With the introduction of the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 practitioners should no longer provide certificates of advice for borrowers and guarantors to lenders other than those referred to in rule 11.
Rule 11 applies when acting for a borrower, guarantor, security provider and grantor of a security interest. In addition to the use of the Law Society of NSW forms, the rules refer to four LIV forms.
There is a separate LIV certificate where the client is a borrower and another for guarantors. There is also an LIV certificate when using an interpreter or translator. The fourth form is an acknowledgement which needs to be signed by the client.
The forms are currently being updated by the LIV and should be available shortly from their website.
The Law Society of NSW forms can be downloaded from their website at: https://www.lawsociety.com.au/...
LPLC has been informed by the Law Society of NSW that there is no charge for using the Law Society of NSW forms and they are available for use by Victorian practitioners.
In addition to using these forms rule 11 prescribes:
- certain documents should be retained on file including a copy of the client acknowledgment and loan documents
- the necessity to use the verification process under the model participation rules when identifying a borrower, guarantor, security provider and grantor of a security interest.
A breach of the rules may also result in a complaint being made to the Legal Services Commissioner.
Practitioners need to be aware that a deterrent excess applies where an insured is found to have acted in breach of any rule relating to professional conduct or practice.
For information about mortgage claims and solicitor’s certificates refer to the LPLC Practice Risk Guide Managing mortgage risk.
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