You’ve found the perfect investment property and need a bridging loan fast, when someone suggests using one solicitor for both you and the lender, to “save time and money.”
While this offer sounds appealing, it raises an important question – is having one solicitor looking after both your interests and the lender’s really a good idea?
By understanding what dual legal representation really means, you can make smarter decisions that balance possible cost savings with proper legal protection.
This guide explains how dual legal representation works for UK bridging loans, when it might suit your situation, the potential advantages and drawbacks, and what alternatives you have.
Shared Legal Representation Explained
When you take out a bridging loan, the borrower and lender usually have different solicitors to carry out the conveyancing work.
Dual legal representation means one solicitor or law firm acts for both you (the borrower) and the lender in the same transaction.
This contrasts with the traditional approach where you’d have your own solicitor protecting your interests, while the lender would have a separate solicitor focused on theirs.
This practice isn’t new in the broader mortgage market.
For many years, standard residential mortgages have often used a single legal team for both parties and it’s very common for remortgages. What’s changing is that more bridging lenders are now offering this option too, presenting it as a way to speed up the process and reduce costs.
Several major bridging lenders have embraced dual representation recently. Companies like LendInvest, Hampshire Trust Bank, United Trust Bank, Hope Capital, and Mint Property Finance have all announced this option across various bridging products.
This trend shows growing acceptance in the bridging market, though some legal experts remain wary of the practice.
For you as a borrower, the key question becomes: does having one solicitor working for both sides actually benefit you, or does it mainly serve the lender’s interests?
From Application to Completion
The legal process begins when you apply for a bridging loan.
If the lender offers dual representation (not all do), they’ll present you with a panel of approved solicitors who can act for both parties. While you have a choice from this panel, your options are limited to firms the lender already works with.
Once you agree to shared representation, the chosen solicitor handles all aspects of the legal work.
They’ll conduct searches and due diligence on the property, prepare the loan documentation, advise on the terms, and manage the completion process – all while representing both your interests and the lender’s.
You’ll need to sign a consent form acknowledging that you understand the solicitor is acting for both parties. This document explains that if a conflict of interest arises, the solicitor might need to stop acting for one or both parties.
For regulated bridging loans (secured against your home), the process includes additional consumer protections. Unregulated loans (those for investment properties) have fewer regulatory safeguards, making it even more important to understand what shared representation means for you.
The entire process aims to be more streamlined than having two separate legal teams communicating back and forth, potentially reducing the time from application to completion of your bridging loan. And with a reduction in legal fees.
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The Potential Advantages
If you’re considering a bridging loan, dual legal representation offers some genuine advantages that might appeal to you, particularly if time or budget constraints are pressing concerns.
Cost Efficiencies
The most obvious benefit is a reduction in legal costs. As you will be paying for all of the legal costs anyway, a lower bill will no doubt be very welcome.
With separate representation, you’d pay for your own solicitor and the lender’s legal fees as well. Yes, this is how bridging lenders work.
Using one legal team for both parties can shrink the overall legal bill. On a standard bridging loan of £300,000, this might save you between £800 and £1,500, depending on transaction complexity and the firms involved.
When Time Matters Most
Speed can be another significant advantage.
With one legal team handling everything, there’s less back-and-forth communication between different solicitors. This streamlined approach can dramatically speed up the process, which is particularly valuable with bridging loans where time is often critical – such as for auction purchases or preventing property chain breakdowns.
The paperwork flow tends to be more straightforward.
Instead of receiving and sending documents between multiple parties, everything is managed by a single firm. This reduces the chance of miscommunication or documents getting held up between different offices.
For straightforward bridging loans on standard properties with clear titles, these benefits can make a real difference. A property investor buying a standard residential property at auction might find dual representation helps them complete within the required 28-day timeframe while also keeping costs down.
However, these advantages need to be weighed carefully against the potential drawbacks, especially for more complex situations or if you’re new to bridging finance.
Understanding the Risks
While sharing a solicitor might seem convenient and cost-effective, there are significant considerations you should weigh up before agreeing to this arrangement.
The Fundamental Conflict Question
The most basic concern is the potential for conflicts of interest.
A solicitor has a duty to act in the best interest of their client – but when they have two clients with different objectives, this becomes challenging.
