Letters of Obligation
Classic Letters of Obligation
The Conveyancing Committee confirms the view previously expressed that conveyancing transactions involving domestic properties should be settled with a letter of obligation being granted by the solicitor personally and not on behalf of the client. So far as commercial clients' and charges' searches are concerned it is accepted that the practice is now to grant the obligation on behalf of the client. This should, however, be stated in the missives. The view was expressed that selling solicitors should take care when granting letters of obligation that they only deal with matters over which they have control - for example, delivery of recorded deeds, clear searches or feuduty redemption receipts. If there are extraneous matters to be dealt with on the settlement of a transaction, a solicitor should carefully consider the form which any undertaking is to take. If an obligation is to be granted on behalf of the client, this should be contained in a separate letter of undertaking.
If a solicitor is not prepared to grant a letter of obligation from his firm at settlement, the matter should be discussed and decided at the earliest possible stage. This is not a matter of law but rather one of proper and courteous practice.
