The lending bank may be willing to receive a Certificate of Title from the customer's solicitors (rather than from the firm acting for the lending bank) in certain circumstances where this approach is market standard practice.
Where this is proposed, panel firms should discuss this with the lending bank to establish whether the lending bank is willing to accept this approach in the circumstances of the transaction.
In cases where the lending bank confirms it is willing to accept this approach:
1. the lending bank will require the form of Certificate of Title to be in an industry standard format. In general, for England and Wales this means the most recent COT template published by the City of London Law Society and for Scotland this means the most recent COT template published by the Property Standardisation Group; and
2. the panel firm acting for the lending bank is required to:
- ensure that the form and terms of the proposed template COT is appropriate for the transaction. In particular where the lending bank's security is in 'all monies' form you should ensure that the standard definitions in the COT are amended so that the lending bank's reliance on it is not restricted in any way. In such cases, the COT should be addressed to the lending bank on a “standalone” basis and without reference to any specific underlying finance agreements. You must ensure that the COT includes appropriate reliance and disclosure wording to ensure that the lending bank can transfer the benefit of the COT to another lender/third party.;
- subject to the above point re “all monies” charges, ensure that the COT is addressed, and contains appropriate disclosure and reliance wording, in accordance with the requirements set out in the transaction instruction letter. Where the instruction letter does not specify these requirements, you should ensure that the COT is suitably addressed to the lending bank (where relevant in all its capacities under the finance documents eg as lender, security trustee, hedge counterparty and facility agent for itself and on behalf of the secured parties) and that the bank is able to disclose the COT (a) if required by law or regulation, (b) to its advisers and (c) to any potential assignees/transferees of the security;
- where a valuation report is being obtained a copy will be provided to you by the lending bank. Any valuation report received by you should be forwarded to the Customer’s solicitors to assist them with their preparation of the Certificate of Title; and
- review the Certificate of Title and advise the lending bank of any issues of concern which are identified from such review, including an explanation of those issues and the panel firm's recommendations for dealing with them. Panel firms may wish to use the template Qualification Schedule (Scotland) (.DOC 33KB) or the Qualification schedule (England & Wales) (.DOC 33KB) when advising the lending bank of any such issues.
