What is a Deed of Guarantee on Company Mortgages and what is Independent Legal Advice (“ILA”).
This is a lender requirement when a Company mortgages property. This may be for a purchase or a remortgage. The borrower is the company which is limited and is its own legal entity. The directors who run the company are asked to give the lender a personal guarantee which affects their own assets and not just those of the company.
Companies have limited liability so if the lender repossesses it is difficult to recover the outstanding mortgage debt from the company.
For added security lenders insist the directors’ Guarantee the loan. The directors will have their own assets and the lender can claim against these under the Guarantee.
This is standard practice for company mortgages.
Remember your Conveyancer acts for BOTH you and the Bank.
As a result they cannot give the independent legal advice (ILA) since they may be conflicted.
However, some lenders will allow another Conveyancer within the same firm to give the independent legal advice.
Independent legal advice generally needs to be face-to-face and not all lenders will accept this via zoom or equivalent. Each directors original identification documentation and proof of address will also need to be seen.
Due to the risk to the lawfirm, requirements of the firms professional indemnity insurance, and the complexity of the advice, someone senior will usually deal with this during a face-to-face meeting. The fee will reflect the same.
If you need ILA get in touch now. I am based in central Cardiff and have availability.
07944 377029
Why Did I Start This Blog?
I hope the Blog will be educational and help the public to understand the conveyancing process.
It is your Go to Guide if you are buying or selling or are a homeowner. It will also be handy for property professionals and investors.
The Blog is a useful tool for anyone involved in the conveyancing industry.
Within the Blog I explain what your conveyancer is doing, and why, behind the scenes.
Conveyancers are heavily regulated and the government has made us the frontline for anti-money laundering, ID and property fraud. We often refer to this as compliance and due diligence.
Many clients don’t realise that our purpose is to protect them and their mortgage lender and not to slow the process down.
We are trying to ensure there are no title defects and nothing will reduce property value on resale or remortgage. Lenders insist on conveyancers being involved so they can be sure the property is adequate security for their loan and there are no legal defects. This is why we do what we do.
I sincerely hope the Blog goes some way towards demystifying the conveyancing process.
MY SERVICES INCLUDE:
Acting for anyone Buying, Selling or Remortgaging In England or Wales
I am a:
• Solicitor of 23+ years
• SRA & CQS Regulated
• Help to Buy Accredited
• Recommended - Trustpilot & Yell.com
Instruct me for your:
• Transfer of names on deeds & mortgage
• Equity Release & Lifetime Mortgages
• Bridging Finance
• Auction Property
• Leasehold matter
• Freehold matter
• Trust Deeds & Declaration of Trusts
• ID1 Forms (HMLR)
• Statutory Declarations
• Independent Legal Advice
• Shared Ownership or Shared Equity
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