These are designed to apply when a solicitor or licensed conveyancer is acting only for a lender, rather than for both lender and borrower, in house purchase transactions.
The instructions make up a new section of the CML Lenders’ Handbook for conveyancers and will take effect in England and Wales from 2 July.
One of the new instructions state that where there is separate legal representation of the borrower and the lender, there must be ‘sufficient evidence’ of how the balance of monies have been paid, for example, showing that it has been paid into the borrower’s conveyancer’s client account.
The Handbook lists several examples of what constitutes ‘sufficient evidence’ including a copy of any document certified as a true copy of the original with the name and date of the signatory.
The CML said: “In instances where the borrower specifically wishes to use a conveyancer not on a lender’s panel of accepted conveyancers, or there is a conflict of interest, it is important that there is clarity about exactly what is involved in acting for the lender.
“It is equally important for the borrower’s conveyancer to know exactly which elements of work they are not required to do, and which they are, when acting for the borrower alone. The new instructions are designed to achieve that clarity.”
Jonathan Smithers, chair of the Law Society’s Conveyancing and Land Law Committee, said that the new instructions will provide consistency in cases where separate representation is used.
“We are working with lenders to help ensure that our Conveyancing Quality Scheme supports lender confidence in operating broad panels. We hope that joint representation of lender and borrower will continue to be the norm.”
David Gilman, the partner in charge of Blacks Connect, a broker-focused conveyancing proposition, added: “The CML is right to recognise that an increasing number of cases are not performed with joint representation. This trend will only continue as lenders want to deal with fewer firms that they can do due diligence on and that specialise in conveyancing. There is simply too much cost and risk attached to managing hundreds of small legal partners.
“When the client and the lender have separate legal representation, the conveyancers need to be clear on their responsibilities.”
