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A number of practitioners have indicated to the Conveyancing Committee that they have been advised by Ulster Bank that the bank has a policy that a solicitor cannot act for family members borrowing from the bank. It appears that this policy applies to both residential and commercial lending.

It is the view of the committee that this policy is too broadly applied by the bank.

Residential loan transactions: the committee notes that SI 211 of 2009 provides that a solicitor may not give an undertaking for his or her own secured loan transactions or those of ‘connected persons’ unless the solicitor has notified the bank (of the beneficial interest in the underlying property used to secure the loan) and the bank has, in writing, both acknowledged receipt of such notice and has consented to the solicitor supplying the undertaking. While this SI originally applied to both residential and commercial loan transactions, it now applies only to residential loans because of SI 366 of 2010, which has since prohibited borrowers’ solicitors from giving undertakings to lenders in commercial loan transactions.

The term ‘connected person’ is defined in the above SI as including:

• The spouse of the solicitor,
• Another solicitor who is a sole principal or a partner in the firm in which the solicitor is engaged,
• A person who is cohabiting with (but not married to) the solicitor in domestic circumstances for at least three years,
• A fiancé(e) of the solicitor.

Other family members are not included in the definition of connected persons.

Commercial loan transactions: in commercial loan transactions where a borrower’s solicitor acts solely for the borrower and is not furnishing an undertaking to the lending institution, and the lender has its own legal representative, the committee sees no justification of any bank policy that would purport to prevent a solicitor from acting for any of the above categories of ‘connected person’ or any other family member in a commercial loan transaction.