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Amendments to the Council for Mortgage Lenders’ Handbook (Scotland)

12 June 2015

The Council for Mortgage Lenders (CML) issue a Handbook which provides instructions for conveyancers acting on behalf of lenders in residential conveyancing transactions. A Handbook is provided for each legal jurisdiction in the UK. The Handbook changes from time to time and conveyancers require to keep themselves up to date with any amendments made to the Handbook.

It is essential that conveyancers familiarise themselves with the reporting requirements outlined in the Handbook. Any failure to report is deemed to be a breach of the Handbook and the conveyancer could find themselves on receipt of a claim for breach of contract and/or negligence if the lender suffers a loss as a result of that breach. In fact, claims for non-compliance of the CML Handbook account for a very large percentage of the overall claims against solicitors under the Master Policy.

Gillian Harman
Gillian Harman, Associate

Audrey Blair
Audrey Blair, Senior Associate

Amendments have been made to the Scottish version of the Handbook which took effect as of Monday, 8 June 2015. The amendments have been made as a result of joint work undertaken by the CML and the Law Society of Scotland to identify any improvements which should be made to the Handbook.

Amendments are being made to Clauses 5.5.1, 6.7.4, 10.4, 14.1, 14.2 and 15.1.

Clause 5.5.1 has been amended to reflect the changes made to the wording already in the England and Wales version of the Handbook.

A small amendment has been made to Clause 6.7.4 which deals with professional consultants’ qualifications and experience.

Clauses 10.4 and 15.1 have been amended to reflect the introduction of the Land and Buildings Transaction Tax in Scotland which replaces stamp duty.

Clauses 14.1 and 14.2 has been substantially amended to reflect the changes in Scotland as a consequence of the Land Registration (Scotland) Act 2012, which came into force in December 2014.

Clause 14.1.2 deals with the introduction of Advance Notices by virtue of the 2012 Act. While the changes do not go as far as imposing a general obligation to lodge an Advance Notice in every case when acting for a lender in the creation of a Standard Security, the onus is put on the solicitor to apply for one “where in your professional judgement it is appropriate”. Accordingly, conveyancers should ensure they are familiar with this clause and give due consideration in each transaction as to whether, in the particular circumstances of the case, there are particular reasons an Advance Notice would be appropriate or prudent.

Clause 14.2 deals with lenders’ requirements post settlement regarding delivery of titles now that, following the 2012 Act, paper Land and Charge Certificates are no longer issued by the Registers of Scotland.

These amendments follow on from previous amendments made to the Handbook in December 2014.

The Law Society of Scotland have compiled a helpful compliance checklist for use by conveyancers:

http://www.lawscot.org.uk/rules-and-guidance/section-f-guidance-relating-to-particular-types-of-work/division-c-conveyancing/advice-and-information/cml-handbook-compliance-checklist/

For the full text of the updated version of the Handbook, please see CML website:

http://www.cml.org.uk/lenders-handbook/

Contact: Gillian Harman, Associate gah@bto.co.uk or Audrey Blair, Senior Associate abl@bto.co.uk T. 0141 221 8012

 

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