About Legal Panel
Why is Folk2Folk setting up a Legal Panel?
Folk2Folk recognises that legal work should be carried out by law firms in the locality of the Borrower/Security with knowledge of the area and possibly the site. In having a select Legal Panel, Folk2Folk can appoint suitable firms to act on its (and its Lenders) behalf. Folk2Folk is keen to build relationships with the panel firms, and to ensure that they fully understand its business. In essence to become an extension of our securities department.
What are the key differences between joining the Folk2Folk Panel and a Bank's panel?
The process of applying to join our Legal Panel and a Bank’s Panel is very similar and you are ultimately being asked to achieve a similar objective, i.e. protecting Folk2Folk’s Lenders by securing a first Legal Charge.
There are however differences, including providing an initial, high level review of the security at the loan approval stage, but more importantly being part of a valued service within your community for local Borrowers and Lenders.
Have the Folk2Folk Legal Panel processes been independently verified?
Yes, we have sought independent legal advice from large national and international firms with finance sector expertise.
How many transactions are we likely to be instructed upon?
This will depend on application volumes in your area. We believe that the number of transactions will build over time as we become a national brand and that work on behalf of Folk2Folk and its Lenders will provide a notable contribution to your property department’s work levels. For example in Cornwall and Devon there were over 240 transactions during 2015.
Your fees for acting on behalf of Folk2Folk and its Lenders are payable by the Borrower and are deducted from the advance.
We have a Fixed Fee scale. However, prior to issuing our Offer Letter to the Borrower, we ask you in your Initial Review report to confirm the fees in the matter and highlight if there is any reason the fee falls outside of the Fixed Fee scale.
If your firm is also instructed by the Borrower in the transaction, then you should look to the Borrower to pay such fees separately.
How it works
Who is our client?
Your client is Folk2Folk Limited and Folk Nominee Ltd (on behalf of our lenders).
You will not be required to advise our Lenders on any financial service matters and the T&Cs confirm that you are not providing any advisory work. Your work will be limited to checking security and arranging for completion of the security documentation – much like acting for a Bank.
Why use a Security Trustee to hold the Legal Charge?
This structure is not for legal or tax reasons, but purely ease of administration. As Folk Nominee is the client and holds the legal entity you do not have to create/accept each Lender as a new client. Also under this Trust arrangement each of the lenders do not have to sign the Legal Charge, this can be done centrally by Folk Nominee.
In addition we can more simply replace or change the Lenders in each loan without having to notify the Land Registry, but purely by serving suitable notices on the Borrower and existing Lenders and updating our Register of Beneficiaries.
Can we act for Folk2Folk’s Lenders and a Borrower?
Yes, it is very similar to when you are acting for a Buyer and a Bank on the purchase of a property. Conflicts need to be appropriately managed. We have created a Conflict Introduction Policy, which has been independently verified, to help you manage any potential conflicts.
Where you decide not to act for both parties, another Panel Firm will be appointed for our nominee company (on behalf of our lenders). You merely let us know that you cannot accept the instruction and we will appoint another firm, leaving you to still act for the Borrower.
What do we do if a client of ours is interested in obtaining finance through Folk2Folk or lending through Folk2Folk?
We welcome introductions from solicitors and you can provide our contact details. Please be assured that this is perfectly acceptable in terms of the SRA and FSMA. When providing written communications about Folk2Folk and/or our products, please use Folk2Folk prepared promotional documents. Please do contact us if you would like to receive these.
If you are successfully appointed as a Panel Firm:
- in oral communications about Folk2Folk and/or our products, you will need to communicate to the client that your firm may receive legal fees as a result of any borrowing transactions entered into before making the introduction (this can be communicated within your conversation (orally)).
- if you have referred a Borrower to Folk2Folk and you are acting for the Borrower on the loan, we have prepared a template Letter of Engagement to ensure you make the appropriate disclosures and conflicts statements for compliance.
Further explanation and details are provided in the Conflict Introduction Policy document, which you will be provided with on joining our Legal Panel.
Is Folk2Folk regulated?
Yes. Folk2Folk is regulated under interim permission from the Financial Conduct Authority and is in the process of obtaining full authorisation, which should be in place in the first half of 2016.
Do we need to be separately regulated or licensed to carry out work on behalf of Folk2Folk?
No. As Folk2Folk holds the necessary authorities from the FCA, you do not need to be separately regulated. We only require that you are registered with the SRA and on the Financial Services Register as an Exempt Professional Firm.
Do we need to be part of the Conveyancing Quality Scheme?
We would expect firms on our Panel to hold this accreditation.
What do we need to do to apply?
You should submit an Expression of Interest form via our website. If your firm meets our basic criteria, you will be asked to complete the Application Form online. The Application Form is very straight forward and requires you to sign our Terms and Conditions and upload a copy of your Professional Indemnity Insurance Certificate.
Who should we nominate as our main point of contact for Folk2Folk work?
The head of your property department should usually be the main point of contact, but can also be a senior member of the property team.
What happens after we apply to join?
We will acknowledge your application and process it, usually within seven days. We may then contact you for further information. If your application is approved you will receive log in details to our Legal Panel Portal. Following this, if you subsequently join the Panel you will receive training. No further action is required to be taken by you until instructions are received.
When are we likely to receive our first instructions?
On joining our Panel, our Loan Officers will be notified and they will look to instruct you as soon as a suitable opportunity arises in your area.
Who do we speak to if we have any issues, concerns or further questions?
Queries relating to membership of our Panel should go to our Legal Panel Manager at firstname.lastname@example.org.
If your query relates to a particular loan, then you should contact the instructing Loan Officer on 01566 773296.
If you have a query concerning a potential new matter, then you should speak to our Borrowing team on 01566 773296.