how much Mary is to be paid for her share of the property and whether this equates to her fair share of the beneficial interest.
ILA example - Joint Mortgage Sole Proprietor ('JMSP') Mortgage Condition
With a JMSP mortgage product, up to four people can be on the mortgage deed. However, one or more of the borrowers will not be a legal owner.
It is a mortgage product often used by parents helping their children buy their first home as the added borrowing capacity afforded by their parent's incomes allows for a larger property budget.
For this type of mortgage product, the mortgage lender will always require the party/ies who are liable for the mortgage (borrowers) but who aren't legal owners (proprietors) to seek independent legal advice on the mortgage product.
How do I know my lender requires independent legal advice?
The instruction from the bank might be similar to this: "The legal adviser must explain the content and effect of the first legal mortgage over the Property to CLIENT NAME and arrange for it to be executed. The legal adviser must also complete the attached standard letter confirming that legal advice has been given. The borrowers must pay any fees relating to this matter."
How do I prove I've had independent legal advice?
The legal advisor will then complete a Certificate of Independent Legal Advice, which will contain the following: "I confirm that I act for CLIENT NAME. I have explained the nature of the Legal Charge and the consequences of signing the first legal mortgage over the property in conjunction with the proposed mortgage application. CLIENT NAME wishes to proceed with this mortgage. I have explained that you require confirmation that I have given this advice so that CLIENT NAME may not dispute being legally bound by the mortgage, and I confirm that I have the authority of CLIENT NAME to give this confirmation".
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Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
