Hennessy Bowie Solicitors News
Hennessy Bowie & Co has been practising in Bishopbriggs for some twenty five years, principally in the areas of domestic conveyancing, commercial conveyancing, commercial leasing, executries and matters relating to care for the elderly,
Consultation on conflict of interest rule change in property lending
The Law Society of Scotland is to consult with solicitors, lenders and consumer interest groups on proposals to change its rules on conflict of interest in property transactions.
Currently, a single solicitor can carry out work for a client wishing to buy a residential property and their lender, however, solicitors voted in March to remove an exception to its conflict of interest rules which allows them to act for both parties, as solicitors felt that they could no longer represent successfully the interests of the purchaser and the lender. They will be invited to vote on the proposed rule change at a special general meeting in September this year following the consultation launched on Tuesday 18th June.
The rule change would affect all lending transactions where a standard security (commonly referred to as a 'mortgage') is granted over property.
Ross MacKay, convener of the Law Society's Property Law Committee, said:
"The vast majority of commercial transactions already involve separate solicitors advising the buyer and lender so it will have scarcely any impact on transactions of this nature, however, a rule change, if voted for in September, would make this compulsory across the board.
"There has been huge change in the property sector in recent years, which accelerated during the downturn, particularly in relation to bank and building societies' willingness to lend and to the demands that they now make on solicitors who act for both them and the buyer.
"Removing the exception would ensure both parties would get the truly independent advice they require from the solicitor of their choice."
He added: "We don't believe that a change would automatically lead to increased costs for consumers as it will be for the lenders to decide if they are going to pass on additional costs to their customers on top of the administration fees already charged."
According to Mackay, a further potential advantage would be mortgage fraud disruption, which costs the lending industry in excess of £1 billion a year.
Contact us today for advice about buying or selling property in Bishopbriggs and Lenzie. To make an online enquiry please click here or call us on 0141 775 0005
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