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It has been brought to the attention of the committee that, despite the agreement reached with the IBF and its members in 2009 as part of the revised certificate of title system, some lenders are not honouring redemption figures quoted by them and/or are not issuing vacated mortgages to solicitors who have relied on the redemption figures quoted and paid the requested sums to the relevant lenders. The committee reminds practitioners of the relevant terms of the Law Society Approved Guidelines and Agreement (2009 edition) (available in the members’ area of the Law Society website and in all residential mortgage lending solicitors’ packs) as follows:

• Paragraph 5(d) provides: “If, after completion, the redemption sum quoted by the Lender is found to be inadequate to redeem the loan(s), the Lender shall not withhold the release/discharge/vacate (see paragraph 23 below) but shall be free to pursue any other remedies against the Borrower that are available to the Lender.”
• Paragraph 23(a) provides that “on payment of the sum requested to redeem a Borrower’s outstanding mortgage and a written request to release the Mortgage, a release/discharge/vacate (as appropriate) will be furnished to the requesting solicitor within one month of receipt of payment or the request, whichever is later”.
• Paragraph 24 sets out the detail of how delays on the part of the lenders in, inter alia, issuing vacates are to be resolved. Practitioners should familiarise themselves with this procedure, and should ensure that they invoke it when necessary by specifically referring the relevant lender to the terms of the agreement and calling on the lender to comply with the Guidelines and Agreement. In summary:
  
  
• 1. If the lender automatically issues a vacate following redemption, the vacate should issue within one month of receipt of the redemption monies,
• 2. If the lender requires a written request for a vacated mortgage, the vacate should issue within one month of receipt of the solicitor’s written request,
• 3. If the vacate has not been received within the one-month period, the solicitor should write to the lender, reminding it that the vacate is overdue,
• 4. If the lender does not supply the vacate or does not set out in writing a good reason for the delay within ten working days, the solicitor should notify the lender in writing of the solicitor’s intention to initiate a customer complaint to the lender, and allow the lender a further ten working days to furnish the vacate or a good reason for the delay,
• 5. If the vacate or good reason for the delay is not furnished within the second ten-day period, the solicitor should initiate a customer complaint with the lender – see the Rule 2.46 procedure (of the Consumer Protection Code as issued by the Financial Regulator), which is at the back of the Guidelines and Agreement,
• 6. If the customer complaint procedure is not successful, the solicitor should make a complaint to the Financial Services Ombudsman as agent of the client.
• The committee has drafted sample letters to lenders for resolving delays in furnishing matters to solicitors as agreed under the certificate of title system for residential mortgage lending (2009 edition). These sample letters are available in the members’ area of the Law Society’s website by following either the links for the Conveyancing Committee or for ‘precedent documentation’. The sample letters have been drafted for use where there are delays by lenders in furnishing vacated mortgages, but they may be adapted and used as necessary where there are other breaches by lenders of their agreed obligations under the Guidelines and Agreement, such as delays in issuing deeds on ATR, delays in issuing redemption figures, or delays in releasing solicitors from their undertakings.
• It should be noted that nothing in the foregoing or in any other part of the Guidelines and Agreement restricts or postpones any remedy a solicitor or a client of a solicitor may have against a lender where they reasonably believe that failure to furnish a vacate may result in financial loss to the solicitor or the client or which may affect the ability of either of them to fulfil their contractual obligations to any third party in respect of the property to which the outstanding vacate relates.

Practitioners should also note that the above procedure for resolving delays on the part of the lenders may also be used where there are other breaches by lenders of obligations under the Guidelines and Agreement, such as:

• Delay in issuing deeds on ATR (paragraph 4(a) – within ten working days where the lender has possession of the deeds; or paragraph 4(b) – within ten working days of the deeds coming into the possession of the lender),
• Delay in issuing redemption figures (paragraph 5(b) – within ten working days of the solicitor’s written request), or
• Delay in releasing solicitors from their undertakings (paragraph 21(d) – within ten working days of the solicitor furnishing deeds to the lender).

Participating lenders:

The IBF members who have agreed to be bound by the Guidelines and Agreement for Residential Mortgage Lending (2009 edition) are:

• ACC Bank,
• EBS Building Society,
• AIB plc,
• Bank of Ireland,
• Bank of Scotland (Ireland) Ltd,
• First Active plc,
• ICS Building Society,
• KBC Bank,
• Irish Nationwide Building Society,
• National Irish Bank,
• Permanent TSB,
• Ulster Bank Ltd.

Any other lenders who use the Law Society’s certificate of title documentation with the consent of the Society have agreed to so do on the same basis as IBF members and as set out in the documentation.