We all know that separate representation is the process when the borrower and lender are legally represented by different conveyancers. Over time different firms of solicitors acting for lenders have adopted various processes and demands on the borrower conveyancer to confirm that the lender is adequately protected.
The CML has said
“Separate representation is now more likely to occur in transactions considered to be of higher risk, where there is a conflict of interest, or where the borrower wishes to use a conveyancer who may not on a lender’s panel of approved practitioners.
A sub-group of the CML’s legal advisory panel has now developed two documents, the draft set of instructions for separate representation and a standard letter
that can be sent out to conveyancers.
The CML is now consulting with lenders and other interested parties on these documents. The consultation will run until the end of August”
Amongst the instructions the lenders conveyancer will:-
2) Where Part 1 or Part 2 of the CML Handbook requires the conveyancer to ask the borrower then ask the borrowers conveyancer for evidence and retain it.
3) Obtain copies of the ID checks required by paragraph 3.1.6 and 3.2.5 of Part 1.
4) Verify that the borrower conveyacer and the vendor conveyancer are on the SRA or CLC register.
5) Verify where the balance of funds is coming from.
6) Require the lenders conveyancer to fund the vendors conveyancer directly.
The new proposed instructions can be found by linking to this CML link
The proposed cover letter to borrower conveyancers can be found by linking to this CML link. This letter is effectively a check list of all the things the borrower conveyancer will need to produce to satisfy the lender conveyance. It also includes a new undertaking for the borrower conveyancer to the lender conveyancer .
All conveyancers should read this new consultation document as soon as possible to ensure they are able to deliver best practice to their clients.
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