I trust my husband - do I still need legal advice before he gets a loan?

My husband's business needs money injected into it and the bank has said it will give him a loan, insisting that I take independent advice. I trust my husband, so is getting this legal advice essential?

Question: My husband and I own our property and don't have a mortgage. He has a business that needs money injected into it and the bank has said it will give him a loan, but it needs to take a charge on our home. I do not have a problem with this and the loan is to my husband, not me. But the bank insists I take independent advice and says my husband's lawyers cannot advise me. I have spoken to a couple of local law firms but they want to charge an arm and a leg. I trust my husband, so is getting this legal advice essential? 

Answer: it is extremely important you seek independent legal advice as the bank has requested. If you fail to do so, your husband's bank may very well refuse to loan him the money. The bank will want to ensure you are fully aware of your husband's intentions and that you understand the implications and risks of a charge being registered against your home to secure a loan which, on the face of it, does not benefit you but is for the benefit of his business.

If the business gets into financial difficulties and cannot repay the loan, you could lose your home. The bank will not want to risk the possibility of you alleging at a later date that your agreement and signature were obtained by undue pressure/influence, thereby making the charge unenforceable.

Your husband's solicitors cannot advise you because there would be a conflict in so doing, as they are likely to be acting for him and his bank. The independent solicitor will charge for time spent attending and advising you.

What's your problem?
If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE. We regret that questions cannot be answered individually but we will try to feature them here. Fiona is legal director in the real estate group of Foot Anstey LLP in Exeter (fiona.mcnulty@footanstey.com)

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor. 
 


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