It is essential that you receive independent legal advice as part of any equity release. So much so, that it is part of the Equity Release Council's (the industry body for UK equity release) 'rules and regulations'.
In this guide, you will learn:
As stated above, independent legal advice is a requirement of the equity release process. Having an equity release solicitor ensures that you have had not just financial, but also legal advice on the implications of taking out equity release.
It also acts as an extra safeguard for you from any 'rogue' equity release advisors or any undue influence from a third party.
Remember your solicitor works for you. No advisor, lender, or another party can force you to use any particular solicitor. It is your free choice which solicitor you use.
Your equity release lender will also have a solicitor to represent them. The role of the lender's solicitor will primarily be to ensure that the equity release provider can secure a first legal charge over the property on which the loan is taken out.
Taking out an equity release plan is an important decision, and it is vital that you receive expert, impartial financial advice to find the best plan for you. If you would like help with your equity release options, you are welcome to call us on 0207 158 0881 or use our online form to request your free consultation.
Once you have discussed your options with a financial adviser and made the decision to proceed, your solicitor will be instructed to give you independent legal advice.
If you have a regular solicitor that you use, you should mention them to your adviser. Your adviser will be able to check with the equity release lender that the solicitor is on their panel and meets their requirements.
The equity release lender will usually expect that any law firm being used for the equity release application, must have at least 3 or 4 actual lawyers/partners in the firm. This requirement means that your regular local solicitor may not be acceptable. This is not a rule that only applies to equity release; it is one that often applies to standard mortgages as well.
We can recommend a solicitor to you!
England & Wales
We recommend Ashfords solicitors, whose equity release team specialise in advising clients on the legal implications of all types of Equity Release.
Ashfords are one of the largest specialist equity release solicitors in the UK and advise thousands of clients every single year.
Ashfords Equity release processing is based in Exeter, and they have offices throughout the south of England.
You can meet your Ashfords solicitor in your home or at one of their offices (Exeter, London, Bristol, Taunton, Plymouth, Tiverton).
If you choose to use Ashfords, we can even instruct them, which is one less thing for you to do!
Like Money Release, Ashfords too work on a 'No-Completion, No-Fee' basis, and offer a fixed price for their equity release advice.
For Scotland, we have previously worked with Caesar and Howie and are happy to recommend their service.
We will also be able to instruct them for you.
For Northern Ireland, Donnelly & Kinder will be able to help with your equity release.
You may also refer to the Equity Release Council website, who list solicitors in your area who are able to help with equity release www.equityreleasecouncil.com/find-a-member/solicitors/.
Charges will vary between different solicitors, so it is advisable to obtain quotes before instructing anyone to act for you on your equity release.
As a guideline, we would recommend allowing £995 including VAT for your solicitor fees (it is what Ashfords charge for their equity release legal advice).
Check that the fee covers your legal advice, money laundering checks, bank transfer charges, obtaining land registry copies and VAT.
There are also additional legal services that you may require as part of your application process.
Examples of these services include dealing with:
- third party lawyers in divorce cases and title transfers;
- Changes of name deed – e.g. if title deeds are still in a maiden/married surname and you have since changed your surname;
- CCJ's & restrictions on title deeds;
- Bankruptcy issues & third party lawyers;
- Lease extension & third party lawyers;
- Property sale/purchase & third party lawyers;
- Freehold title split;
- Breaking a Trust;
- Transferring a property (into single or joint names);
- Varying a solar panel lease.
These will involve additional costs, so please remember to check with the solicitor you wish to instruct how much extra they will charge.
At Money Release, we recognise that it is essential to provide value-for-money, and secure the best deals for our clients. It is why we don't charge any upfront fees for our advice or for starting an application.
In addition to this, we also provide a 'No-Completion, No-Fee' agreement to all our clients for advice received. Ashfords also work on the same basis; Fees will only be due on completion of your equity release application.
At the start of the equity release application process, you are required to instruct a solicitor to act for you.
Different solicitors may have slightly different practices; however, their service will likely follow the below path.
1. Case opening
Your solicitor will open a case file and provide you with your unique reference number. You will need it whenever you contact them for updates or provide them with information.
2. Welcome pack
You will be sent an introductory pack with information about their service and also some forms to complete:
Equity Release Questionnaire
This form is your acceptance of the firm acting on your behalf and agreement of their terms and conditions. It may seem like there are many questions. However, they are all applicable to your equity release application. They will also allow the solicitor to offer the best service to you.
