Solicitor Certificates

You’ve received your SMSF loan documents from the lender and you’re ready to go. However, you notice that the lender is asking for a Solicitor’s Certificate. What is it?

Borrowers and guarantors in SMSF transactions are often required to obtain independent legal advice before they can draw down on their loan.

A solicitor certificate is a document signed by your solicitor certifying that you received this legal advice.  A Solicitor’s Certificate is a certificate of Independent Legal Advice to a borrower or guarantor in relation to a loan.  In providing legal advice, a Solicitors Certificate confirms to a lender that a borrower or guarantor has received independent legal advice and understands the potential liabilities and risks involved in signing the security documents.

In providing legal advice, solicitors are governed by laws and regulations not only in relation to Legal Profession Uniform Law in New South Wales.

The short answer is that the lender wants you to understand your obligations under the loan documents. This is because the lender is concerned that its loan documents and mortgage may not be enforceable against you if it is shown (later down the track) that you did not understand the documents or you were unduly influenced by a third party. A solicitor certificate helps the lender manage this risk by ensuring that you have the documents explained to you.

Note, a Solicitor’s Certificate isn’t a document that should be obtained lightly, and there are multiple risks involved for the guarantor if they aren’t paying attention.

We require at least forty-eight (48) hours to review the documents between when they are received by our office to when the advice is provided. In urgent situations, such as when settlement is about to take place, we can arrange to have a certificate issued within 3 hours from receipt of all required documentation.

Once we review the documents, we will arrange to meet you to discuss any issues which we are required to draw to your attention. During the meeting we will provide detailed legal advice regarding the security documents.  Only the person receiving the advice and the solicitor providing the advice will be permitted for the meeting.  Another person is not permitted to be present as we need to ensure the advice is independent and you are not being forced, pressured or influenced to sign the security documents.

No.  A Solicitors Certificate does not provide advice on the viability of a transaction in which the borrower is undertaking. Your solicitor cannot comment on the borrower’s ability to make the required payments to the lender, or a guarantor’s ability to make payment to the lender. 

We strongly recommend always seeking financial advice before signing security documents.

If you need a Solicitor’s Certificate contact Allegiant Lawyers by sending us an email to admin@allegiantlawyers.com.au or by giving us a call at 02 9518 3853.