This post explains what Independent Legal Advice is, when you may require it in a real estate transaction, and what you should expect after consulting a lawyer. What is an Independent Legal Advice (ILA)
Independent legal advice is provided by a lawyer (and sometimes a paralegal) who does not have any connection with the matter, the other parties or the lawyers providing legal representation in the transaction. The objective is to ensure you understand and appreciate the implications of your participation in
the transaction. The lawyer must act without any bias or prejudice.
During the meeting with the lawyer, they will review the transaction, including any applicable agreements, highlighting key terms of the transaction that will affect your rights and responsibilities. Additionally, the lawyer will confirm that you have the legal capacity to be involved in the transaction and are not acting under undue influence, coercion, or deception.
What to Expect After Consulting a Lawyer for Independent Legal Advice
The lawyer will issue you a Certificate of Independent Legal Advice after the consultation, confirming the following:
a. You have consulted the lawyer for independent legal advice
b. The nature of legal advice sought
c. The lawyer’s independence, that is, the lawyer is not representing any of
the parties in the transaction
d. Your capacity to make the decision and your understanding of the
nature and consequences of the decision being made.
e. The voluntariness of your decision.
The lawyer may require your signature on a copy of the certificate for their records.
When an Independent Legal Advice is Required in a Real Estate Transaction
Obtaining an ILA is quite common in real estate transactions.
Under the Rules of Professional Conduct, ILA is recommended or required when a lawyer has a possible conflict of interest and requires the client’s consent to proceed, such as in a joint retainer, transactions with clients, and when the lawyer discovers an error or omission in discharging their duties to the client that cannot be easily rectified.
Specifically, it is a requirement when the lawyer and their client (who is not a regulated lender) are parties to a transaction that involves borrowing or lending to the client or guaranteeing a loan to or from the client.
Apart from the above instances, a financial institution acting as a lender in a real estate transaction may require a party to obtain a Certificate of Independent Legal Advice in the following situations:
a. For a titleholder in the event of a reverse mortgage
b. For a non-title-holding spouse, where the transaction involves the
matrimonial home
c. For a guarantor of a mortgage loan.
Colex Legal would be pleased to provide advice about specific situations. Our lawyers can provide and sign a certificate of independent legal advice for you. Reach out to us by calling Emeka at 819-230-7116 or Ben at 226-927-8014.
Please note that this post does not constitute legal advice or opinion, nor is it a substitute for legal advice. Please reach out if you have any questions.
Comments