Reliance Bank Conveyancing Panel Information

We can't comment specifically on Reliance Bank. Many major lenders are now introducing ‘file auditing’ as standard practice in relation to completed matters. This raises questions of confidentiality in relation to the buyer client and the purpose to which the results of such audits will be put. The starting point is to remember that the file does not belong to your firm, it belongs to the ‘client’. But, of course, we will normally have two clients – the buyer and the lender - and you will owe a duty of confidentiality to each. So basically, you have to separate the file and just send the lender the parts solely relating to themselves. But, of course, as this will basically be correspondence with the lender, mortgage instructions etc.

Check with your COLP but a firm should not send the complete conveyancing file without the buyer client’s express consent – and if she is in arrears with the lender she is hardly likely to agree. However, if the lender can establish a prima facie case of fraud, then you may be under an obligation to disclose the whole file.

The emerging convention is that lenders are including an authority to disclose in loan application forms to counter this problem. Mortgage Express v Sawali, [2010] EWHC 3054 (Ch) indicates that such provisions are valid. Please click here for more information about that case.

The majority of lenders do not operate a specific buy to let conveyancing panel but we are hearing about a few that do. We do not know what the position is with Reliance Bank as at todays date. If you're about to receive instructions from a client on a buy to let purchase with a mortgage from Reliance Bank we suggest that you call Reliance Bank to check the position.

The answer to this question really depends on the reason that your firm has been removed off the Reliance Bank conveyancing panel. The top 3 reasons are as follows:

1. lack of transactions
2. the lawyer is a sole practitioner
3. as part of the HSBC panel reduction.

In these three circumstances it is unlikely that you would expected to take any action. Disclosure and other compliance considerations are more likely to be relevant if the reason for removal is due to breaches of lender requirements or allegations of fraud or negligence. Whether the reasoning should trigger a disclosable 'material' breach will depend on the firm and the circumstances around possible failures to comply with the SRA Authorisation Rules, and the SRA will judge each case on its own merits. Factors such as the detriment or risk of detriment to clients, the scale of the issue and overall impact on the firm will need to be considered in deciding whether a failure is 'material'. As the compliance officer you will need systems to identify patterns of breaches. Even if you don't consider there to be regulatory implications the firms COFA should give some thought to whether she/he needs to take any action as result of being removed from the Reliance Bank conveyancing panel.

Reliance Bank approved solicitors have to comply with the Part II instructions relating to Transfer of Equity. These are set out in Section 16.3. First, your firm must approve the form of Transfer of Equity (which should be in the Land Registry's standard form) and, if Reliance Bank require, the deed of covenant on their behalf. You will need to check Reliance Bank CML Part 2 conditions to see if Reliance Bank have standard forms of transfer and deed of covenant. Please note that this requirement can change from one transaction to another so do check! Second,When drafting or approving a transfer, you should bear in mind that: although the transfer should state that it is subject to the mortgage (identified by date and parties), it need give no details of the terms of the mortgage; the transfer need not state the amount of the mortgage debt. If it does, the figure should include both principal and interest at the date of completion, which you must check ; there should be no statement that all interest has been paid to date. Further obligations are set out in the UK Finance Lenders’ Handbook which have to be followed by all firms on the Reliance Bank conveyancing panel

In the circumstances please clarify on the form what action you have taken to find out the reasons behind cancellation of your Reliance Bank panel status. In particular please provide details if you have received communications from the lender. E.G. before revocation of your panel membership did you receive any letters or calls from the lender putting you on notice?

You should get in touch with Reliance Bank to obtain standard documents. The CML Handbook has a specific section for banks to establish who to contact to obtain standard documents. Reliance Bank in their Part 2’s state: It helps to quote the firm’s Reliance Bank conveyancing panel reference.