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There is no law that prohibits a solicitor acting for a family member. However, solicitors are prohibited by law from giving certain undertakings to lending institutions in certain cases. Some lending institutions, as a matter of policy on their part, will not accept undertakings from solicitors in a broader range of cases than is addressed by the law applicable in this regard. This, in effect and practice, means that solicitors are being told by banks that they cannot ‘act’ for their family members in those cases.

Following requests from practitioners, the Conveyancing Committee asked Permanent TSB to change its policy, which previously precluded solicitors from acting for a wide range of family members borrowing from the bank. It is the view of the committee that this policy was applied too broadly by the bank.

Following a consideration of the matter, the bank has advised the committee that it has narrowed the scope of its policy and now will accept undertakings from solicitors, except where the ‘connected person’ in respect of whom an undertaking is being given is a parent, child, or sibling of the solicitor (or is in one of the categories of ‘connected persons’ set out in ).

The bank has also advised the committee that the bank may permit exceptions to the categories of connected persons set out in the statutory instrument and also in respect of the above three categories of connected persons at its discretion and on a case-by-case basis.

It should be noted that SI 211 of 2009 allows a lending institution to specifically agree to accept an undertaking (which would otherwise be prohibited by the statutory instrument) in respect of a connected person where:

• The solicitor asks the bank in writing for permission to give the undertaking, and
• The bank agrees in writing to accept the undertaking (see below for more detail).

It is important for solicitors to keep these written records on file requesting and receiving permission to give undertakings (which would otherwise be prohibited) to satisfy a future regulatory or other audit.

While the committee is pleased to note that the bank has narrowed the scope of its policy, it is still of the view that the policy exceeds the scope of the restrictions imposed by SI 211 of 2009. The committee is pleased to note that the bank may be flexible in its approach to giving exemptions on a case-by-case basis.

The committee wishes to clarify the application of SI 211 of 2009, as follows.

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 statutory instrument, on the face of it, applied at the time to both residential and commercial loan transactions, it now, in effect, applies only to residential loans, because 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.