The lender wants to ensure their loan is secure and all conditions favour their position, while you want terms that give you flexibility and protect your interests.
Consider what happens if you discover something about the property during the process that might affect its value, but you’d prefer the lender not to know. With dual representation, the solicitor would have duties to both parties, creating an impossible position.
Quality of Advice Concerns
Will you receive the same detailed guidance about the loan terms, risks, and alternatives as you would from your own dedicated solicitor?
The solicitor may feel limited in how thoroughly they can advise you on negotiating better terms when they also represent the lender.
Under UK regulations governed by the Solicitors Regulation Authority (SRA), solicitors must act where there’s no conflict of interest or significant risk of one arising. If a conflict does emerge during the transaction, the solicitor would need to stop acting for both parties, which could cause delays and additional costs if you then need to find new representation.
For complex bridging loans, unusual properties, or deals with bespoke terms, these risks become even more significant. The SRA’s guidance specifically notes that non-standard mortgages (which many bridging loans would be considered) present a higher risk of conflicts.
Setting the Record Straight
There are several misunderstandings about dual representation that you should be aware of when making your decision.
Many borrowers believe it’s always faster than using separate solicitors. While it can speed things up in straightforward cases, complex situations might actually take longer if conflicts arise or if the solicitor needs to be extra cautious to balance their duties properly.
Another common misconception is that the solicitor works equally for you and the lender. In reality, the solicitor often has an ongoing relationship with the lender who provides regular business, while you might be a one-time client. This natural imbalance could unconsciously influence how they approach the transaction.
Some borrowers assume that dual representation isn’t allowed. While the SRA does have strict rules about conflicts of interest, dual representation is permitted in certain circumstances where the risk of conflict is deemed low and both parties give informed consent.
The level of cost savings can also be overestimated. While you will likely save some money, the difference may not be as substantial as you might expect once all factors are considered.
Is It Right For You?
Dual representation isn’t a one-size-fits-all solution, but it might be appropriate for certain borrowers in specific circumstances.
Experience Makes a Difference
Seasoned property investors who understand bridging finance well and have completed several similar transactions before might find the cost and time savings worthwhile. They’re more likely to spot potential issues themselves and know what questions to ask.
For straightforward bridging loans on standard properties with clear titles and no unusual complications, the risk of conflicts arising is lower. If you’re buying a typical residential property as a buy-to-let investment with a standard bridging loan while you wait for a long-term mortgage, dual representation might offer an advantage.
Purpose of the Loan
The loan purpose also matters significantly. Bridging loans for simple property purchases tend to be less complex than those for development projects or business purposes, which will have additional conditions and requirements that benefit from independent scrutiny.
If you have a good understanding of legal documents and feel confident reviewing loan terms, you might be better positioned to use dual representation. However, if you’re new to property investment or bridging finance, having your own solicitor who can explain everything from your perspective might be worth the extra cost.
Your personal risk tolerance is another important factor to consider.
If you prefer having someone solely focused on protecting your interests, regardless of cost, then separate representation would better align with your priorities.
A Hybrid Approach
Some borrowers opt for a middle-path solution, where the lender’s solicitor handles most of the transaction, but you also get independent legal advice (ILA) from a separate solicitor who reviews the loan agreement and explains the implications to you.
This focuses the independent advice on the most critical aspects while keeping costs lower than full separate representation.
The hybrid ILA approach costs less than full separate representation but more than dual representation, offering a middle ground in terms of both cost and protection.
How Bridging Brokers Can Help
A specialist bridging finance broker can provide valuable guidance when making decisions about legal representation. Their experience with numerous transactions gives them practical insight into how different arrangements work in real-world scenarios.
Experience and Market Knowledge
Good brokers can explain the options in plain English, helping you understand the real-world implications rather than just the theoretical pros and cons. They know which lenders offer dual representation and how their specific processes work, which can help you avoid surprises.
Brokers have relationships with both lenders and solicitors, allowing them to suggest arrangements that might work best for your situation. They might know which panel solicitors have good reputations for maintaining independence even in dual representation scenarios.
Final Thoughts
Dual legal representation does offer potential benefits in terms of cost and time savings, but these must be carefully weighed against the risks of conflicts of interest and limited independent advice.
