Lawyers whose major work is in real estate, as well as general practitioners who only enter the field occasionally, are increasingly encountering lenders’ mortgage instructions that fall outside their area of expertise.
This kind of information creep has been on the CBA Real Property Section’s radar for some time. At a 2015 meeting, “Lawyers from a number of jurisdictions across Canada expressed their concern that instructions were increasingly calling upon lawyers to provide assurances that were burdensome and inappropriate,” CBA member Mark Tipperman wrote in an article for the Section.
As lender instructions increase in scope, lawyers may find themselves being pressured to give opinions and assume responsibility for matters outside their areas of expertise. The result is a significant increase in potential liability.
In response, the Section created a Mortgage Instructions Toolkit that can help lawyers respond to common lender instruction requests. It presents sample situations, along with sample lender questions, and offers guidance on what to say and do when those situations arise in your practice. The Section has just updated the toolkit with new chapters on conflicts of interest, access to the property, independent legal advice and the responsibility to ensure or certify. More updates are expected later this year.
Among other things, the toolkit advises:
When responding to requests, limit the scope of your legal services to matters within your expertise. Restrict opinions to matters of law where you have conducted appropriate due diligence, and do not give opinions on questions of fact. When a request falls outside your expertise, provide the lender with applicable third party information, identifying the source. Avoid any implication that you have expertise in the matter.
But wait, there’s more!
CBA members have created lots of helpful tools for lawyers and their clients. These, along with Mortgage Instruction Toolkit, are all available on the CBA website.
Child Rights Toolkit
Is there a family law component to your practice? Then you might find this helpful – a one-of-a-kind toolkit to help legal professionals advocate, and make better decisions, for children.
Successfully Parenting Apart
People in crisis don’t always make the best decisions for themselves, but parents in the midst of a marital breakdown still have to be careful to make the best decisions they can for their children. This is a resource that you can offer your clients.
Tax Matters Toolkit for Lawyers
This is a guide to help lawyers understanding how tax rules might affect their future finances in separation or divorce. We have one for clients too!
And don’t forget our series of legal health checks, meant to give your clients some basic legal information about issues important to them.