From 00:01hrs on Tuesday April 19, 2022, all new equity release customers will be required to have at least one face-to-face and in person meeting with a solicitor, in order to take out a plan that is compliant with Equity Release Council Standards.
The requirement marks the end of a temporary revision to the Council’s rules and guidance to enable cases to complete remotely without an in person face-to-face meeting with a solicitor and a return to the Council’s pre-covid rules.
It will also mark the end of a period where legal advice was permitted either remotely or in person and face-to-face which was deemed necessary to keep pace with the changing lock-down statuses in each of the UK’s devolved nations.
The Council will update its website with a new and single solicitors’ certificate that will be available from the above date. All other certificates will be withdrawn on the same day.
Please note:
- Where an offer is issued from April 19, 2022, it will require the new style solicitors’ certificate and remote advice will no longer be permitted.
- Where an offer was issued prior to April 19, 2022, if an in person meeting did not take place the non-face-to-face certificate solicitors’ certificate can be used as long as completion takes place before 23:59hrs on Sunday, July 31, 2022.
- Where an offer was issued prior to April 19, 2022, if not completed by 23:59hrs on Sunday, July 31, 2022, whether re-offered or not, it is not permissible to use the non-face-to-face process. This may require a face-to-face in person meeting and the execution of a new certificate.
- Where an offer was issued prior to April 19, 2022, and in person meeting did take place the in person and face-to-face solicitors’ certificate can be used as long as completion takes place before 23:59hrs on Sunday, July 31, 2022.
- Where an offer was issued prior to April 19, 2022, if not completed by 23:59hrs on Sunday, July 31, 2022, whether re-offered or not, it is not permissible to use the current face-to-face in person certificate. This may require the execution of a new certificate.
For the avoidance of doubt Zoom, or other video meetings whereby consumers and solicitors’ faces appear together on a screen cannot be considered a face-to-face meeting. Such meetings must take place in person.
The requirement for face-to-face and in-person legal advice was eased during the pandemic when a remote legal process was agreed and deployed in the Spring of 2020 as an emergency measure. The purpose of the remote process was to ensure the supply chain would continue to operate during lockdown for borrowers taking equity release products, given that it was difficult to meet solicitors face-to-face at the time. Law firms were closed and over-70s were shielding, meaning that a remote legal process had to be imagined and rolled out to enable continued access to home equity. This became increasingly pressing as families were hard hit through job losses and other financial pressures.
Now that all covid-related restrictions have been lifted, there is no longer a need for law firms to use the remote process and it is widely accepted that a face-to-face model is by far the safest way to prevent fraud and to identify mental capacity and duress issues. Appropriate levels of due diligence must be applied to protect borrowers’ best interests and to continue to uphold the reputation of our sector as one that goes above and beyond regulatory requirements. It is also important that the decision as to which process to use does not fall to the borrower, as this will likely increase the risk of fraud and duress exponentially.
Allowing two processes to operate side-by side is confusing as it also means that two different solicitors’ certificates are in operation and providers’ solicitors have two different sets of checks to carry out. The remote process, by design, takes longer than the face-to-face process to complete (if done correctly with all of the mandatory contact points in place) which means that it will take borrowers longer to receive their funds. Now that the immediate threat from covid is gone, law firms need a single, transparent process to follow to ensure compliance and best practice. That established, if a borrower already has a current offer, and is operating on the remote process, this can continue unless the offer expires.
In the event of a further lockdown, a rollback plan is in place, should it be necessary.
In tandem with the return to face-to-face advice, the new version of the solicitors’ certificate will be launched. This has already been the subject of widespread consultation among members and has been universally approved for release. In essence, it brings the existing guidance into the forefront of the certificate, ensuring it’s extremely straightforward to read and understand and, importantly, very easy to comply with Rule 5.
Kind regards,
Equity Release Council.
