Question: As part of getting my husband’s business refinanced, the bank is insisting on us taking a second mortgage over our home, which we own jointly. I understand the risks, but my husband assures me the business is sound, which I absolutely accept.
However, the solicitors dealing with the restructuring say I must take the mortgage papers to another solicitor for independent advice. I have contacted another solicitor who wants to charge me a fee which is disproportionately large given that I am happy with the whole process. Can I refuse to see the other solicitor and save my money?
Answer: Yes - you can refuse. However, the bank may not be prepared to complete the restructuring if you do so. This is because if you do not take independent advice, you may be able to allege, at a later date, that your signature was obtained by unfair pressure and the mortgage would be unenforceable against you.
Your own solicitors are acting for your husband (and probably the bank) and there is a conflict, which means they cannot advise you.
The independent firm must check that the business is sound or advise you to obtain accounts for the business and seek advice from an accountant; explain how the mortgage deed will affect you, and advise you fully of all your options.
Then, if the business gets into difficulties in future, the bank will know that you have been given all the relevant information and that they can rely on the mortgage.
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Fiona is a partner in the residential real estate team at Thring LLP www.thrings.com.