The revised version of practice rule 6(3) came into effect on 1 October 1999.

It applies to both residential and commercial conveyancing transactions.

Its effect is to:-- prevent a solicitor acting for both lender and borrower in an institutional mortgage (a mortgage on standard terms provided by an institutional lender) from accepting instructions which go beyond the limitations set out in the rule;-- prevent a solicitor acting for the borrower alone in an institutional mortgage from meeting requirements of the lender (for example by way of undertaking) which go beyond the limitations set out in the rule.This has caused an unforeseen problem in the case of institutional mortgages of commercial property.

It is common practice in these cases for the borrower's solicitor to prepare the certificate of title for the lender.

The rule does not prevent a solicitor who is acting for the borrower alone from giving a certificate of title to the lender, but paragraph (3)(f) precludes the giving of a certificate which goes beyond the restrictions contained in paragraph (3)(c).

These restrictions apply when a solicitor is acting for both lender and borrower.

Paragraph (3)(f) (the anti-avoidance provision) is designed to prevent circumvention of the rule in cases of separate representation.A certificate commonly given in a commercial mortgage may be in a form which is wider than the rule permits but is considered by commercial conveyancers to strike a fair balance between solicitor and lender.This problem does not arise in the case of private mortgages (where the terms have been individually negotiated) since, in those cases, the rule does not impose any requirements other than that of separate representation.

Provided no retainer is created between solicitor and lender, the borrower's solicitor may give whatever form of certificate is considered appropriate.Representations have been made to the Law Society that paragraph (3)(f) should not apply to mortgages of commercial property so that borrowers' solicitors can continue to give certificates, such as the City of London Law Society's Land Law Sub-Committee Certificate, with which they are familia r and have no problem.An amendment to paragraph (3)(f) is likely to be put to the Council of the Law Society for approval, subject to the concurrence of the Master of the Rolls.

Any amendment is likely to be to the effect that paragraph (3)(f) will not apply when the borrower's solicitor gives a certificate of title to a lender on a property which is not to be used as a private residence by the owner.

An amendment of this nature would allow borrowers' solicitors to continue to give whatever certificate is considered appropriate in institutional mortgages on commercial properties (including residential properties not intended for owner-occupation).If you wish to comment on this proposal, please write by 20 April to:Angela DoranProfessional EthicsThe Law SocietyIpsley Court, Redditch, Worcestershire B98 0TD; DX: 19114 REDDITCHe-mail: angela.doran@lawsociety.org.uk.