Members of the Law Society of Scotland have voted in favour of changing the current practice whereby a solicitor can act for both the buyer and mortgage lender in property transactions.
Members voted 58 to 27 at the society’s annual general meeting last week in favour of compulsory separate representation for lenders and buyers in all transactions.
New practice rules will be brought forward for its members to vote on at a special general meeting in September.
Law Society president Austin Lafferty says the society became aware of situations where conflict of interest arose, under the current exception, and the protection of the borrower client interest as well as the lender did not align.
He says: “The severe economic downturn, increasingly complex transactions, increasing risk of mortgage fraud and the additional pressures from lenders mean that it is no longer appropriate, and indeed is arguably not in the public interest to continue.”
However, the Council of Mortgage Lenders says it will lead to higher costs and runs contrary to consumer interest.
CML director general Paul Smee says: “At a time when housing and mortgage markets are still recovering, this is a protectionist measure with little regard for the interests of consumers.”