Society relaxes engagement rules in mortgage cases
25 Oct 05
Letter of engagement need not be sent to lender as well as purchaser, says Professional Practice Committee
The Law Society of Scotland's Professional Practice Committee has provided guidance on the application of the recent Client Communication Practice Rules to instructions from lenders.
The rules, introduced in August, require a letter of engagement to be issued to all clients at the beginning of a transaction except in certain clearly defined cases. Practising solicitors have since asked the Society for guidance as to how the rules apply to lenders in domestic conveyancing transactions.
The Committee considers that it is unnecessary to provide written information as required by the rules at least in domestic security transactions, as lenders are setting out the terms of the relationship in their instructions to solicitors.
In these circumstances the Committee has granted a general waiver where solicitors are acting for the lender and borrower in domestic conveyancing transactions. Where the firm is only acting for the lender, or is acting in a commercial security, the rules still apply.