The term Independent Legal Advice (‘ILA’) is unbiased and unprejudiced advice given by a solicitor who is not in any way connected to the parties involved in a legal matter or transaction. ILA is required in order to protect the party deemed as not benefiting from the transaction, making sure that they understand the risks of being part of the transaction without undue influence before signing any binding documentation. Therefore, it is vital that you seek ILA before signing any documentations.
You will most likely require ILA in the following circumstances:
Personal Guarantee – This is where a person provides a guarantee to the bank or another lender for the responsibility of another party (i.e., another person or a limited company). The person is therefore accepting to be held responsible by another party if there was a default.
Deed of Subordination – A deed of subordination is an arrangement whereby the junior creditor agrees not to be paid by the debtor until the senior creditor has been repaid in full. It is a legal agreement that prioritizes one debt over another for securing repayments from a borrower.
Joint Borrower Sole Proprietor Mortgage – Joint borrower sole proprietor is a type of mortgage where not all parties to the mortgage are legal owners of the property. For example, if there are two borrowers in the scenario both will be mortgage borrowers, but only one will be named on the title of the property.
Occupiers Consent Form – An occupier consent form waives certain rights of a resident of a property in favour of the mortgage lender. This form can also be known as a Deed of Consent, Deed of Postponement and Consent to Mortgage or an Occupiers Waiver form.
Legal Charge – A legal charge is a legal document signed by a person, the owner/proprietor of a property, which is registered against the property at the Land Registry in order to secure/protect a loan from a lender.
Third Party Legal Charge – A third party legal charge is a security given by a third party which secures the liability against their property for the benefit of an individual or entity, known as the ‘Borrower’.
Gift – The term ‘Gift of funds’ or ‘Gifted Deposit’ is money given by an individual usually a family member to a homebuyer to assist with payment on a property. It could be used for the whole deposit, or just a part of it. The money isn’t a loan and gifted funds, or deposits are given with the understanding that the money doesn’t need to be repaid.
Transfer of Equity – A transfer of equity occurs when a property’s owner adds or removes a person (or people) to or from the title on the home, altering the ‘ownership’ of the property from a legal perspective. Despite what the name suggests, it doesn’t necessarily involve the transfer of any money.
Corporate Guarantee – The term ‘corporate guarantee’ is a company’s legal promise to be responsible for a loan owed by another company.
Debentures – A debenture is a document that is executed in favour of the lender with a covenant to pay them and which grants security over the whole or substantially the whole of a company’s assets. The debenture is usually registered at Companies House.
The process of obtaining Independent Legal Advice
- We send an introductory email requesting for the relevant documents relating to the matter.
- Once we are in receipt of the relevant documents including the ID documents, we will arrange a convenient face to face or video appointment.
- During the meeting, we will discuss the terms of transaction and your involvement to make sure you understand your responsibilities and the risks in the absence of anyone else.
- ‘Wet ink’ signatures are required in the presence of an independent witness where the meeting is virtual and in the presence of the advising Solicitor where the meeting is face-to-face.
- If the advice is given via video call, once the relevant documentation has been signed and witnessed, these hard copy documents will need to be sent to our office address which will be confirmed to you after the meeting.
- Once received we will countersign or sign any separate certificate confirming that you have been provided with the relevant advice and post the original documents by special delivery to your acting Solicitors or any other address you will provide to us.
During the meeting we will discuss the following:
- The nature and terms of the documents in simple terms;
- That the bank or lender may change the terms of main loan agreement/ mortgage offer/facility letter without reference to the person seeking advice;
- The serious risks that can arise from agreeing and signing the relevant document.
- The fact that there is a choice on whether the person wishes to proceed and sign the relevant document/s.
Do you require Independent legal advice (‘ILA’)? If so, please contact us on ila@carterbond.co.uk to schedule a meeting. We have a dedicated team and we offer the same day appointments.
