Certificate-of-Title system and AML obligations
The committee would like to remind conveyancing practitioners that there is no obligation on the borrower鈥檚 solicitor in the Law Society鈥檚 certificate-of-title system for residential mortgage lending to carry out a lender鈥檚 AML obligations on its behalf.
The committee was recently made aware that a lender introduced such a requirement as a condition of a loan because of a perceived difficulty of meeting with clients during the COVID pandemic. By requiring the borrower鈥檚 solicitor to collect the bank鈥檚 AML requirements, the bank merely passed its COVID-related risks on to the solicitor, which is not acceptable practice.
A lender is not entitled to withhold issue of loan funds for this reason. The committee understands that the lender has since ceased this practice. If practitioners continue to encounter this matter in practice, they should let the committee know, for the purpose of the committee taking up the matter with the relevant lending institution.