The best choice will always depend on your individual circumstances, including your experience with bridging finance, the complexity of your transaction, and your personal preference for risk management.
For experienced investors with straightforward transactions, dual representation might offer worthwhile efficiency. For newcomers to bridging or those with complex deals, having your own solicitor often provides valuable protection despite the additional cost.
Remember that while speed and cost are important factors in bridging finance, protecting your legal position is equally vital.
FAQ
Dual legal representation is when one solicitor or law firm acts for both the lender and the borrower in a bridging loan transaction. Instead of each party having their own legal representative, a single firm handles all aspects of the legal work, including conducting searches, preparing documentation, and completing the loan. This arrangement is offered by some UK bridging lenders as a way to potentially reduce costs and speed up the process.
Yes, dual legal representation is legal in the UK. While the Solicitors Regulation Authority (SRA) has strict guidelines about conflicts of interest, they don’t prohibit solicitors from acting for both lender and borrower in certain circumstances. However, solicitors must ensure there’s no actual conflict of interest or significant risk of one arising, and they must obtain informed consent from both parties. For bridging loans, the legitimacy depends on the specific situation and the solicitor’s assessment of potential conflicts.
Dual representation can potentially speed up straightforward bridging loans by eliminating communication delays between different legal teams. For simple property purchases with clear titles, this might save 3-7 days in the process. However, for more complex transactions, the time savings might be minimal or non-existent, especially if the solicitor needs to take extra care to balance their duties to both parties. If a conflict arises mid-transaction requiring the solicitor to cease acting, this could actually cause delays rather than save time.
The SRA allows dual representation but has strict guidelines regarding conflicts of interest. Their Code of Conduct requires solicitors not to act where there is a conflict of interest or significant risk of one arising. The SRA recognises that non-standard mortgages (which many bridging loans would be considered) present a higher risk of conflicts. Solicitors offering dual representation must justify their decision if questioned, ensure both parties give informed consent, and maintain records of their reasoning. The SRA expects solicitors to cease acting if a conflict emerges during the transaction.
Dual representation works best for straightforward bridging loans on standard properties with clear titles. This includes simple residential buy-to-let purchases, standard auction purchases, and chain-break scenarios. The more vanilla the transaction, the lower the risk of conflicts arising. Regulated bridging loans (secured against your home) often have additional consumer protections if dual representation is used. Conversely, complex commercial properties, development finance, or bridging loans with bespoke terms are generally less suitable for dual representation.
Yes, you can request separate legal representation even if the lender initially offers dual representation. Most UK bridging lenders will accommodate this request, although they may prefer their dual representation option. Be prepared for the lender to still insist on using their own solicitor for their side of the transaction, while you appoint your own. This arrangement provides better protection for your interests but will cost more than dual representation. Some lenders might try to incentivize dual representation with fee reductions, but the final choice remains yours.
It has become increasingly common in UK bridging finance over the past few years, though it’s not yet the standard approach across the industry. It’s more commonly offered by larger, established bridging lenders, particularly for straightforward residential bridging loans. Many specialist or boutique lenders still prefer separate representation, especially for complex or high-value transactions. The practice is growing in popularity as lenders look for ways to streamline processes and reduce costs, but many borrowers and their brokers still opt for separate representation despite the additional cost.
Solicitors manage potential conflicts through several approaches. First, they conduct a thorough conflict check before agreeing to act. They then obtain informed consent from both parties through clear disclosure about the arrangement and its limitations. During the transaction, they maintain transparency and equal communication with both sides. Some larger firms implement “information barriers” (sometimes called “Chinese walls”) between team members handling different aspects of the transaction. If a conflict does arise, the solicitor must cease acting for both parties. The effectiveness of these measures varies depending on the firm and the specific transaction.
Dual legal representation means one solicitor acts for both the lender and borrower throughout the entire transaction. Independent legal advice (ILA) is different – it involves having your own solicitor who reviews the loan agreement and explains the implications to you, while the lender still has their own solicitor handling the main transaction. ILA focuses specifically on ensuring you understand the terms and risks, rather than handling the whole process. Some borrowers opt for a hybrid approach, using the lender’s solicitor for most of the transaction but also getting ILA from a separate solicitor on the key loan documents.
