# Bank of Ireland require a 3rd solicitor for small "commercial" loan



## Dermot (8 Sep 2014)

Bank of Ireland require me to pay their solicitor for a small BTL loan of 40k against a property valued at 110K but would not require me to pay for their solicitor if I was borrowing €80k on it as a private house.

I find this highly unfair as it is only an arrangement between Law Society and Banks and has no basis in Legislation.  It takes no account of the amount of the loan or the ability to repay.  Just classify it as commercial and let the lawyers get on the gravy train. Why would they object to this.  Talk about reducing business costs in Ireland.  Neither of these two organisations would concern themselves about this.  There is no leeway from BoI on this.  Take it or leave it.


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## Leo (15 Sep 2014)

Is there a question here or are you just letting off steam?


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## Dermot (15 Sep 2014)

"Bank of Ireland require me to pay their solicitor for a small BTL loan of 40k against a property valued at 110K but would not require me to pay for their solicitor if I was borrowing €80k on it as a private house."

The question is what is the logic to it. Is it not unfair. Is it just an opportunity to take advantage of a consumer in BTL market. I quoted the facts from a meeting in relation to a loan requirement I had with BOI rep.  
I just raised the issue to see what other people on the forum thought. 
As a matter of fact I raised the money that I require with a friend. All legal and friend covered.
I just considered that it was a legitimate consumer issue.  Nothing got to do with letting off steam.


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## dewdrop (16 Sep 2014)

I think this is a fair and reasonable issue to raise and seek the views of others.  In no way would I consider it in the "letting off steam" category.


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## Bronte (16 Sep 2014)

Can we clarify the issue, you are purchasing a BTL for 110 and are borrowing 40K as a commercial loan. You have your solicitor to complete the transaction, and in normal mortgage situations, this solicitor would also act for the bank. 

Now you are stating the bank wishes to hire it's own solicitor, and you have to pay for this, what will this solicitor do? Why do you say 3rd solicitor?


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## Dermot (16 Sep 2014)

Bronte said:


> Can we clarify the issue, you are purchasing a BTL for 110 and are borrowing 40K as a commercial loan. You have your solicitor to complete the transaction, and in normal mortgage situations, this solicitor would also act for the bank.
> BOI are classifying any property purchase that is not a PPR as a commercial purchase and a commercial purchase requires a 3rd solicitor appointed by the Bank and paid for by the customer.
> 
> Now you are stating the bank wishes to hire it's own solicitor, and you have to pay for this, what will this solicitor do? Why do you say 3rd solicitor?



The 3 solicitors are the sellers/mine and the Banks.  The Banks solicitor will look at the title from the Banks perspective.  This is not about my purchase it is a bank rule for all "commercial loans" large or small. 
Size of loan/ability to pay/borrowing ratios have no relevance as far as BOI are concerned.  It is a blanket rule and is supposed to be for everyone.
I am raising this issue as not everyone is aware of this requirement.  It is an extra cost burden for small businesses in particular.
The Bank do not have much of an incentive to keep the solicitors fees down when it is the customer who is paying.  Solicitor is chosen from a "panel set up by the Bank".  
There will not be much of an outcry from the Law society either when this "bank rule" is generating extra fees for its members. No rant here just stating reality. 
Thanks for the support dewdrop.


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## Bronte (17 Sep 2014)

Dermot said:


> I am raising this issue as not everyone is aware of this requirement. It is an extra cost burden for small businesses in particular.
> .


 
I'm totally at a loss as to why this unnecessary cost is being foisted upon you for such a low amount, and in addition, it's for less than 40% of the actual cost. 

There must be some reason for this new requirement. 

As an aside, I'm currently fixing a loan myself, and the procedures are mind boggling, even though the fix will be less than what I'm currently paying. It's also classed under the commerical division, on an investment property.  No idea why, but they want my last 3 salary slips, my taxes in order, they never in all my years of banking asked for proof of this before etc.


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## Dr.Debt (17 Sep 2014)

Only in Ireland would you need to have three solicitors involved in the smallest property transaction.

Before the crash, the banks trusted the buyer's solicitor to take care of the banks interests by way of undertakings. Some solicitors have screwed up to such an extent that the banks now require their own solicitor to check over the title / security of the property being purchased.

In some of Europe's more developed economies (eg Sweden Finland Denmark et al) no solicitor is needed in such a transaction. What does this say about us.


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## Leo (17 Sep 2014)

Dermot said:


> I just considered that it was a legitimate consumer issue.  Nothing got to do with letting off steam.



Fair enough, but your post was worded more as a rant, there was no question or request for others' opinions.


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## Dermot (17 Sep 2014)

Dr.Debt said:


> Only in Ireland would you need to have three solicitors involved in the smallest property transaction.
> 
> Before the crash, the banks trusted the buyer's solicitor to take care of the banks interests by way of undertakings. Some solicitors have screwed up to such an extent that the banks now require their own solicitor to check over the title / security of the property being purchased.
> 
> In some of Europe's more developed economies (eg Sweden Finland Denmark et al) no solicitor is needed in such a transaction. What does this say about us.



I agree with all of above. 

Here in Ireland we have allowed ourselves to be happy with the two and that is not going to change any time soon.

I just cannot get my head around the idea that had I been buying the same house as my PPR and  borrowing twice as much a 3rd solicitor would not be required.  As previously stated this was confirmed to me in my discussion with BOI.  I am surprised that some of the Financial Journalists have not taken up this issue previously.  I am not going to make a difference but I thought it was worth raising here so as other investors might become aware of it and answer my  question.


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