Increasingly, banks and other credit providers are insisting on customers and business entities that borrow funds to obtain a Solicitor’s Certificate in relation to their loan documents and particularly if there is a deed of guarantee required. These Banks and other lenders require a Solicitor’s Certificate in order to shift the risk of the loan and or the guarantee involved over to the customer.
A Solicitor’s Certificate can vary from bank to bank and other financial institutions but basically the solicitor must certify that:
- The people obtaining the loan fully understand and agree with the terms and conditions of the loan agreements and security that is being offered for the loan (as well as receiving and understanding all of the related documents);
- That if there is a default, the bank can sell up the property that they have offered as security for the loan to recover the unpaid monies plus default interest and any other costs of the default;
- That the clients are aware of the repayments the loan agreement will require them to pay, that they have the income to service these repayments, and that they have obtained appropriate advice from their accountant and/or financial advisors;
- If there is a guarantee, the person providing the guarantee understands that if there is a default under the loan, whatever security they have provided under their guarantee (most of the guarantees relate to ALL their assets) may be sold by the bank to recoup the amount owing under the loan plus any default interest and other costs that they incur in the process.
Lawyers providing a Solicitor’s Certificate for a borrower or guarantor client is extremely risky. It is essential we treat the matter as providing professional advice and not just witnessing documents.
How we can help with a Solicitor’s Certificate?
If a Solicitor’s Certificate is not carefully considered and appropriate advice given to our clients, we face the risk of being involved in expensive litigation in circumstances where the only person benefiting from the certificate are the banks.
Our professional indemnity insurers for lawyers are very strict in relation to their requirements for solicitors providing these certificates.
IMPEX provide Solicitors Certificates to our clients at a reasonable fee that reflects the time, skill and diligence required to safely avoid claims against us together with ensuring that clients clearly understand their responsibilities and obligations in accessing their banking and finance objectives.
If you have a document that requires a Solicitors Certificate to be signed, please contact us for an appointment.