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  • Mortgages & Finance

    Legal advice for SPV mortgage guarantee

    I have a SPV company buying a house BTL. We have received our mortgage offer and need to get a form signed saying we have received legal advice (from someone other than the conveyancer) that we understand the risks involved in being a guarantor.

    I have phones several solicitors in my area - Guildford, without success. The one firm that said they would do it wanted to charge £500+ costs!

    Does anyone know a solicitor in the surrey area that would do this? Is this fee normal?

    Thanks

    Mat

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    We had two directors and our local solicitor (Kent) charged us £450 in total, probably could find it a bit cheaper but we were time sensitive and had to go with these guys.

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    £450 and £500 are ridiculous prices!!!

    Mine only charges me £95 per client. And this is a sols firm in the city of London!

    Get the yellow pages out and look for sols in your area. Send them the PG document in advance so they have time to read it and then go there to sign it and get them to witness it

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    Would you mind sharing the name of your City of London solicitors? Best local quote I've had is £700+VAT! Thanks in advance

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    They were called Shahriar Solicitors based in E1

    Good luck

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    Yes I have had some experience of this and would say this its normal and an absolute rip off as the banks are just covering themselves against possible future claims at our expense.

    My suggestion is to ring around a few local solicitors to see what rate they charge and to ask your conveyancing solicitor if he can get you a good deal with another local solicitor. They have to ensure that they have covered themselves under their prof insurance but sometimes they will do favours for each other at a reduced price.

    Adrian

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    Thanks for the replies guys. I have contacted about ten solicitors today. One may be able to provide the service at a reasonable fee. If it is true, I will post here so that other people can see what a normal fee should be.

    It is indeed a rip off: there is no reason that the solicitors who are doing the conveyancing cannot just advise me that acting as a guarantor means x and y (they have it on a document anyway!) before I sign the guarantee deed.

    I tried asking the conveyancing solicitor for a recommendation and they said that they could not recommend anyone because then they wouldn't be independent. Lawyers!

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    This is correct - the solicitors doing the conveyancing are acting for one (or probably two) other parties - the Ltd co and the lender - and solicitors professional conduct rules don't allow them to act also for the directors (as there is a potential conflict of interest - you are separate, legally, from your ltd co).

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    Just for the benefit of other newbies out there, ere is what I have found.

    If your mortgage lender says you need to provide a guarantee for the mortgage, you will need to get legal advice, to show you understand what this means. Some lenders accept the advice from your conveyancing solicitor, some don't. Similarly, some conveyancing firms will provide the service and some will claim the legal advice has to be independent of them.

    The service we found costs £450 +VAT. Most quotes were more than this, in the region of £500 - £600. There are two of us and we need to get the advice separately. Even though the advice and documentation is exactly the same, most law firms will charge you twice, though may offer a discount.

    It is not a simple matter of turning up and getting a signature, which is what I thought it was. The law firm needs to read through the guarantee and conditions, the mortgage off and conditions, and whatever other documentation is required in the offer. They read it and then you visit for verbal advice. This is why it costs so much - lawyer time is expensive!

    I would have liked it if my conveyancing solicitor has advised me of all this! Time wasted and unexpected money spent.

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    Your mortgage broker should realy have cautioned you of this annoying bit of the process.

    £450+Vat does sound expencive. On my first go round with this issue, it was a pain. Though in the end I got it done from a conveyancer friend of the main conveyancer at the price of a promise of a Beer.

    Bespoke Finance now recomend a conveyancer that will both represent the company and then represent the guarantor - they have two different branches that allows such. No big issue and often done via Skype.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________


    Hi Adam,

    How much would they charge for it??

    regards

    terry

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