Do solicitors make commission from insurance they sell?

kingstreet

The solicitor acts for the lender as well as the purchaser in most cases. The solicitor may have to tell the lender, or stop acting for the purchaser if instructed not to inform the lender of a material issue.

Goldiegirl

Regarding the OP's call to his prospective lender yesterday. With the best will in the world, call centre staff aren't mortgage experts, and the 'the people that deal with insurances' were more than likely the team that deals with property insurance.

All I can do is reiterate my experience in the mortgage applications department of one of the major lenders.

If the question of Chancel Repair Liability came up, the solicitor would write to us to advise us, and would recommend that liability insurance was taken out. We would write back to confirm we were happy to proceed on that basis.

As the solicitor protects the interests of both the lender and the applicant, we were happy to rely on the solicitor to take out this insurance. This solicitor would have been on our panel of solicitors, so would be trusted by us to proceed on that basis, we would not need any signed declaration to confirm that the insurance had been taken out.

I can't for one minute imagine that a panel solicitor would risk his status and proceed without the liability insurance just to pander to someone who refuses to take out the insurance.

If you flat out refuse the insurance, then the likely result is the purchase won't proceed.

ijrwe

kingstreet wrote: »

The solicitor acts for the lender as well as the purchaser in most cases. The solicitor may have to tell the lender, or stop acting for the purchaser if instructed not to inform the lender of a material issue.

I understand this post but I'm not sure how you meant to relate it to the issue at hand - sorry!

ijrwe

Goldiegirl wrote: »

Regarding the OP's call to his prospective lender yesterday. With the best will in the world, call centre staff aren't mortgage experts, and the 'the people that deal with insurances' were more than likely the team that deals with property insurance.

Quite possibly - but at least it gives me a reason to open the conversation with my solicitor. I feel like I'm !!!!ing them off every time I speak to them and I think I get charged per email/letter as well, and their reading time.

All I can do is reiterate my experience in the mortgage applications department of one of the major lenders.

If the question of Chancel Repair Liability came up, the solicitor would write to us to advise us, and would recommend that liability insurance was taken out. We would write back to confirm we were happy to proceed on that basis.

As the solicitor protects the interests of both the lender and the applicant, we were happy to rely on the solicitor to take out this insurance. This solicitor would have been on our panel of solicitors, so would be trusted by us to proceed on that basis, we would not need any signed declaration to confirm that the insurance had been taken out.

I can't for one minute imagine that a panel solicitor would risk his status and proceed without the liability insurance just to pander to someone who refuses to take out the insurance.

If you flat out refuse the insurance, then the likely result is the purchase won't proceed.

I understand - and if that's the case then hopefully the solicitor will be willing to give me sight of that correspondence (presumably it's not private or confidential) and I'd then give in to it and throw a day's wages down the drain.

The explanation as to why I must have it, though, was "In accordance with the Council of Mortgage Lenders Handbook it is a requirement of all lenders that where a chancel search reveals a liability, that insurance is obtained."

Which makes me think they're acting on their own initiative and not necessarily with the lender's blessing.

ijrwe

Richard_Webster wrote: »

Lot of constipated bears then....

No we don't get commission. If we did we would have to tell our clients and get their informed consent to keep it.

As I have said before the problem with things like Chancel Insurance is that it isn't 100% clear in the CML Handbook (that sets out the detialed legal stuff we have to check for lenders) that all lenders require it. The way I read what little informaiton there is, is that it is required. If a client getting a mortgage asks why I tell them they have a choice - either pay £10/£15 for a policy or wait around for weeks until I get an answer to a letter to his lender asking for clarification of their policy in this respect!

If the CML handbook is what is available online then the only mention I can find of CRL is in the FAQ:

"What should I do if chancel repair liability is raised during enquiries?

It is up to the conveyancer to decide what searches and enquiries are appropriate for each transaction. You may wish to refer to the Law Society’s Handbook on this issue."

zzzLazyDaisy

ijrwe wrote: »

The explanation as to why I must have it, though, was "In accordance with the Council of Mortgage Lenders Handbook it is a requirement of all lenders that where a chancel search reveals a liability, that insurance is obtained."

It appears that a chancel search has revealed a liability, so it is very likely that the lender wants the insurance.

You do have an alternative though - pull out of this purchase and find a house with no chancel liability.

ijrwe

Here's something:

http://www.practicalconveyancing.co.uk/content/view/10332/1132/

I can't see anything so far that supports the solicitors interpretation of matters.

zzzLazyDaisy

Read this

http://www.telegraph.co.uk/property/propertynews/9438425/Thousands-of-families-could-be-caught-by-church-repair-bills-as-archaic-rights-revived.html

And then decide whether peace of mind is worth £50

ijrwe

zzzLazyDaisy wrote: »

Read this

http://www.telegraph.co.uk/property/propertynews/9438425/Thousands-of-families-could-be-caught-by-church-repair-bills-as-archaic-rights-revived.html

And then decide whether peace of mind is worth £50

Sensationalist nonsense. I already know that "Thousands of families could be caught by church repair bills as archaic rights revived"

Why pay £50 for peace of mind when I already have it, for nothing?

Yorkie1

kingstreet wrote: »

The solicitor acts for the lender as well as the purchaser in most cases. The solicitor may have to tell the lender, or stop acting for the purchaser if instructed not to inform the lender of a material issue.

ijrwe wrote: »

I understand this post but I'm not sure how you meant to relate it to the issue at hand - sorry!

OP, you asked the following question:

ijrwe wrote: »

I suspect that if I flat-out refused to pay for the CRL insurance and the solicitor agreed to go ahead regardless, the lender wouldn't even know or care and my loan would be released just the same, surely?

Kingstreet's answer dealt with that question. The solicitor has to advise the lender of the position before he draws the funds down. The solicitor would not go ahead regardless, as it is his professional responsibility to comply with lender instructions and the CML handbook. So, the lender would know and therefore the loan is not guaranteed.