What is a solicitor's certificate?
A Solicitor’s Certificate is a certificate of Independent Legal Advice to a prospective borrower or guarantor in relation to a proposed loan. In providing such advice, the certificate confirms to a lender (e.g. a bank) that a prospective borrower or guarantor has received independent legal advice on the potential liabilities, consequences and risks involved in signing the security documents.
Although some lenders may convey that a solicitor's signature is all that is required, compliance with the National Credit Code (NCC) and the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 together impose strict procedures on how these security documents can be executed, including how a solicitor's certificate should be provided.
A solicitor's certificate does not constitute financial advice
Furthermore, although solicitors can provide legal advice, they are not equipped or qualified to provide financial advice. Obtaining a solicitor's certificate does not mean that a guarantor or borrower is advised on the financial viability of the transaction, nor can it comment on the borrower’s ability to make the required payments to the lender, or the guarantor’s ability to make payments to the lender.
For that reason, we strongly recommend seeking financial advice in addition to any legal advice that is received as part of a solicitor's certificate before signing any security documents.
Why is a solicitor's certificate important?
There are many reasons why a solicitor's certificate is important.
The main reason is that it informs a prospective guarantor or borrower of the potential risks, consequences and liabilities of entering into the transaction. A lender for instance may often require a guarantor to put up their property as security for the loan. Accordingly, the guarantor would need to be advised of the risk they face in losing their property if they proceed with the transaction.
Other reasons can include but are not limited to the need to make sure that the property being put up as security is correctly identified, and that there are no other errors in the documents, including the time to repay the loan and the applicable interest rates.
How do I get a solicitor's certificate? How long does the process take?
At Rigby & Bear, we pride ourselves in the provision of quality and timely advice in relation to your obligations as a borrower or guarantor.
Our turnaround times for the provision of the advice and preparation of a solicitors certificate are generally 48 hours from receipt of the security documents.
If you would like our assistance in reviewing your security documents and obtaining a solicitor's certificate click here.