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Has everybody experienced the "Certificate of Confirmation of Advice" with a Ltd Co?


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Hello, I am currently in the process of purchasing my first buy-to-let under a limited company and Paragon (the mortgage provider that I am using)  have requested that I have a "Certificate of Confirmation of Advice" provided by an independent solicitor which will end up costing £600 in legal fees (two hours work). I have brought this unexpected cost up with my mortgage broker and he assures me that this is a standard procedure for every mortgage under a private limited company and will have to be done whenever I move lender or for any future purchases, although I have personally never heard of it before. Is this something that anyone else has gone through?

Many thanks for anyone that can give me some advice, it is greatly appreciated.

Nick  

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You need some legal advice personally, and so the solicitor handling the purchase needs to act for you, the company and also the lender. Generally the solicitors fee for a limited company purchase is higher as a result.

Generally clients will use a large enough solicitor so that a seperate lawyer can handle the personal aspect and it shouldnt require a fully independant solicitor firm. £600 +VAT sounds like they simply dont want to do it and instead of saying so, quote a fee that rightfully made you balk!

If your conveyancer has multiple partners, you should be able to have this signed off by them and the cost incorporated into your overall fee's.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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Hi Nick

The first time I purchased through a Ltd Co I had to do one with Precise mortgages, cost about £300 and another (commercial) solicitor from the same firm ran through the advice. It was literally 10 minutes explaining what the Ltd Co was getting into with the mortgage as everything needs to be arms-length for your Ltd Co. You sign a few bits and all done. Easy work for the solicitor! 

Second time with Lend Invest and they didn't require one. 

Good luck with the purchase!

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Hi,

  I have bought a few houses with a Ltd company and my mortgage lender Kent reliance did ask for this via the solicitor. I had no clue why it was required then but just got it done after a fellow investor had to also go through the same.I had to do some research on solicitors who would do it for cheap. Each of them quoted varying prices, you can get it done for a lot cheaper than 600£ in London, and you have to be in person to sign it. Not sure about the prices in other cities.

Good luck with the purchase.

Manju

 

 

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£600 is incredibly steep!! I use The Mortgage Works - all that is required there to seek independent financial advise to ensure the directors are aware of everything involved with been a guarantor on a ltd company mortgage.

 

Like others have said, it's not an exhaustive piece of work and we've built a relationship for a minimal amount for any future ones.

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We've had Independent Legal Advice (ILA) required on every mortgage, and you'll find that a lot of firms just straight out avoid it as there's little upside for them and mostly liability if you try to claim incorrect advice etc (which we all know is nonsense as they'll have themselves covered, and who's gonna try and sue a lawyer?).

We've found local firms that will do it, and it varies in cost based on the amount of pages the lender wants to be reviewed by the ILA solicitor.

I'd give anything for a low-cost ILA firm to do it via Skype, but think that there's no feasible way for solicitors to modernise with the fear of not doing everything in person and physical witnessing of signing etc.

Tommy | Trifecta Properties
Website: www.trifectaproperties.co.uk

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It's a personal guarantee and we've been required to do one for each application. Some companies have allowed another solicitor in the same firm, others require someone completely independent. It's a pain to find another solicitor, as you're paying someone to read through all the paperwork and then tell you you're liable for paying the mortgage, but there's no way around it.

Last time, we used an online firm - ila-connect.co.uk. They charged £250+VAT for one director, £395+VAT for two. Meetings was done via Skype

 

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  • 1 month later...
  • 6 months later...

I live in the Surrey hands board and solicitors around here charge £280 inclusive VAT and the solicitor I used will even do it via video call. There were through an the session I had in Jan 2020 (pre COVID-19) lasted almost an hour as they asked about our circumstance, in that regard they did earn their fee.

My only other comment is that Paragon instead on this however Paragon insisted on a lot of things and is by far the worse lender I have ever dealt with as they are exceptional risk-adverse and required everything to be done on paper and via mail which meant the process was excruciating slow.

I am not buying my 2nd via my Ltd SPV and this time with The Mortgage Works, and I am receipt of the mortgage offer. I read this post and then called the Mortgage Works up, I explained this is the 2nd property I am buying via Ltd structure and that my last lender required a Certificate of Confirmation of Advice. I then asked do I need Certificate of Confirmation of Advice for this application. The agent went away and came back and confirmed that The Mortgage Works does not require me to have one.

In summary, ask your lender as the advice may be different depending on your circumstances.

 

John

 

 

 

 

 

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