So-called free legals leave the borrower without independent legal representation and reliant on the lender’s lawyer.
Advisers who fail to give clients the option of choosing cashback on legal fees when they apply for a mortgage could be doing them a disservice.
Harpal Singh, managing director of Broker Conveyancing, has warned that advisers recommending “free” legals to clients where there is a cashback option could inadvertently land their clients in hot water if something goes wrong.
With legal cashback offers, the client is able to instruct their own solicitor who will represent their interests and to whom they have recourse should things not go to plan.
So-called free legals leave the borrower without independent legal representation and reliant on the lender’s lawyer.
Singh said: “It’s driven by convenience. Lenders like to offer a packaged product that is easy to deliver, easy for the client to understand and the broker to sell.
“However a growing number have realised that some clients don’t just want free legals, so they give them the option of instructing their own solicitor. It’s about delivering choice to the client.”
Payam Azadi, director of Niche Advice, said: “The conversation we always have with clients is to ask whether they have legal representation and if the answer is no, we can recommend a solicitor.
“I do think advisers have just a little responsibility to tell clients that although the legals are free, the solicitor in that instance is representing the lender and doesn’t work for the client.”
Karen James, partner at Ramsdens Solicitors, added: “If the borrower hasn’t got legal representation they would have no recourse at all – they would have to go through their lender who instructed the conveyancer.”