Confirmation of bank details
This form will need to be completed and returned to the solicitor with a copy of your bank statement. This will allow the solicitor to carry out their checks against fraud and ensure that when sending the final funds to you, they arrive safely into your bank account.
3. Title deeds check
Your solicitor will obtain an official copy of your title deeds from HM Land Registry. This will provide them with details of your property, together with any mortgage or secured loans against your property.
They will also review the deeds to see if anything else may need addressing that could cause delays in the process. We will explore some of these instances later in the article.
Once the lender makes the formal offer, both you and your solicitors will receive separate copies.
This is the point where the legal team start to pour over the offer and prepare their legal advice for you.
5. Signing meeting
Regardless of how you opt to receive your legal advice, you are required to have a physical meeting to witness the signing of the mortgage deed.
At this meeting, you will be able to ask any questions that you may have about the legalities of your equity release plan.
Once you and your solicitor are happy, you will be asked to sign the mortgage deed.
The signing of the mortgage deed marks the point where you are formally accepting the terms of the equity release.
6. Identity checks
The solicitor must check your identity to comply with Money Laundering Regulations. As above, it is also a legal requirement that they meet with you face to face to witness the signing of the mortgage deed. So often, your solicitor will check your ID documents during your face to face meeting.
Your meeting will usually be arranged once you and your solicitor have received your offer, to tie in with signing the mortgage deed.
Your solicitor will also require proof of ID and Proof of address and the following documents that may be used:
ID and Age
- Valid Passport
- Valid photocard driving licence
- National identity card (for non-UK nationals)
- Firearms certificate or shotgun licence
- Identity card issued by the Electoral Office for Northern Ireland
Don't worry if you don't have any of the above photo ID. You will be able to use a valid old-style paper driving licence alongside recent evidence of state or local authority funded benefit (such as housing benefit and council tax benefit or tax credit documentation, pension and educational or other grants).
Please note that ID documentation must show your full legal name.
Proof of Address
- Bank/Building Society/Credit card statement (dated within the last three months)
- Household or domestic utility bill (dated in the last three months)
- Council tax bill (current year)
Your solicitor will send the signed documents to the lenders' solicitor to review.
Once the signed mortgage deed has been sent to the lender's solicitors, they will review the entire case. These final checks are to make sure that all documents are ready for the case to complete (and you to receive your money).
If any questions are raised, the two solicitors will liaise, and ensure any additional requirements are met, so that all is in place ready for completion.
This part of the process can take a very short, or a very long time to complete. This is another reason why I believe that it is crucial that you have a solicitor that has handled equity release advice before. It is even better if they are familiar with what specific lenders require!
If you are paying off your existing mortgage with your equity release funds, it will be taken care of for you and paid by the solicitors. Your solicitor will also, if instructed, pay any fees due at completion.
You will then receive the remaining funds into your bank account!
When your solicitor reviews your title deeds, they will check if there is anything that may delay or prevent the equity release process taking place. If anything is highlighted, they will advise you on the best way to proceed.
The types of things they will look out for may include:
- any restriction, such as a Trust in place (this would need to be removed to proceed with equity release);
- a Tennants in Common restriction – we have a handy related article all about equity release for tenants in common;
- any land restrictions that may need to be explored;
- a Solar Panel lease;
- a partner who has previously passed away, and is still on the title deeds that will need to be removed during the equity release process.
If anything should come to the solicitor's attention, they will be in contact with you and with us, with any action required to proceed with your equity release application.
There may be certain situations that arise whereby additional solicitors will be required.
If there are additional occupiers aged 17 or over permanently residing in your property, they will likely be required to sign an 'occupier's waiver' form. This could include family members or lodgers. The occupiers will probably need to obtain a solicitor for legal advice and to act as a witness for the document signing.
If the other occupier is also a party to the equity release application, they will not require separate solicitors.
If equity release is being used as part of a divorce settlement, then both parties will be required to have their own solicitor.
If you are extending your lease as part of your equity release application, then you will require agreement from the freeholder. Once they have agreed to extend the lease, they will instruct their own solicitor to liaise with your equity release solicitor.
Transfer of property title, whether it is from Joint to single ownership or single to joint ownership, will require both parties to have a different solicitor.
Such circumstances will come at an additional cost and may require up-front payment.
If you are concerned about how your circumstances could impact the legal costs for equity release, get in touch, and we will gladly help.
If you have further questions, why not speak with one of our qualified advisors?
Call us on 0207 158 0881 or use our online form to book your FREE consultation.
While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.
To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.