Equity Release Solicitors: What do they do and why are they needed?

Chances are, you’re well aware of the Equity Release process and you want to know what role solicitors play and why they are crucial to the process.

An Equity Release solicitor advises and represents you when taking out an Equity Release loan. They ensure that you have had adequate financial and legal advice and that you understand the implications of taking out Equity Release and proceed with full knowledge of the risks, rewards and legal obligations of the plan.

The Equity Release Council, the body which sets out ‘rules and guidance’ for Equity Release in the UK, insists on independent legal advice as part of your Equity Release process. 

Do you need a solicitor for Equity Release?

Yes, you do need a solicitor for Equity Release. All advisers that are part of the Equity Release Council will require you to get completely independent legal advice from a solicitor after they have advised on the most suitable Equity Release plan for you. 

It’s important to note that your solicitor will not be giving you financial advice, they will ensure that you are well aware of the ramifications of your decision and assist with the conveyancing process. 

The Equity Release provider will have a solicitor too, more often than not this is to ensure that a legal charge can be placed against your property. This means that both you and the Equity Release provider will receive separate and independent legal advice.

What does my solicitor do during the Equity Release process?

Your solicitor plays a crucial role in the Equity Release process. Although different practices will have slightly different methods of achieving the same goal, they will all follow a similar process:

  1. When you’ve been through the advice process, and both you and the adviser are happy, you will receive a formal offer from your Equity Release lender.
  2. At this stage you will instruct your solicitor to act on your behalf. Your solicitor will confirm their appointment by opening a case with a unique reference number.
  3. You should expect to receive a welcome pack from your solicitor with forms looking to gather information, they will want to confirm:
    1. Your identity 
    2. Your bank details
    3. An Equity Release questionnaire which will confirm the solicitors ability to act on your behalf and advise you in the best way possible
  4. Your solicitor will make sure that everything is in order by performing a title deeds check.
  5. You can opt to receive your legal advice in person or by telephone or video conferencing. However when it comes to signing the mortgage deed, you will need to be there in person to witness it.

    At this point, signing the mortgage deed, you are officially accepting the terms of the Equity Release agreement.
  6. The documentation will then be sent to the lenders solicitor. They will ensure everything’s in order and close the file after asking any relevant questions.
  7. If you use your Equity Release funds to pay off an existing mortgage, the solicitors will handle it for you. If instructed, your solicitor will pay any completion fees and the remaining funds will be deposited into your account.

How do I choose an Equity Release solicitor?

When you’re choosing an Equity Release solicitor the most important thing to do is make sure you choose a solicitor that is part of the Equity Release Council. 

However there are other considerations that will factor into your decision. It’s worth remembering that at some stage you’re going to have to meet with your solicitor face to face, for that reason people like to use local firms. 

The other things you can do include:

  • Conduct your own research. Look for Equity Release solicitors online and read their evaluations and testimonies.
  • Inquire with your friends or relatives. You might ask anyone you know who has already taken out an Equity Release loan which solicitor they used.
  • Consult your financial advisor. Your Equity Release adviser will most likely have worked with solicitors before and may be able to recommend one.

Irrespective of the other considerations your Equity Release lender may expect your law firm to have at least 3 partners.

How much do solicitors charge for Equity Release?

Equity Release solicitors will charge advice fees when you’re going through the Equity Release process, the total amount they charge will vary on the loan amount but it’s typically between 1.5% and 2% of your total loan.

The complexity of the Equity Release agreement and the complexity involved will also guide the fees you are charged. They’ll look at things like:

  • Anti money laundering checks
  • VAT and bank Transfer Fees
  • Legal advice given
  • Title Deed checks

If your Equity Release loan application is unsuccessful, some solicitors may also offer a “no completion, no fee” guarantee.

At what point should I contact a solicitor?

Once your lender has offered you an Equity Release loan, you will need to hire an Equity Release solicitor. 

Your solicitor will then conduct the necessary legal checks and help you draught the papers to sign your loan agreement.

However, if your situation involves trusts or property sales, you may want to consult a lawyer sooner.

What will slow the process down for solicitors?

When your solicitor checks your title deeds, they will look for anything that could cause the Equity Release procedure to be delayed or prevented. If anything is identified, they will advise you on the best course of action to take.

They are on the lookout for the following:

  • a deceased partner who is still included on the title documents and must be removed throughout the Equity Release process
  • any restrictions in place, such as a Trust (this would need resolving in order to proceed with Equity Release)
  • any land constraints that might need to be investigated or things such as a solar panel lease

How can Joslin Rhodes help?

Equity release can be an attractive prospect. If you do find yourself in a situation where you’re unsure of what you should be doing we’re here to help and support you.

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