The Law Society has written to the chief executive of AIB, Dr Colin Hunt, with a request that the bank desist from asking for any additional letter of confirmation in relation to loan draw-downs.

• View the letter to Dr Colin Hunt

Many practitioners have had difficulties with AIB or its subsidiaries, EBS and Haven refusing to release loan funds in some residential loan cases, despite all the usual arrangements being in place.

The banks sought an additional letter of confirmation, in light of the cessation of the Property Registration Authority (PRA) of some of its services due to the Covid-19 pandemic.

Underwrite

The Law Society took the view that this confirmation request amounts in effect to the borrower’s solicitor being asked to underwrite any risk to the bank because of the PRA closure.

Law Society President Michele O’Boyle says that this is clearly not acceptable to the profession.

President O’Boyle so notified the Minister and the PRA by letter on 9 April.

Serious breach

The Society is also of the view that this action by the bank is a serious breach of the Certificate of Title system for residential mortgage lending.

Two of the fundamental principles of the agreed system are that only the three agreed core documents will be used and that there will not be a unilateral departure from the agreed system without the agreement of all parties.