When securing a bridging or development loan, the legal process can make or break the experience. Both the lender and borrower must ensure they are adhering to all necessary legal procedures. Having the right solicitor on board is essential.
Understanding what to look for in a solicitor can make all the difference in ensuring a smooth and efficient transaction.
In this edition of Roma Recommends we caught up with our FLOW underwriting Team Leader, James Edwards, to discuss the importance of getting the right solicitor onboard.
Specialism is Key: Why Not All Solicitors Are Equal in Bridging Finance
First and foremost, find a solicitor who specialises in bridging finance. Not all solicitors are well-versed in the specifics of short-term property finance, and those without the right expertise might not be up to speed on the precise requirements for a smooth transaction.
One of the best ways to ensure a streamlined process is to ensure the solicitor only provides the information the lender has requested. ‘Over-providing’ documents can unnecessarily slow things down.
Top Tips:
- Clarify the solicitor’s role and location: Choosing a solicitor who is local to you, or the property is beneficial for efficient communication. A solicitor familiar with the area will likely more effectively navigate the local legal landscape. A local firm will also make it easier when it comes to signing documents.
- Understand the importance of timing: A solicitor’s awareness of your completion dates and their ability to respond quickly and collaboratively is invaluable. Make sure you have clearly communicated your required completion dates at the earliest opportunity.
- Experience Matters: Navigating the Nuances of Lending: Another key consideration is the solicitor’s experience, particularly when it comes to the nuanced world of finance. The lending landscape can be complex, and it’s essential to ensure your solicitor understands key aspects like title insurance, specialist lending, and can adhere to tight deadlines.
- Title insurance: Roma uses title insurance as a sword rather than a shield, allowing transactions to complete faster. Ensuring only essential information is reviewed, helps streamline the process and allows the borrower to access funds at speed.
What is title insurance?
Roma Finance utilises title insurance as an efficient tool to expedite the process. Title insurance allows transactions to be completed faster by protecting both the lender and borrower from unforeseen third-party claims that may arise on the property. This coverage helps avoid delays and ensures the transaction proceeds without unnecessary setbacks.
Auction purchases as standard require completion within 28 days, making speed a vital factor. Title insurance minimises the risk of delays, making it an invaluable component of the lending process.
Key Questions to Ask Your Solicitor
- Do you have two SRA-approved managers? This is crucial for meeting the title insurance requirements of some lenders like Roma.
- Is your firm equipped to handle fast case turnarounds? Bridging finance transactions often require swift action, so a solicitor with a reputation for quick response times is essential.
- Do you have experience with bridging and/or development finance? A solicitor experienced in these areas is better equipped to manage the complexities of these specialised transactions.
Roma tip
At Roma Finance, we advocate assembling a ‘Power Team’, a network of professionals with the specialised expertise to handle all aspects of the transaction effectively. This can include your broker, solicitor, business partner, mentor, quantity surveyor, architect, and lender to name a few.
Key Takeaways
- Title insurance is highly recommended for accelerating the process and reducing risk.
- Speed, responsiveness, and proactivity are critical in the fast-paced world of bridging finance.
- Locality matters, especially for transactions involving specific regional knowledge.
- Experience in bridging or development finance is necessary to navigate the intricacies of these types of deals.
By following these insights, you can effectively navigate the legal intricacies of lending and ensure that your property investment transaction proceeds without unnecessary delays. At Roma Finance, we understand that the right solicitor can greatly impact the success of your loan, so take the time to find one with the expertise to support your needs.
