Independent legal advice for a non-borrowing wife providing security over the marital home

Each month, the Farrer & Co Residential Property partners give us a brief insight into their working lives. This month, we provide an overview of independent legal advice given to a wife ahead of her husband taking out a mortgage loan that would be secured against the home they would jointly own.

We recently received a call from another law firm we regularly work alongside. They needed assistance on the purchase of a substantial house with an annex. They were acting for the buyers (a husband and wife) as well as the private bank providing mortgage finance for the purchase. The husband and wife were purchasing the property together and would own it jointly from completion.

Executing the Brief

It had just come to light that only the husband would be entering into the mortgage loan that would provide funds for the purchase of the property. However, because the husband and wife would own the property jointly, the wife would still need to enter into the legal mortgage to grant security over the property in favour of the bank.

This structure – where one party enters into a mortgage loan to fund the purchase of a jointly owned property – is not uncommon, but it does raise legal concerns for the bank. In particular, it triggers a presumption of undue influence, which arises where one party may be perceived as having pressured or influenced another into entering a transaction that is not in their own best interest. Once a bank is on notice of possible undue influence it must take steps to discharge the presumption. If a bank fails to take such steps it may struggle to enforce its security in the event of default by the borrower. In practical terms, this could mean the bank is unable to sell the property to recover the unpaid debt.

For this reason, the bank would need the wife to receive independent legal advice (ILA). The solicitor giving ILA would need to explain to the wife that her property rights would be subordinate to the bank’s rights under the mortgage, and the seriousness of what this could mean for her if her husband could not repay the loan. The bank would only release funds for completion once this process was complete.

This is a perfectly reasonable and standard lender requirement in the context of residential lending. However, as the referring firm was already acting for the borrower and the bank, they were unable to provide the ILA themselves, so asked us to step in. We were happy to assist.

We immediately looked to arrange a video call with the wife to explain the nature of the mortgage and the implications of signing it. While on this occasion, the bank was happy for the advice to be given remotely, our new client preferred a face-to-face meeting. As a result, one of our associates took a diversion on their way home from the office that day to provide the advice in person – a gesture that was greatly appreciated by both our client and the referring firm.

The matter was resolved within 24 hours. The referring firm was appreciative of our swift turnaround, as was the bank, for whom we often act when they require separate representation on secured lending matters.

The debrief

The transaction completed smoothly. The borrower, his wife and their family are now settled in their new home, and the bank can evidence that its requirements around ILA were properly upheld.

A bank will typically require ILA to be given if:

• in the case of joint borrowers, a joint loan benefits one borrower more than the other, or one borrower is not a registered owner of the property which the lender is taking security over;
• in the case of a sole borrower, the property being provided as security is owned by a third party (as in this case study), or there is a guarantor (a guarantor can also provide security for the borrower’s debt); or
• a mortgaged property is to be occupied by adults who are not party to the mortgage deed (although lender approach to third party occupiers varies – a bank will not always insist on ILA in this scenario).

A significant judgment was handed down by the Supreme Court in Waller-Edwards v One Savings Bank plc [2025] UKSC 22 in June, which clarifies when lenders should ensure that individuals entering into non-commercial hybrid loan transactions receive ILA. We have written an article, Love, loans and legal drama: Supreme Court rules on undue influence in non-commercial hybrid loan transactions, examining the impact of the judgment. This covers what will be familiar territory for our banking clients and those regularly involved in high-value residential lending. Anybody else may think it’s a bit specialist interest!

We are always happy to discuss the conveyancing process and how to manage a transaction.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, August 2025