Equity Release Council Updates Legal Advice Rules

The Equity Release Council has issued updated legal advice rules that allows for contact time between legal advisers and potential borrowers to be completed remotely.

The change to advice is temporary, being in place only while the government continues its social distancing requirements.

The ERC says that following an industry wide consultation, the new rules will ensure “multiple, mandatory contact points between the solicitor and customer,” through written advice and documented video and telephone calls.

Through the new rules, identity and mental capacity will be established, as well as the fact that the client is not under duress or coercion and that all parties involved agree to the equity release contract. Signatures can be witnessed by an independent adult of the client’s choosing.

ERC chairman David Burrowes says: “This unique and temporary solution is the result of collaboration and sharing of legal expertise among council members in challenging circumstances, to ensure consumers’ interests remain protected. The council will keep this modification under close review until it ceases, when the government ends its ‘stay at home’ requirement.

“The process has also reaffirmed the value of the ‘gold standard’ face-to-face requirement for independent legal advice which is retained to use if and when government guidelines allow.

“Property wealth plays an increasingly important role in later life planning, and these measures to maintain access to equity release legal advice for older consumers will continue to ensure it is chosen for the right reasons, as part of a carefully considered process that looks at both short- and long-term needs.”